The merged company retained the name Symantec, and year-old Eubanks became its chief executive officer. Eubanks, formerly a nuclear submarine commander, had studied computer engineering at the Naval Post-Graduate School in Monterey, California. The merger received significant support by venture capitalist John Doerr, who went on to become a member of the board of directors.
Doerr was the first to see the potential in the merger and helped bring it about through his urging and financial backing. In order to obtain lists or statistics based on a data file, the user types in queries as ordinary English sentences instead of as arcane commands.
The use of natural language query in this product was a significant step in making computers more user-friendly. Thus, Symantec took the strategic move of broadening its product base, particularly in specialty niche software categories. To take advantage of such software developments of other, smaller firms, Symantec formed its Turner Hall Publishing division to publish third-party software. More significantly, Eubanks decided that the company would expand its product offerings through acquisitions of other software companies.
This involved not only obtaining a company's products but also retaining the company's programmers in order to continue to develop new products in the given category and its marketing staff who had established client relationships.
At the same time, Eubanks decided to structure Symantec's organization into complete teams for each product. This involved establishing product groups comprising all the functions of product development, quality assurance, marketing, documentation, and technical support. Subsequently, when other companies were acquired by Symantec, product autonomy was maintained. This way, employees of acquired companies who were accustomed to working in small companies were able to maintain a sense of the small company culture.
Symantec began its acquisition campaign in Living Videotext was the developer of ThinkTank, a presentation graphics program for the Macintosh, and Grandview, an information management program for the PC.
The number of employees likewise nearly doubled, to reach in , with 90 percent of the acquired companies' employees staying on. Direct sales representatives increased from 20 to The portion of Symantec's sales to large corporations rose from 18 percent to about 35 percent in Symantec's existing products also benefitted from the acquisitions through the ability to provide complementary software package combinations.
For a relatively small company, managing such acquisitions was not easy. Although sales doubled, Symantec suffered net losses due to the costs of the acquisitions. While product management was kept separate, the acquired companies' finance, administration, personnel, and public relations functions all had to be merged.
The restructuring was complicated by the loss of top managers. The founders of acquired companies Videotext and Think Technologies decided to leave Symantec. Eubanks proceeded to reorganize the company to reduce the number of top executives and give more authority to middle managers.
These management and financial difficulties all contributed to the postponement of an initial public offering, which Symantec had originally planned for May of After six years of losses, Symantec finally became profitable in , or fiscal year ending March 31, On June 23, , the company made its initial public offering.
A stock split went into effect in September, By November of that year the stock price was five times higher than it was when it went public, and it was selling at 64 times earnings. The high stock price supported Symantec's acquisitions, which were usually bought in exchange for Symantec stock. Flat-file databases, in contrast to relational database programs, require all the data to be in a single file. Symantec made its biggest acquisition to date in August of when it purchased the highly successful Peter Norton Computing Inc.
This software package historically has been the market leader in PC utilities software. Utilities are programs that perform functions such as backing up and compressing files, checking for viruses, and restoring lost data. The purchase also helped Symantec, whose utility products were more heavily weighted towards the Macintosh platform, expand into the PC utilities market.
Most of Norton Computing's employees were retained. The merger also helped Norton Computing regain the market share it was losing to competitors, especially Central Point Software. Norton Computing's revenues tripled between June of and September of , and by November it appeared to have regained the market lead over Central Point. Norton Computing's merger with Symantec has since been cited as one of the most successful acquisitions in the software industry.
Symantec made three more acquisitions in In August it acquired Zortech Inc. Even during the recession of the early s, which was especially severe in California, Symantec continued to grow.
Symantec also expanded in Europe. The company opened a European manufacturing facility outside of Dublin, Ireland, in October of The train was carrying electronic equipment. To listen to a recording of the author reading this column go here.
I am picking up on disturbing news about Symantec. First a reseller from Colombia that I was chatting with at the recent RSA Conference in San Francisco informed me that he was there to find a solution to fill a gap created by Symantec abandoning all but its top resellers. Second, another industry veteran told me that Symantec is abandoning all but its most profitable 2, customers. That will leave over , Symantec customers looking for alternatives. Historically, this move is only matched by the tremendous blunder that Symantec made under John Thomson when it acquired Veritas.
Much of the following is excerpted from my recent publication, Security Yearbook Anti-virus products predated the internet. The s were a time when viruses were transferred from machine to machine via floppy disks. The original anti-virus vendors grew from companies that provided a variety of utilities for the nascent PC industry. File storage, system optimization, disk cleaning, data erasure, backup and recovery, and anti-virus made up bundles sold by software companies that primarily addressed the consumer market.
As PCs invaded the workplace, so did viruses. As viruses became more and more virulent, the importance of AV grew, as did the AV market. The Symantec name came from a small software company founded in by Stanford grads to create a database program for the new IBM PC. Under its CEO at the time, Gordon Eubanks, Symantec embarked on a strategy of acquiring niche products and taking them to market.
By Symantec even got into the contact management business when it acquired the makers of ACT! Symantec also acquired Fifth Generation Systems, which had a contract with a small company in Jerusalem called BRM for anti-virus software. Eubanks stepped down from Symantec in to be replaced by John W. Thompson, an executive from IBM. He had little experience with security products, but was tasked with growing the enterprise security business of Symantec. He then started acquiring security companies such as Axent Technologies, a firewall vendor, L-3 Network Security for vulnerability management [2], and Seagate's Network Storage Management Group.
He also looked briefly at Finjan Software. Very early in his tenure, Thompson relates, Symantec suffered a breach on a Friday. Under John Thompson Symantec continued to grow through acquisitions. It played an important role in the overall industry, offering an alternative to an IPO to many high-flying startups with good technology. The big paydays for investors and founders fueled more startups and more investments.
Sygate, acquired on August 16, , had a series of desktop tools including a popular PC firewall which Symantec discontinued after the acquisition. It produced system and asset management software. PCTools was run as a separate company until Symantec killed it in May It was created by Phil Zimmerman.
Versign, which eventually got out of the security business, had decided to focus on its remarkable cash cow of maintaining the top level domain servers and collecting a fee for every. It provided ediscovery solutions for legal firms. LiveOffice, a cloud email and messaging archiving company, was acquired on January 17, Odyssey Software for device management including mobile devices was acquired March 2, It was followed by Nukana, acquired April 2, , which was a mobile application management solution.
NitroDesk, a nine-person shop with application container technology for Android devices, was acquired May Splitting off Veritas in was the first acknowledgement that Symantec was suffering and was in need of restructuring. Blue Coat had had its own troubles over the years. It was initially launched as Cacheflow in Its stock jumped almost five fold on opening day. Blue Coat quickly became the largest vendor of content URL filtering appliances.
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