Symantec halts two-year enterprise security slide

Enterprise security arm is growing again ahead of Veritas sale

Symantec's enterprise security business returned to growth in its fiscal Q1, despite the vendor suffering an overall sales fall as it was distracted by its efforts to spin off storage arm Veritas.

The vendor, which yesterday agreed a deal to sell Veritas to an investor group led by Carlyle Group, saw sales fall 14 per cent year on year to $1.499bn (£927.5) in the three months ending 3 July.

Stripping out currency headwinds and the fact Q1 in 2014 was a week longer, overall sales were flat.

Enterprise security – which includes its threat protection, information protection, trust services and cybersecurity services offerings – proved a highlight, chief executive Michael Brown said, as sales in this area grew for the first quarter in two years, albeit by just one per cent.

"With a strong product pipeline of more than a dozen enterprise security products on track to be released this year, Symantec is now focused on extending its lead as the world's largest cybersecurity company," Brown said.

Breaking down its enterprise security performance by product area, threat protection – which includes its end-point security, end-point management, mail, web and datacentre security offerings – saw sales fall one per cent. Information protection, which includes Symantec's DLP, encryption and identity and access management offerings, grew three per cent year over year in Q1, while trust services, which includes its SSL and PKI solutions, also rose three per cent.

It was a mixed picture for Symantec's other divisions, however, as its consumer security arm suffered a six per cent fall in sales and its Veritas information management wing grew revenues three per cent.

Brown admitted he was disappointed that underlying revenues were flat but pointed out it was a quarter of "significant complexity". Symantec had to grapple with both a major sales force transition as it established separate organisations for Veritas and Symantec, and a separation of the two businesses' IT infrastructure, HR, legal and finance functions, he said.

"Third – and what we didn't anticipate – was managing a Veritas sale process that involved extensive due diligence with multiple parties," Brown said on a Q1 conference call, a transcript of which can be read here.

"The complexity of managing these three efforts simultaneously resulted in disappointing execution for both Symantec and Veritas, from which we expect to recover in Q2 as our sales force transition and the due diligence associated with the Veritas sale are now behind us."