BANGALORE - Security software vendor Symantec said Wednesday that
Enrique Salem, its president and chief executive officer, had stepped down right after the company reported that its revenue for the quarter ended June 29 grew 1 percent year-over-year to US$1.7 billion.
Symantec said its board of directors has appointed Steve Bennett, the current chairman of the board, to also hold the posts of president and chief executive officer.
Bennet emphasized in a conference call with financial analysts that he will not be filling in as an interim leader. "I am the CEO," he said. "And I told my wife that this might be a five year deal or may be a three year deal." He said he will not turn over the leadership of the company until he's comfortable with the direction it's headed. When Bennet steps down he plans to retain the post of chairman, he said.
The board's decision to make a leadership change was not based on any particular event or impropriety but was instead made after ongoing consideration and a deliberative process, said Dan Schulman, Symantec's newly-appointed lead director, in a statement. Bennett however said that in his view "Symantec's assets are strong and yet the company is underperforming against the opportunity."
"It certainly wasn’t something that was made quickly,” said Chris Paden, a spokesman for Symantec. “And it really wasn’t necessarily about financial performance,” he said, adding that the company views the latest figures as a “solid quarter.”
Paden said Symantec has seen the highest jump in their stock price in a decade, but at the same time, the company didn’t feel as though their true value was being reflected in the market. He listed three challenges the company is currently facing: a “very difficult foreign exchange headwind,” the rapid adoption of mobile devices and demand for software-as-a-service, which can be hard to keep up with, and a lethargic economy worldwide.
Paden says while Symantec is satisfied with its performance “across the board,” there’s always room for improvement.
“That’s one of the reasons that we changed CEOs," he said.
Bennett joined Symantec’s board in February 2010 after being CEO of financial software company Intuit. Before that he held senior management posts at General Electric. He became Symantec chairman in 2011.
Salem became CEO in April 2009.
Rob Enderle, a Silicon Valley-based IT industry analyst, the move was a little hard. Looking at the recent financials “you could put a CEO on notice, but it isn’t catastrophic.”
On the other hand, he added, “Symantec for a long time has kind of lost its way as a company – it was in the security business, then it got into systems management, then into storage. These are all different businesses where there’s not a lot of operational synergy.”
These moves came under former CEO John Thompson. Thompson was able to contain the strains, Enderle said, but even under his management it was “starting to come off the rails.”
“Now the new leadership has to decide what Symantec is going to be – is it going back to being a security company, or continue on its path to becoming a BMC-like entity – more into software infrastructure.”
However, Chenxi Wang, a vice-president at Forrester Research who specializes in security and risk management, Salem’s fall was no surprise. Symantec’s financial performance “has not been stellar since Enrique took over,” she said in an interview.
“I think they’ve been cruising and not meeting investor expectations.”
Industry and financial analysts have been talking among themselves for some time that if Salem didn’t get the company’s share price up “his days are numbered.”
“I was at Symantec yesterday meeting with their chief strategy officer, who mentioned the board was meeting this week.” It may have nothing to do with Salem’s departure but the staffer mentioned that there was tension in the building she added,
Salem’s problem, she said, was that he didn’t many risks, Wang said. Symantec is still the leader in desktop PC protection, but increasingly users are moving to mobile devices and to cloud services.
But, she said, Symantec has been slow to get into mobile device management. In March it bought MDM providers Odyssey Software and Nukona, but Wang thinks the moves were “late to the game.”
For the quarter, Symantec’s consumer segment, which represented 31 per cent of total revenue, saw revenue decrease 1 per cent year-over-year (although it increased 2 per cent after adjusting for currency). The storage and server management products segment, which represented 35 per cent of total revenue, decreased 2 percent year-over-year (again, it increased 1 per cent after adjusting for currency). Services, which represented 4 per cent of total revenue, and declined 2 per cent year-over-year (up 1 per cent after adjusting for currency).
Only the security and compliance products segment, which accounted for 30 per cent of total revenue, was up. It increased 7 percent year-over-year (10 per cent after adjusting for currency).
Looked at globally, international revenue, which represented 51 per cent of total revenue in the quarter, had flat growth rate year-over-year (up 6 per cent after adjusting for currency). Revenue from Europe, Middle East and Africa region was particularly affected, dropping 8 percent year-over-year.
The Asia Pacific/Japan revenue for the quarter saw revenue increase 9 per cent year-over-year, while revenue from the Americas (including the United States, Latin America and Canada) increased 3 per cent year-over-year.
(With files from Brian Bloom and Howard Solomon)