By Mark Sutton
itp.net speaks to Enrique Salem, president and CEO of Symantec about building the company's profile in information management and competing with free security solutions.
Enrique Salem, who took on the role of president and CEO of Symantec in April this year, recently made his first visit to UAE. itp.net spoke to him about building Symantec’s profile as a information management company, competition in the security market, and security solutions for emerging markets.
What’s the purpose of your visit to the region?
Enrique Salem:When you think about what we do, we look at where can we grow our business, where are the new opportunities, and the emerging territories like the Middle East are places where we see lots of opportunity. You have to invest, even in downturns. When you think back to the Asian currency crisis, in the late nineties the companies who invested in the downturn were the companies who came out stronger on the other end. That is what we see here – investing now will reap significant rewards in the future, and that is the reason for my visit.
Are you looking at specific investments for the Middle East?
Absolutely. We have a range of things, we recently opened an office in Egypt, we are obviously looking at what other investments we need to make across the entire region. We definitely see a lot of good opportunities.
What sort of areas will you invest in?
Usually it is people. Our business is a people-based business, and it is usually, recruiting staff to be able to reach more customers, to communicate with more partners.
We are trying to do things that are unique. What we are trying to do is to make sure that we pull together our product portfolio, and not think narrowly about one market or another. I think a lot of our competitors, whether you take EMC, or Trend, or MacAfee they are in one or the other markets, and what we think is that it’s about information, it is about the intellectual property that every business has. What do you do with the information? You need to secure it, but you also need to manage it, so backing up and recovery, and securing that data go hand-in-hand. You have to be able to do both together. That is the unique value proposition of Symantec, you don’t need to work with different vendors to do both of those things.
For business customers, do you think there is a perception of Symantec as a storage player, can you make ground against other companies like EMC who are firmly established in storage but also have security through RSA?
They are following us, we bought Veritas, and they decided to buy RSA. The timing is interesting.
If you look at it, businesses around the world, they know that we help them in the data centre. We do business with 100% of the Fortune 500, we do business with almost 100% of the Global 2000, and so, they know what we do.
I met with a very large customer in New York that decided to use our Veritas NetBackup product. Once they picked that product, they went to EMC and Hitachi and said ‘I am going use NetBackup, it works with both of you, so whoever gives me the best price [for hardware] wins’. They got a 30% discount, so our goal, quite frankly, is to commoditize infrastructure. Companies that build hardware, our goal is to make them irrelevant, to make them a commodity basically.
Do you have other strategic areas of expansion or acquisition?
There are three big areas – one is the security market, one is the next generation information management, backup and recovery and archiving, the third is Software as a Service. Those are the big investment areas for us.
What are your plans for Software as a Service?
We acquired Message Labs in the UK, and our plan is to deliver more and more of our product portfolio - data loss prevention, web security, message filtering, we will add end point management, and we already have online backup; my expectation is that over the next five years, 15% of our business will be Software as a Service.
Does this have traction with business users, particularly in the Middle East where we see a lot of resistance to outsourcing?
I think it is interesting, I think it is a mindset, but I also think it is going to change. One of the challenges that you have in the Middle East is resource availability, and the workforce all over the Middle East, so the notion of being able to do more through third parties and Software as a Service will take hold, it is only a matter of time. We already have many customers who are using our managed security services here in the Middle East.
Do you need to invest in datacenters in the developing markets to support this?
Absolutely, we have got 14 data centres today around the world, and that number probably goes up from there. What happens is a lot of markets have very specific regulations around where data can be stored, so we are very sensitive to that.
At the retail/ home user level, MacAfee has been a lot more aggressive recently in doing deals with OEMs, to get their software on new desktops…
They have a long way to go. Just to give you an example, we are about $1.8 billion in consumer business. If you add up all the other vendors, they don’t add up to us. We have more than half the market share – I sometimes refer to it as Symantec and the seven dwarves.
In terms of competition with MacAfee, how important is that trialware market with new PCs?
It is very important. If you look at the marketplace, and I would be curious about any reviews you have seen to contrary, we have got the best products. The 2009 version of Norton Internet Security, and Norton 360, are the very best products on the market.
Secondly, this year so far there have been nine OEM deals that we have been competed for, we have won eight of the major deals. We are the largest vendor with the best products - usually that wins.
Are you selling more storage or information management products to the end user as well?
Consumers are using more and more of our back up products. Norton 360 includes both local and online backup, we have 41 petabytes of customer data stores in our data centres, we are adding five petabytes per quarter, we have eight million people who are using online backup, that is phenomenal. The nearest competitor has one million.
HP has recently announced a deal with us to ship online backup with all of their PCs. Because [consumers] are creating so much digital content every day, consumers are putting pictures or documents on their PCs, they need to back it up.
Are you offering online back services in all markets?
We are expanding it into every market, it is just a matter of time until we get into every place. It is available with 360 [in the Middle East].
In terms of being able to deliver online services, particularly on a wider scale to consumers, is there the bandwidth to support this in the Middle East?
We are seeing bandwidth improve in the Middle East, we are also seeing the number of people who are using broadband increase. In Egypt we have seen a big increase in broadband penetration. One of the side effects of that is they are becoming more targeted [by hackers] there is more malware hitting Egyptian citizens than ever before, because they are going online and they are having more access to broadband.
Does that create an opportunity for you?
Once they go online, they absolutely need our help, because you need to be safe when you go online.
How do you reach a market like that – you might be the market leader, but when you have companies like Microsoft offering security tools for free…
They haven’t been successful – they pulled out of OneCare, and I think that what that really means is they have realized that security is really hard. It feels like a retreat more than anything else.
So you wouldn’t expect their security essentials to take any market share from you, not even in the ‘next billion’ markets?
We bought a company called PC Tools in Australia, which gives us a dual brand strategy. Basically what that allows us to do is have Norton for the premium security buyer, and then PC Tools which is used for more emerging territories, so we expect to see PC Tools do a lot in emerging markets.
What is the fundamental product difference there – Symantec has said that Microsoft Security Essentials wasn’t giving the full range of protection that you would get with a full product – so how does PC Tools fit into that?
PC Tools is a product where we have leveraged a set of capabilities in malware detection, but it is not going to have the online backup, it is not going to have some of the other features that we would put in the higher value suites, but it does a fine job for a more price sensitive buyer. I would kind of look at it like Toyota and Lexus – Toyota works fine, but the premium car is the Lexus. That is the same thing that we have done, there are more bells and whistles, there are some things that become simpler, there is probably more flexibility on options, but both work.
Would you be looking at PC Tools for a market like the Gulf?
Absolutely. We talked about this with our team, about getting it on to store shelves, and we are starting to already.
Is there a risk of cannibalizing Norton market share?
All I care about is that they buy it from us. I think the important things is Symantec is the market leader in security, we are the market leader in back up and recovery, and what we are going to do is focus on what the customer wants, which is not a lot of point products, but bringing them together, so we can secure and manage the information that they use every day.
Its really great to see this report about symantec, but every time we ready about their market share in different countries we find it shrinking to other venders, even in their latest financial results its dropping, so how is every thing is going well !!! if things goes like this, i dont believe they will be market leaders any more. so if they really have a great product as they say, then it should be reflected in their financial performance, correct me if i am wrong!!! Editor's reply: The interview was conducted before Symantec posted their financial results, but I agree, increased competition is definitely something that they need to account for.