Symantec to expand cloud-based software
Symantec Corp (SYMC.O: Quote, Profile, Research, Stock Buzz) is looking to expand offerings of cloud-based security and storage services in a bid to accelerate sluggish revenue growth, Chief Executive Enrique Salem said on Monday.
Salem, who took the helm of the world’s largest maker of security and storage software in April, told the Reuters Global Technology Summit that he wants to boost sales from data backup and other services that Symantec delivers over the Internet, so that they account for 15 percent of revenue within three to five years.
Profit margins for Web-based software tend to be thinner than for traditional software because vendors have to foot the cost of running computer centers to host the programs, on top of the developments costs for the software.
But Salem said he believes Symantec will be able to generate margins from hosted storage that are “comparable” to selling traditional software within three to five years.
“The lifetime value of a customer will potentially be higher,” the CEO said of such offerings, which are commonly known as Software as a Service, or SaaS.
The 17-year company veteran also said he is in no hurry to make acquisitions, even though Symantec has $2 billion in cash, as he expects valuations of private companies to decline over the next year. Symantec has bought 30 companies in the last decade.
“Private company expectations on valuation are still too high,” Salem said. “We can afford to be patient.”
Salem said the company will use acquisitions to add products in security, services delivered over the Internet, systems management and virtualization.
He pointed to recent purchases of Swap Drive and Message Labs, which sell online backup and messaging services, as examples of how he is using acquisitions to add such products.
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