News this week that Symantec Corp. CEO Michael Brown will step down from office barely two years after being appointed to the role highlights the vendor’s continuing struggles turning its business around.
Brown’s pending departure—he will stay on until a successor is appointed—marks the third time in less than four years that Symantec has had a CEO leave amid disappointing sales.
In July 2012, Symantec fired chief executive Enrique Salem and replaced him with Board chairman Steve Bennett, in a bid to reverse the company’s declining fortunes at that time. Less than two years later, in March 2014, Symantec ousted Bennett in a surprise move and named Brown as interim CEO and president of the company. It formally confirmed him in that role in September 2014.
With Symantec announcing Brown’s planned departure this week, the mantle of interim CEO and president has now fallen on Ajei Gopal. A former CTO and executive vice president at Symantec, Gopal was most recently an operating partner at Silver Lake, a technology investment firm that recently made a $500 million strategic investment in Symantec.
In announcing the transition, Symantec offered no reason for Brown’s exit. Instead, board chairman Daniel Schulman lauded Brown’s execution on several of the company’s key priorities including the divestiture of Veritas, development of a new enterprise security product road map and improving Symantec’s overall cost structure.
“Given our solid financial foundation and clear path forward as the leader in cybersecurity, this is the right time to transition leadership for Symantec’s next chapter of growth,” Schulman said in a prepared statement.
But John Pescatore, director of emerging security trends at the SANS Institute, says Brown’s exit points to Symantec’s continuing struggles regaining its strategic focus after years of diversification.
Symantec started off and initially made a name for itself in the anti-virus business. Over the years the company branched off into areas that took it pretty fair afield of its core strengths, Pescatore says. As examples, he points to Symantec’s $13 billion acquisition of storage vendor Veritas in 2005, its $1.2 billion purchase of authentication vendor Verisign in 2010, and its acquisition of encryption technology provider PGP for around $300 million, also in 2010.
Analysts believe Symantec’s forays into multiple different areas, particularly the storage arena with Veritas, caused it to lose focus in the cybersecurity space. Recently the company has been trying to shed some of the weight it acquired over the years in a bid to streamline operations. After Brown took over as CEO, he initiated several changes aimed at getting the company refocused on its core security business. His biggest move in that direction by far was the divestiture of Veritas to the Carlyle Group last year for $8 billion.
In a recent interview with Dark Reading, Brown talked about his mission to get Symantec rededicated to enterprise cybersecurity. He pointed to Symantec’s new Advanced Threat Protection platform as an example of the technologies on which the company would focus moving forward.
Symantec would not be a one-stop shop for security technologies, Brown had noted. It would instead focus on areas of strength and opportunity like threat intelligence, security analytics, data leak protection, and cloud-based protection for advanced persistent threats.
But the plans may have been too little too late for Brown. Symantec’s revenues and earnings per share of $873 million and $0.22 respectively for the quarter ended March 31 were both below consensus estimates of $885 million and $0.24 to $0.27 per share. The company’s revenues for the past several quarters have been declining even as the cybersecurity industry itself has grown at a steady pace.
“I really think Symantec has had a lot of downward movement,” Pescatore says. In wanting Brown out, the board appears to have shown its impatience with the pace of change at the company, he says. “They have basically said ‘you haven’t shown us anything to show you are capable of turning this thing around’,” he says.
Pescatore says Symantec’s best bet going forward is next-generation endpoint protection technologies and mobile device management. “They need to pick a direction and get rid of everything that does not fit that direction," he says. Over the long-term, Symantec could also benefit by positioning itself as an acquisition target, like McAfee was by Intel.
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