Symantec CEO Says Merger With Blue Coat Makes It Even More Relevant To The Channel

Symantec CEO Greg Clark said Thursday that the addition of Blue Coat Systems had created a combined company that is highly focused on maintaining a positive relationship with the channel.

Clark told Wall Street analysts that he and COO Mike Fey both have strong reputations for "taking care of what is that large extended sales force we have around the world"—Tier 2 VARs and Tier 1 distributors, and "nothing is going to change there."

"We feel good about our relevance to the VARs and resellers out in the world, whether it be in the small to medium-sized business, the midmarket or the enterprise," Clark said.

[Related: Symantec CFO To Depart, Replaced By Blue Coat Systems CFO]

As the world's largest pure-play security vendor, Symantec is a "substantial element of the economics in the channel," he told investors.

The company will continue to be highly relevant, especially in the mid-market where VARs are so essential, Clark said.

Symantec has also done much to integrate the global direct sales forces of the two companies, and, in response to an investor question about that process, Clark said, "if we were going to have problems, we'd be seeing them."

Indeed, a well-executed technology strategy, an organized sales force, and channel integrations with Blue Coat Systems drove Symantec's earnings well above Wall Street expectations.

The Mountain View, Calif.-based security vendor's financial results exceeded guidance in all categories, driven in large part by synergies and cost-savings from the $4.65 billion acquisition of Blue Coat. Symantec said cost saving are taking hold faster than anticipated.

"Product integrations are already having a significant impact on our ability to better protect customers," Clark told investors on the earnings call for the second fiscal quarter that ended September 30.

Clark, formerly Blue Coat's CEO, credited the company's partner ecosystem for much of the success.

"We've seen the service provider market really start to produce some fantastic deployments of what we're doing," he said.

Clark's comments came after Symantec reported a $144 million net loss on an eight percent increase in sales to $979 million. That compares to net income of $156 million on sales of $906 million in the comparable period one year ago.

Non-GAAP earnings of 30 cents a share were well above the Wall Street consensus of 18 to 21 cents per share,

The Integrated Cyber Defense Platform, rolled out as an integration of Blue Coat and Symantec technologies, makes Symantec the best-positioned security vendor to thwart cyber-attacks targeting users, websites and messaging applications, Clark said.

The technology is unique in combining endpoint, email and network threat telemetry, he said.

The two companies, whose merger closed on August. 1, have also integrated artificial intelligence with "two of the world's largest threat databases," Clark said, and are blocking half a million attacks per day.

With that technology base, Symantec has led efforts to combat hacker groups targeting Hong Kong political campaigns and committing massive cyber thefts.

Since the Blue Coat deal closed, Symantec has introduced new products, including Data Loss Protection, Cloud Access Security Broker, and Symantec Endpoint Protection 14.

Clark also discussed the recent distributed denial of service (DDoS) attack against DNS provider Dyn that took down websites across the world two weeks ago.

That attack, in which more than 100,000 Internet of Things devices like webcams, routers and video recorders were compromised to overload Dyn's DNS service, was a wake-up call, he said.

Unprotected devices can be used as weapons that are difficult to guard against, