Symantec to partner with telcos, refocus on cyber security

IT security software company Symantec is aiming to partner with major telcos such as Latin America's América Móvil, as the company sells off its information management business Veritas and refocuses its strategy on cyber security.

Symantec said on Tuesday it would sell off Veritas for US$8bn in cash to an investor group led by The Carlyle Group with GIC, Singapore's sovereign wealth fund, in a transaction expected to close on January 1, 2016.

"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," CEO Michael Brown said in a statement.

Symantec acquired Veritas for US$13.5bn in stock in 2004 with the idea that Veritas' storage and data management portfolio would open new doors for Symantec, a bet that never paid off.

Between a US$0.15 divided per common share and share repurchases, Symantec expects to return about 120% of the after-tax domestic cash proceeds of the sale to its shareholders.

The company is now looking to restore its focus on its core business and revive the product pipeline of a struggling security software business.

The company posted a 14% year-on-year drop in revenue in 1QFY16 to US$1.499bn and a 50% decline in net income to US$117mn.

FOCUSING ON TELCOS, CONSUMER, CLOUD

Speaking during a conference call with investors, Brown said: "Now having actually gone through the transition of shedding the unprofitable revenue, we're focused now from a consumer standpoint on online acquisition.

"And also the relationships we have with major telcos. So as we've talked about before, there's an opportunity to partner with major telcos and cable companies. So Comcast, Deutsche Telekom, SoftBank, América Móvil in Latin America," Brown said.

Competitors in the security business, such as Cisco Systems and Intel Security have been increasingly focusing on telecoms companies to ensure networks are secure end-to-end in view of the evolving trends in 4G communications, the Internet of Things and storing information in the cloud.

In April Intel Security and Ericsson announced a partnership to combine the expertise of both companies to build value-added offerings for operators.

Brown said Symantec would focus on protecting cloud-based workloads, endpoint management and a unified security analytics platform that underpins this strategy, adding that some of the applications for that analytics platform will be available by year-end.

That strategy will involve adding 150 channel partners by the end of the year.