Symantec looks to Middle East for speedy growth

Business is booming for IT security companies as recession has become a platform for cyber criminals looking to make quick money by stealing vital personal information from internet and recruiting IT professionals who have lost their jobs.

Security software companies have definitely increased their market share and revenues in these troubled times, and the Middle East is in the thick of action. Global chiefs are also visiting the region as they see immense potential here after business has slowed down globally.

In this atmosphere, Enrique Salem, President and CEO of Symantec, who is also the first global chief from Symantec to make a trip to Dubai, said focus was shifting towards emerging markets such as China and India and the Middle East.

Salem's recent trip was to initiate investments into the region and meet top customers based here.

He was also clear that Symantec was not just about end-point security, but dominating the information space in security, storage and management.


In your new role, what are your top priorities and how does the region fit into the whole global strategy?

This is an environment where Symantec sees opportunity and growth. The global economy has seen a reset happening and there are lots of similarities between the markets here and globally. According to forecasts from the World Bank, the Middle East economy will recover faster than global markets.

This is the reason Symantec will invest here. We want to participate in the recovery. Our recent investments in Egypt are an example. And there will be more such investments as we continue to open offices and gain access to the local market.

All of our new investments are in emerging countries, so China, India, the Middle East and Brazil are our top priority. It has really been a clear focus area for Symantec, as we are investing less in other markets.

There will be no cut back in investments in emerging markets. In fact, they will continue to increase in these markets. My team makes sure that I visit the regions where there is opportunity.

Customers today care about two things: Protecting their information from both internal and external threats and data – that is growing at an explosive rate.

Information is growing at 60 per cent every year and Symantec's goal is to secure and manage this information. It is also about making information available to our customers. This is essential as organisations face contradictory requirements such as making information accessible to more people on the one hand and protecting this information on the other. And our job is to deal with these contradictions.

What was your purpose of visiting the UAE specifically?

In my new role, I wanted to take the opportunity of visiting all the different areas of the company's operations. This region, particularly, is part of the emerging markets where we see a lot of growth potential.

As economies of the world struggle, Dubai is no different in terms of IT spending. Recovery on the global scale will happen, but this region offers one of the biggest growth opportunities.

Security forms only three to seven per cent of IT budgets in the Gulf compared to the global average of 10 per cent. In such a scenario, how do you plan to increase the relevance of security in the region, and what do you think would be a major factor to change this environment?

Security becomes more relevant as information growth rates increase and threats to that information multiply. Today, the convergence of these two trends can be seen around the world. Some businesses are seeing information growing at a modest rate of 20 per cent, while with others it is growing at 60 to 70 per cent each year. Consumers, too, are creating more information than ever before – from music and videos to financial data.

At the same time, businesses and consumers must deal with more threats than ever before. For example, in 2008, Symantec created 1.6 million signatures to combat current viruses and other threats. That's more than we had created in the previous 17 years combined. And those 1.6 million signatures blocked approximately 250 million attacks across the globe every single month.

Today's attackers have shifted their tactics in an attempt to evade detection, moving away from mass distribution of a few threats to micro-distribution of millions of distinct threats. And servers now auto-generate new malware by the minute, with 90 per cent of all threats attempting to steal confidential information. What is more, threats to information not only come from outside the organisation, but also from within. Employees accidentally lose laptops, USB devices and other information repositories. And some intentionally steal confidential corporate data.

In fact, a recent survey done by Ponemon Institute found that 59 per cent of employees, who left their company, admitted to taking sensitive data along with them, and 24 per cent had access to their corporate network even after leaving the company.

Together, these two global trends – the rapid growth of information and the increase in threats to the safety of that information – are bringing security to the forefront not only in the Gulf, but also throughout an increasingly interconnected world.

How can you bring the cost of information down?

One of the things we do is to help identify information and how you put it on a USB device by providing tools to secure this information.

Symantec is also moving aggressively into the Saas (software as a service) segment, as customers do not want to take care of it themselves. As a company we are at a point where we expect 15 per cent of our business to come from Saas products and solutions.

But the Middle East works differently as enterprise customers are still not comfortable with putting their security and information on the cloud. How will you change the mindset?

This will happen and we have faced similar situations in countries such as Switzerland. Symantec had put up a local data centre as they wanted to keep information locally. Every market or country works differently and has peculiar challenges. I do not expect the Middle East to be any different.

We will meet the requirements of the market and if it means putting up a local resource in a Middle Eastern state, that will be figured out. From a local perspective, there are customers who are comfortable using managed services.

You had mentioned Saas as an important technology as well as a focus area for Symantec. What are the other technology areas of focus for Symantec and how do they fit into its future growth strategy?

As the leader in big and growing markets, Symantec is well positioned to pursue a variety of unique opportunities through the next several years. For example, we will accelerate our security business and extend our leadership by providing small and mid-sized businesses the advanced security protection that 60 per cent of them lack. We will deliver protection suites that combine messaging security with endpoint security and backup system recovery and offer enhanced data loss prevention capabilities. Through these and other innovations, we will provide businesses a new model for operationalising security – one that is risk-based, information-centric, responsive and workflow-driven.

In addition, we will move our backup and recovery business into next-generation information management. With customers now creating significantly more information, we will be able to help them decide what information needs to be backed up and enable them to back that data up to virtually anything, from a solid state drive to a virtual tape library (VTL) or an online service.

By bringing our backup and archiving technologies together into a more integrated solution, we will also give businesses of all sizes a more streamlined tool with simple administration and common policies for backing up, archiving and discovering information.

