There are wonderful statements that we can make about not only our pre-existing results in the marketplace, but the future of what we will deliver as the networked world continues to evolve.
Traditionally, Symantec has been a consumer-focused company. That has
changed with the acquisition of Veritas. Was that in anticipation of more
competition on the consumer side of your business?
Thompson: Not per se.
It was all about our desire that dates back to my arrival at Symantec seven
years ago to remix our books of business, having it mirror the market. In
the world of software, two-thirds to three-quarters of all spending is done by large
corporate and government buyers and the remainder is done by consumers and small
businesses.
If you are disproportionately weighed to one segment of the market versus the other, you have the opportunity to do very well or very poorly. If you were more evenly distributed, you have an opportunity to handle the ups and downs much better.
Becoming an enterprise-focused company hasn't been easy. Last week, you
acknowledged that there is some trouble
with customer support for a former Veritas product. Are these just teething
problems?
Thompson: That issue is specific to a brand-new product, one
Veritas acquired just before our acquisition of Veritas. It was a small company
that built a market-leading product for e-mail archiving. Once we put it into
the larger Veritas and Symantec sales force, sales took off. Sales grew faster
than our ability to scale up and train up our support organization. We have had
a few issues in some markets. Those will be addressed.
That has nothing to do with bringing Symantec and Veritas together. It is unique and specific to one product area that has had phenomenal success in the marketplace. I'd love to have that problem a few times more, quite frankly.
So you would say that becoming more of an enterprise-focused company
hasn't been hard for you?
Thompson: You don't take a company like
Symantec through such a significant transformation without there being some
challenges or pains. Seven years ago, we were a US$632 million, consumer-focused
company. Today we're a US$5 billion, fourth-largest software company in the world,
with a very diverse product set with leadership capabilities in all of the
segments that we play in. I think that has been a pretty remarkable
transformation for this company.
At the Gartner event on Wednesday, Symantec customers were asked if they
see synergies between Symantec and Veritas. There was only one. Did that shock
you or worry you?
Thompson: I was quite surprised. Since we closed the
transaction in July of 2005, I have spent a considerable amount of time on the
road with customers, talking about the Symantec-Veritas merger. While it
certainly caught people by surprise in late 2004 and early 2005, as time has
gone on, customers have started to say, "Gee I can see the relevance of bringing
these things together."
So such a muted response surprised me. We have to execute to be vindicated. I am not concerned about that. I think the strategic intent of our company is spot on with where the markets are going. It may take some people time to catch up with our thinking, but that's OK; we're patient.
Where do you see prices for security products headed?
Thompson: It
is clear that as markets mature, prices weaken. And clearly certain segments of
the security market, not all, are starting to mature. We talked two or three
quarters ago about weakness in price in our core antivirus business.
Interestingly, it would appear that during the most recent quarter, prices there
have stabilized.
Now, as Microsoft enters the market, it will be interesting to see what the price dynamics become. Microsoft has a formidable franchise in Windows, and they have a formidable marketing capability. I am sure that they will use both of those in an effective way. As long as they are fair, we believe they can compete and win.
You have talked about playing fair before and that you won't
go "whine" to the regulators or sue Microsoft. Is there a certain line that
Microsoft should not cross that might change your mind?
Thompson: We
haven't done some magic, game-theory approach that says if Microsoft does this,
we're going to do that. We're worried about running our business in the best way
we know how to. Obviously we have one eye on the market and another eye on all
of the competitors in the market, and Microsoft is one of them.
I'd rather compete with Microsoft's products than with Microsoft's PR. All we have been doing for the last two or three years is competing with their communications machine. Once they get a product in the market, we'll see just how good they are and we are.
Where do you see Symantec and yourself five years from now?
Thompson: I could envision Symantec being twice the size, a software
company that is US$10 billion in scale, 30,000 employees around the world, 8,000
people in engineering, a large percentage of that staff globally distributed, a
sales and marketing engine, and a powerful brand that is recognized as one of
the true leaders in the tech industry.
As far as I am concerned, I love what I am doing. I am having a wonderful time. We've got a great team of young executives that work with me, and hopefully we will all still be here together five years from now.
And your flagship products then will be?
Thompson: I don't think
you will see us stray too far from the core roots of protection--protecting the
infrastructure, protecting the information, and increasingly protecting the
interactions individuals and enterprises have as they operate in the digital
world.
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