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Why Symantec split up into two companies

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Symantec is the latest tech player to announce split

It’s not every day that we get to hear about billion-dollar tech players splitting into pieces. However, lately it seems to be a trend in the tech industry. Ebay Inc. (EBAY) and Hewlett-Packard Company (HPQ) both recently announced that their companies were splitting into two separate entities. On October 10, 2014, Symantec Corporation (SYMC) joined these players when it announced its plans to break up the company. It made the final decision to split up into two companies. After the split, Symantec will begin operating as two separate entities, the security business and the information management (or IM) business.

ETFs that have significant exposure to Symantec include the PowerShares QQQ Trust (QQQ) and the Technology Select Sector SPDR Fund (XLK). These ETFs are likely to benefit when the company posts positive results.

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Split provides a tailored approach to Symantec’s businesses

In the words of Michael Brown, president and CEO of Symantec, “As the security and storage industries continue to change at an accelerating pace, Symantec’s security and IM businesses each face unique market opportunities and challenges. It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation.”

Symantec’s decision to split up into two companies is expected to enable a tailored approach to the two kinds of businesses in terms of customers, offerings, threats opportunities, and end markets. Functioning as a single entity might have stunted the growth of both the entities.

Realignment of Symantec’s structure to become more agile

Symantec has realigned its organizational framework by eliminating several mid-level management positions, including the COO position, in order to create a leaner operating structure. It also outlined a go-to-market strategy. The strategy involves reorganization of its sales force into specialized groups so functional areas of security and information management can be looked after.

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