Last Thursday, Symantec announced that interim CEO Mike Brown has now assumed this role on a permanent basis. Wall Street wasn't exactly dancing a jig when it heard the news; the stock was down from after-hours trading on Thursday through the close of the market on Friday. In fact, of the 28 analyst recommendations currently tracked on Yahoo Finance, 20 are issuing a “hold” recommendation and only 3 classify Symantec as a “strong buy.”
Wall Street’s lukewarm reaction to Mike Brown represents what he and the company face moving forward. The market at large (i.e. investors, IT managers, potential employees, etc.) was expecting new blood when Symantec terminated Steve Bennett and promised an “extensive search” for new a new leader and apparently interviewed 100 candidates, with 33 seriously vetted for the top job. When Brown was handed the job last week, market cynics quickly concluded that either the company couldn’t attract a visible software leader, or an inept board wasted time and money before realizing that Brown was the right person for the job. Right or wrong, Symantec faces these and lots of other negative perceptions.
Yup, Mike Brown faces an uphill battle, as would any other CEO taking this job. In spite of the pessimism, however, there is plenty of upside for Symantec moving forward. The market for leading cybersecurity products and services is red hot, while storage requirements continue to grow unabated.
So what should Mike Brown do? I wrote a blog back in March which proposed a number of recommendations for the company (note: the title of the blog was “If I were the next CEO of Symantec.” Alas, my phone never rang). In the blog, I suggested that Symantec double down on managed and professional security services, acquire strong security startups (again), build an integrated infosec architecture for enterprise organizations, and make the company easier to do business with. My ideas still stand. The only thing that’s changed in the intervening months is the sense of urgency – Symantec is farther behind than it was last winter.
As far as the data management/storage business, my ESG colleague Jason Buffington tells me that Symantec is in danger of being categorized as a legacy vendor. The company must spiff up NetBackup and Backup Exec as quickly as it can with the right features, platform support, and modern efficient code base. Symantec has had some successes such as its backup appliances, but Jason says that the market needs to hear more from the company about product differentiation, strategy, and market vision.
Aside from product strategies and roadmaps, Brown and Co. must move beyond its creative but status quo Symantec 4.0 messaging and truly pivot into other directions. Whether fair or not, the market won’t give Symantec much wiggle room – 3 CEOs in 2 years will do this.
I truly believe that Symantec has the opportunity to have the last laugh – the company has some strong products, a huge installed base, and leading service offerings to turn things around. One thing Symantec doesn’t have is time. If Symantec makes a few bold moves (i.e. divests business units, makes a major acquisition, recruits top-tier talent, etc.) by the end of the year, it can build on these proof points with precise execution in 2015. If not, the market won’t be very forgiving for very long.