Symantec Focus on SMB Market

Internet and IT security company Symantec Corporation (SYMC) recently revealed its "2010 Global SMB Information Protection Survey” report. Through this survey, the company revealed that small and mid-sized businesses (having 10 to 499 employees) are now adopting the highest standard IT security measures to protect their sensitive information, compared to just 15 months back when many had failed to implement even the most basic safeguards.

As per the survey conducted on responses from 2,152 SMB executives and IT decision makers in 28 countries, SMBs reported that the danger of cyber attacks was ever-increasing,, with cyber attackers augmenting their technologies and coming out with new viruses. This is a natural threat to devices, as well as confidential or proprietary data.

The survey revealed that SMBs are now spending an average of $51,000 a year and two thirds of IT staff time on activities such as information protection, which includes operations like computer security, backup, recovery and archiving, as well as disaster preparedness. The study reveals that 87.0% of SMBs have a disaster management plan, but 23.0% still need to upgrade their security measures.

Additional findings from the survey reveal that 74.0% of SMB customers are concerned about losing electronic information, while 42.0% have already lost such information before. In totality, almost 100.0% of all SMBs that have lost data and suffered financial losses directly or indirectly.

The survey is proof that Internet security is a growing concern for SMBs, and security companies, such as Symantec and McAfee (MFE) are expected to take advantage of this opportunity and add new customers.

To better serve its existing clients and procure new ones, Symantec enhanced its Norton security portfolio with the launch of "Norton Everywhere". The software, which launched last month, provides security for hybrid mobile devices.

Symantec is also tightening its relationship with channel partners by awarding them Archiving and eDiscovery Specializations. This is basically a tool to get the stronger channel partners more involved with the Symantec ecosystem with the intention of getting more business from them.

Symantec is the largest provider of PC and Internet security solutions. The company has broadened its focus through a series of acquisitions and a strong product pipeline. Symantec's new product portfolio now includes Altiris 7.0 and newer Norton products, which are likely to enhance sales, especially to SMB customers.

Symantec delivered encouraging fourth quarter results and provided a decent first quarter 2011 outlook. The strong product portfolio, growth prospects in all its served markets, acquisitions, customer win momentum and strong cash generation ability are positives.

On the other hand, we are a bit concerned about the intense competition that the company faces from big and small players, as well as hardware and software manufacturers entering the IT security business. The company's high debt balance and security offered by Microsoft's (MSFT) new Windows operating systems also pose some challenges.

We are continuing with our Neutral rating on Symantec shares.

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