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.