Symantec and Network Associates will face competition in the next year.
Virus and worm attacks that increasingly plagued Internet users over the past year have proven profitable for Symantec Corp. and Network Associates Technology Inc. The two leading antivirus software makers last week reported strong growth in antivirus software sales, citing persistent virus and worm outbreaks as largely driving that growth. However, their market leadership may come under fire in coming quarters as other vendors move into this market.
For its fiscal year, ended April 2, Symantec reported revenue of $1.87 billion, a 33% increase over last year's $1.41 billion. Net income for the year was up 50% to $371 million. For its fourth quarter, the company's IT-security sales to midsize and large companies comprised 38% of revenue and grew 30% year over year. Symantec's consumer revenue grew 62% and represented 48% of the total for the previous quarter.
Network Associates' revenue from sales to large companies was $59.31 million in its first quarter, ended March 31, up from $52.72 million a year ago. Taking away $6.69 million in sales of the company's new network intrusion-prevention IntruShield application, revenue was essentially flat year over year. Network Associates' sales to small and medium-sized businesses slipped from $68.7 million to $66.4 million. Consumer sales shone, growing 65% to $44.07 million.
That type of stellar growth is unlikely to last. As Microsoft continues to improve its desktop firewall bundled with its operating system and brings its Active Protection Technology to market, both Symantec and Network Associates could see their consumer antivirus sales threatened. Microsoft's efforts aim to stop all types of attacks and make it easier to secure its Windows operating system.
Network vendors such as Cisco Systems and Juniper Networks Inc. increasingly are adding security capabilities into their networking gear. "It's a knife fight," says Network Associates president Gene Hodges. "You have very competent firms here who are whaling on each other."
Neither Network Associates nor Symantec is standing still, however. In the past year, Network Associates sold off all business units not associated with security, such as its Sniffer network-management and -performance unit. It also acquired Entercept and IntruVert Networks to provide intrusion prevention for desktops and networks, and soon it will change its name to McAfee, its unit well-known for antivirus and desktop-utility software.
Symantec in the past few years has made increased headway selling its largely acquired mix of interoperable security software, firewalls, intrusion-detection systems, and security-management software to large companies.
As Microsoft bolsters the security of its operating system, it will take small-business and consumer sales away from conventional desktop-security vendors, says John Pescatore, a research VP at Gartner. "The behavior-based protection will block many worm-type threats, making it less imperative for consumers to renew their antivirus subscriptions," he says.
Andrew Bagrin, director of business-technology applications at Regal Cinemas Inc., which operates 550 movie theaters in 36 states, says consumers may quickly move to Microsoft's security technology, but that's not something companies will do.
"We're spending a lot of time protecting [Microsoft's] applications. I don't think companies are ready to put Microsoft software in place to protect Microsoft software," Bagrin says. Symantec and Network Associates have been working in security for a long time, he says, and they'll continue to innovate and survive.
We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
The Next Generation of IT SupportThe workforce is changing as businesses become global and technology erodes geographical and physical barriers.IT organizations are critical to enabling this transition and can utilize next-generation tools and strategies to provide world-class support regardless of location, platform or device