CEO Steve Bennett has said that the IT security vendor had gained too much corporate fat, slowing down its decision-making and communication. This led to the major reorganization, which will see "material" staff reduction.
Symantec had become "very bloated" and bogged down with bureaucracy, hindering its ability to respond quickly to market changes and customer needs. This led to the decision to initiate a major reorganization to streamline the management of the company, said its CEO Steve Bennett.
In a phone interview with ZDNet on Friday, Bennett said that the IT security vendor did not have a strategy and operational plan that focuses on delivering value to customers. It had expanded through acquisitions, but had not integrated its products well, he said, adding that this is an area he is now trying to fix.
The CEO on Wednesday announced a new strategy and major reorganization aimed at delivering "significantly improved performance for customers and partners." It also reported third-quarter revenue of US$1.79 billion, up 4 percent from the previous year.
The announcements come six months after Bennett took over as CEO in July, when his predecessor Enrique Salem was ousted for not delivering results. Bennett, who was chairman of Symantec's board of directors, said at the time that the company had strong, but underperforming assets.
The CEO said that he spent the past months speaking to customers, partners, and government officials across the globe, including Singapore in December, who reaffirmed that the IT security vendor had great assets, but were not utilizing them to add value to its customers.
Bennett revealed: "One of the things I learnt is that we have an organizational structure that, for whatever reasons, is very bloated and bureaucratic. We have too many layers, and our management spans are about half of what high-performing organizations normally have.
"The problem with this is it slows down decision-making and communication. I'm not a fan of bureaucracy," he said, and pointed to his 23-year stint at General Electric where he learnt to "strip out bureaucracy" in order to execute faster and be high-performance.
He said Symantec needed to simplify and streamline the management of the company, and the restructuring announced this week was key to such efforts.
Asked to comment on a report that this would result in 1,000 jobs being cut, Bennett declined to confirm or refute the figure. However, he did say the number would be "material", adding that the reduction in the management structure would be significant in order for the company to be faster and more responsive to market demands.
He acknowledged that Symantec was slow to respond to market changes, such as virtualization and cloud, but said these were part of several technology trends that defined problems customers now needed to solve. And this was where the security focus should be.
As part of its announcements this week, Symantec unveiled 10 focus areas--driven by market trends--which will guide its product development and offerings. These include mobile workforce productivity, Norton Cloud, information security services, data center security, and cloud-based information management.
"We've got to make it simpler for customers by integrating solutions, and in some cases integrating with third-party solutions, to better solve our customers' problems," Bennett said, noting that Symantec was now open to the idea of partnerships to serve customers.
He added that the security vendor will be looking to provide a high-level offering to help companies integrate all their different point-solutions.
The global-local approach for Asia
Asked how Asia would fit into the company's new strategy, the CEO said that this region continues to be an important and fast-growing business for Symantec, and in which it will invest additional resources.
Some of these will look at localizing its products for markets here.
"One of the things I learnt [talking to customers and partners] is we are basically a US company with global distribution. We want to move from that to become a company that's both global and local," Bennett noted.
If you look at some of the companies that are talking about security, whether it's Cisco or HP, these are great companies, but our security business is 50 times bigger than theirs.
Backed by engineering centers in India and China, he said Symantec would look at the possibility of building a product in India for India, or in China for China. This would allow the vendor to focus on better catering to the needs of both mature and developing markets in this region.
"What works for Japan or Korea may not be right in developing markets like Malaysia or Indonesia. I don't think a one-size-fits-all product offering--whether it's for consumer or enterprise--is the right solution for how to grow in Asia," he said. "I would be confident in saying over the next few years, we'll be investing more resources to help grow in Asia with more compelling offerings that are more tailored to local markets."
The vendor, though, has yet to figure out if--and how--its 10 new product focus areas will be tweaked for this region.
Splitting the company is not an option
In the lead up to the reorganization, which also involved an external advisor, Bennett said several options were thrown on the table, including whether to spin off its consumer business, sell Veritas--which it acquired in 2004--or undo that deal.
At the same time, a management plan, which he described as "the 5-and-30 plan", was put together to focus on organic growth and solving key customer needs.
"We compared all these alternatives and we made the decision to execute against the 5-and-30 plan," he said, referring to the company's goal of achieving 5 percent organic revenue growth and operating margins of at least 30 percent over the next few years.
He also dismissed the idea that standalone IT security vendors were losing relevance in the market, even as other players extend their product offerings to include security.
Bennett said that Symantec's big footprint and scale were unmatched and difficult for others to build.
"If you look at some of the companies that are talking about security, whether it's Cisco or HP, these are great companies, but our security business is 50 times bigger than theirs. They don't have the scale that we have.”
"We're the prettiest girl at the dance, and now that we've opened our minds to partnering with others when we were once a lone wolf, we have to be better than others at what we do," he said. "I think we are already, but we need to get much better...and we have the assets to make that happen."