We will also take advantage of opportunities to help IT buyers commoditise their infrastructure. Buyers no longer want to be locked into any one vendor. Instead, they want choice. They want to be able to choose the hardware, operating system or hypervisor that provides the best price-performance for their environment. By enabling them to get better utilisation and return on their storage investments, regardless of the device, we will help organisations keep storage hardware costs low. These priorities, together with our increased focus on Saas, will help drive Symantec's growth today and tomorrow.

What is the major focus area for Symantec in the security arena for 2009?

The biggest focus is on information especially data loss prevention. The threat landscape has changed dramatically as 90 per cent of attacks in 2008 were targeted at confidential information. Attackers are so targeted that, as I mentioned, in 2008 we created 1.6 million signatures, which were more than what we created in the past 17 years. Symantec's priorities are focused on hackers, spies and thieves who are targeting confidential information. Our job is to protect that information and resources will be put in that direction.

With the legacy of acquisitions left behind by former President John Thomson, should we expect to hear more on this front?

Symantec is a cash-rich company and we will continue to be inquisitive. Currently, we are expecting valuations to be the best therefore I am in no rush to conduct any acquisitions. Integration of technologies with the existing layer is most important.

How much cash do you have on your balance sheet?

I am in no rush to do acquisitions and Symantec continues to generate cash between $1-2 billion (Dh3.67-7.34bn) each year. There are only two uses of cash – buying back shares and companies. We have bought $8bn of our shares over the past five years.

You have mentioned the importance of emerging countries. Can we expect these acquisitions to take place in this region?

Symantec is prospecting companies right now for specific transactions, but would not rule out this region. You can absolutely expect us to prospect companies all over the world. Two of our recent acquisitions have been outside the US – one in Australia and the other in the UK.

Do you see potential in this region?

Absolutely. The best part about technology is innovation. I have run five startups. Small companies can come up with an idea anytime and Symantec would not restrict itself to a specific place for acquisitions.

Symantec's new incubator division targeted at unplugging engineers from the company's traditional product development process giving them the freedom of working in a startup atmosphere. Do you plan to encourage that in the region?

The incubator is focused on new business models and so one of the projects in the incubator is the healthcare vertical. There is a lot of new development happening in the healthcare segment and we are always looking for ideas. Symantec has a review board and would not rule out that there is a specific opportunity in the emerging market. If there is a project we will look into it and fund it. There is no project in the incubator as of now, but the benefits will also be part of this world.

Recently I had the opportunity to meet the CEO of your close competitor Mcafee. One of the main agendas for the company is to compete with Symantec and gain market share. Is that a concern for you?

Mcafee has to chase us because Symantec is the clear market leader. Symantec earns $1.8bn in revenue from consumers, while they are $460 million. If you add up all our competitors, they still do not compete with Symantec. It is like 'Symantec and the seven dwarfs'.

Mcafee also claimed that they dominate 40 per cent of the OEM segment. What's your viewpoint on that?

Symantec is with HP, which has gained eight points of market share. We have a relationship with eight of the 10 OEMs. At the end of the day, we are the largest player in this segment.

How relevant is it for Symantec to strike OEM PC deals?

Nine deals were signed at the beginning of this year; Symantec won eight of them. That is almost 100 per cent of the deals. The company has the scale to compete and – just to give you another example, HP has just extended its agreement by adding online backup to their PCs.

Are you losing market share in the enterprise segment?

According to Gartner, Symantec dominates 21 per cent of the total market. The nearest competitor does not have half of that. Therefore, we cannot be compared to Checkpoint, as we do not do firewalls.

Would Symantec move into non-security product segments?

Competitors are striking deals with back- up and recovery companies. Mcafee did a deal with Commvault, but Symantec still owns the back-up market. We have more than 50 per cent of the back-up market. Symantec backs up more than half the world's data, as customers want to combine security and backing up. Symantec is the only company capable of doing this.

Does Microsoft's foray into security, especially the free security software, affect your market positioning?

Security is not an easy segment, which is why Microsoft retreated as they failed. They have not been successful and therefore will not affect us in any way.

Moving forward, with Symantec present in product lines other than security, how will the perception of Symantec change as a company?

Our objective is to provide our customers with confidence in a connected world by ultimately helping them secure and manage their information. We remain the world leader in security, but believe that you cannot secure what you do not manage, so we have expanded our footprint to include critical components to help us do that.

Recent analyst reports have singled out Symantec as a market leader not only in endpoint security, messaging security and security management, but also in policy and compliance, e-mail archiving, data loss prevention, network access control, endpoint management, storage infrastructure software, core storage management and data protection.



PROFILE: Enrique Salem President and CEO, Symantec

In his 16-year tenure at Symantec, Salem has held a variety of senior management positions. Most recently, he served as Chief Operating Officer with the responsibility for the day-to-day operations of the company. Prior to that, he was Group President, worldwide sales and marketing, where he managed global sales and partner programmes, marketing, communications and branding.

Before joining Symantec, Salem was President and CEO of Brightmail, a leading anti-spam software company that was successfully acquired by Symantec in 2004. He has also served as senior Vice- President, products and technology, at Oblix and before that as Vice-President, technology and operations, at Ask Jeeves.

He received a bachelor's degree in Computer Science from Dartmouth College. He was named Corporate Executive of the Year by Hispanic Net in 2007 and Entrepreneur of the Year by Ernst and Young in 2004

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