A chat with Thompson

In an exclusive interview, Sean Robson catches up with John W. Thompson, CEO of security and storage major Symantec, to discuss the company’s recent successes, future plans, and how it is working to achieve its global goals.

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By  Sean Robson Published  November 15, 2008

In an exclusive interview, Sean Robson catches up with John W. Thompson, CEO of security and storage major Symantec, to discuss the company’s recent successes, future plans, and how it is working to achieve its global goals.

You have gone from being a simple security company to a firm that offers a  range of diverse products and solutions across the board. Do you feel that you may lack an overarching message?

We are quite clear that our business is about helping our customers secure and manage data in an extremely information driven world. As such we have technologies and services that support this theme. Now, do we have solutions and products that do other things? Yes, but we do not try to say, well we secure and manage and do this and do that. It's just too complicated. Do we worry about our fault tolerant, high availability business?

We wanted to be able to aggressively move into the software as a service, or on demand, cloud-based services market and had started that.

Absolutely, it's a half billion dollar business for us but it does not need to be visible in some overarching statement about what we do. However, our sales force needs to be clear about where it fits in the overall strategy and able to articulate its value to customers.

Do you have any plans or strategies going forward as you look to continue your dominance of the market?

We wanted to be able to aggressively move into the software as a service (SaaS) or on demand, cloud-based services markets and we had started down that path with our own organic activity.

By acquiring MessageLabs we are making a real statement of intent, we are putting US $700 million on the line to be a real player in the market and are doing it by acquiring the number one player. If you see anything in this it is not only the strength of our resolve to be in the market but also a continuation of our track record in buying the best property in the space.

Symantec has shown increased revenues and profits over 2008 and the first quarter of 2009. Are you anticipating that this growth will continue at the same rate or even increase, especially given the current state of the global economy?

What we have said is that our long term growth model for the company is in the range of 8-12%. We take half the free cash flow from operations and plough back into share repurchase. Right now that amounts to between $800 and $900 million a year.

We will take the other half of that cash and use it for strategic mergers and acquisitions to drive top-line growth. We would expect to continue to manage cost and expense really very closely particularly during challenging economic times and simultaneously have our margins expand by about 100 basis points a year.

This is the model that we think makes enormous sense for this company given the scale, capability and size of its portfolio, and while there might be some opportunities to grow faster than that in some years, and slower than that in other years, it does not change long term what we think the company should be able to do.

Are there any specific global challenges you have identified as you look ahead?

I think the single most significant challenge for us is making sure the world, our customers and our partners understand what it is we do. Because we have achieved this scale fairly quickly through a series of acquisitions it's still somewhat of a mystery to some people as to exactly what Symantec does.

I am always amazed that people, even four years after we bought Veritas, don't know that we do back-up and recovery. They don't know that we do high availability server management; they don't know that we are the leader in enterprise-level virtualised storage environments.

They don't think about Symantec in that space because they have us in this pigeon hole of ‘that's the anti-virus company'. Even on the security side they don't know that we do data loss prevention, they don't know that we have market leading spam filtering capability and there are many more examples.

So our challenge is to make it very clear and visible as to who we are and what we are capable of and in such a way that our team and our channel partners can sell more of our products and services.

It's about messaging and communicating. As hard as we try and as many times as we say it and think we have said it too many times, we still need to say it again and again.

With the many acquisitions that the company is making, there is a growing belief that Symantec could grow into an unwieldy and inflexible corporate giant, like IBM or CA. How do you prevent this?

Well, firstly, we are already bigger than CA, we are about one and half billion dollars bigger than they are. And we are nowhere near the 100 billion dollar business that IBM is, so I am not worried about catching them anytime soon. I wish I had that problem, however, because I think what our customers want is to do business with a provider that can give them a range of capabilities, that can go both deep and broad.

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