Symantec Swallows AXENT; Takes on Network Associates

Symantec Symantec Swallows AXENT; Takes on Network Associates
L. Taylor - August 17, 2000

Event Summary

In a stock-for-stock transaction worth $975million, Symantec, headquartered in Cupertino, California, will purchase Rockville, Maryland's AXENT (see "With Record Revenues, AXENT Puts Down a Solid Fist") creating a strong presence in enterprise Internet security products and consulting services. According to Gail Hamilton, Sr. Vice President of Symantec, "This is one of the most significant events in the history of the security industry."

Symantec's 1999 revenues were $704 million, with its strength being virus products and virus management; AXENT's 1999 revenues were $112 with its strength being firewalls, intrusion detection, and security vulnerability assessments. Combining their product and service lines together, Symantec and AXENT will undoubtedly create a formidable security organization with most of the major security products and services covered. This positions the new company to be a billion dollar company by the end of Symantec's fiscal year in March.

Combined the two companies will have 3,400 employee resources. Further, together they currently have 400 job openings.

Market Impact

The Symantec acquisition of AXENT will definitely pose some challenges for Network Associates. Network Associates' and AXENT's product and service story have been close enough to pit the two security corporations against each other in multiple venues. With Symantec behind them, we expect AXENT's product line to gain increased visibility, throwing a few bumps in the road for Network Associates.

Symantec, once a provider of small business and home user security solutions, has made significant in-roads into the enterprise security market. Symantec recently announced an alliance with Earthlink to provide desktop firewall services to all of Earthlink's DSL customers, a relationship that is the first of its type in the security and managed service provider industry. (see "Earthlink Leads the Way in DSL Security")

Figure 1. NETA and AXNT are neck and neck while CHKP (Check Point) continues a steady climb.

With AXENT's solid Raptor hybrid firewall that includes both stateful packet inspection and proxy filters, Symantec sucked up one of the best firewalls on the market. This will increase the competitive stance AXENT's Raptor firewall has with Check Point's FireWall-1 product, making more resources available for development, marketing, and sales efforts. Greg Cottichio, VP of Marketing for AXENT states that "Customers are looking for fewer vendors to be involved in their network infrastructure." With that in mind, this merger gives the new company the potential to be the #1 leader in products and services in the security marketplace.

Initially no one from management of either company will be stepping down. John Becker, current CEO of AXENT will be staying on to assist John Thompson, Symantec CEO, in the transition. According to Mr. Cottichio, a key strength of the new company will be its large in-house security expertise. In a market that has few extraneous security experts to be found, Cottichio states that, "It all comes down to the people. Now we have an even greater group of security experts."

Figure 2. Symantec & AXENT team up to fill-out security product lines.

[1] Source: ConnectPR

User Recommendations

With this acquisition, TEC expects Symantec to command market leadership in the security segment of the Information Technology market. With an expanded customer base that includes all factions of the security segment, Symantec can now cater to Fortune 50, as well as small to medium sized businesses and federal agencies.

Formerly Network Associates was really the primary one-stop-shopping site for security products and services. Today, Symantec can now offer just about everything that Network Associates offers. Network Associates is still ahead when it comes to PKI development, Protocol Analyzers, and Vulnerability Assessment products. However, if Symantec gobbled up ISS, a PKI vendor, and a competing protocol analyzer tool, Network Associates could be in for a head-on collision with Symantec. The Symantec AXENT firewall beats Gauntlet by a long shot, and on the virus front, they are probably neck and neck.

So what does this mean for users?

  • If you're looking for a PKI tool or protocol analyzer, you're still better off calling Network Associates.

  • If you're looking for an enterprise firewall or a personal firewall, you're better off calling Symantec.

  • If you're looking for virus protection, either company is a safe bet.

  • If you're an investor, and the IT security segment keeps growing at its continuing rapid pace, both companies could be good investments, though TEC would put its bets on Symantec.


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