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1/21/2005
07:10 PM
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Revenue Flows To Those Who Guard Against Cyberthreats

The proliferation of spam, spyware, viruses, and worms is good for some businesses: the companies creating products to thwart these growing menaces.

Symantec Corp. last week reported that its revenue jumped 41% to $695 million in its third quarter ended Dec. 31 from a year earlier. Quarterly profit rocketed 47% from a year ago, to nearly $164 million. In the past six years, Symantec's revenue has soared at an annual rate of 38% to $1.87 billion last year.

Symantec, known until recently mostly for its antivirus products, this week is expanding its presence in the security hardware market with E-mail security appliances. It's not the only company diversifying; everyone in the market seems to be eyeing someone else's lunch. Microsoft is testing a version of anti-spyware software. IronPort Inc., which makes E-mail security appliances that use technology from Symantec, is touting new antivirus technology, IronPort Virus Outbreak Filters. And even as they compete, IronPort will offer customers the option of Symantec's anti-spam and antivirus engine on its C-Series E-mail Security appliances.

Symantec also has been on a buying spree of late, merging with Veritas and acquiring @stake, Brightmail, ON Technology, Liric Associates, and TurnTide in 2004. Since 1998, the company has typically made one or two acquisitions a year. These acquisitions are consistent with the direction that CEO John Thompson has laid out—helping make companies' information secure and available. "Symantec wants to be a major, major player for customers in their IT infrastructure," says Carlin Wiegner, director of product management for Symantec's E-mail security business.

Symantec's new Mail Security 8000 Series of appliances comes at a time when businesses need systems that address a full spectrum of security threats. It's a growing field. Research firm IDC estimates that vendors sold $132 million worth of secure content-management appliances in 2003, up 89% from a year earlier.

Product introductions don't make the best tea leaves for divining grand corporate strategy, but Symantec's renewed interest in hardware—the company began selling firewall hardware in 2002—indicates aspirations to become the one-stop shop to keep information and systems safe before competitors do so. "The path of least resistance for security companies is often selling into some sort of platform owner," says Pete Lindstrom, research director at market-research firm Spire Security. "Since E-mail is known as a conduit for bad stuff, there's an opportunity to sell product."

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