Symantec’s vision of integrating security and storage with Veritas failed to produce results
In the prior part of this series, we discussed Symantec’s (SYMC) sale of Veritas to the consortium headed by The Carlyle Group. When Symantec originally acquired Veritas, the company hoped to combine security and storage, believing that clients who pay for storage would also require security, and vice versa. It believed that both businesses would complement each other. But integration proved difficult, and Symantec’s vision failed.
Veritas’s presence in the information management industry also diminished steadily over the last few years. So Symantec announced its decision to split its information security and information management or storage software businesses.
Apart from Symantec, technology players like HP (HPQ) and eBay (EBAY) have been forced to give in to rising investor pressure and announce their own splits. In August 2015, Re/code revealed that EMC (EMC) is considering a buyout by its own subsidiary VMWare (VMW) due to increased pressure from Elliott Management, a hedge fund and activist investor.
With Veritas out of the way, Symantec will return to core focus
Commenting on the Veritas sale, Michael Brown, Symantec’s CEO (chief executive officer), stated, “This transaction strengthens our financial foundation, paving the way for Symantec to grow its security business and increase its lead as the world’s largest cybersecurity company.”
Symantec now aims to revive its product pipeline with a focus on its core security software business, including security analytics. Brown shared that Symantec will be looking to strategically buy other security companies and associated technology.
As you can see in the above graph, decent growth is expected in the cybersecurity space. Gartner expects total cybersecurity spending to grow by an additional 8.2% in 2015 to reach $76.9 billion.
You can consider investing in the iShares US Technology ETF (IYW) to gain exposure to Symantec. IYW invests about 0.45% of its holdings in Symantec.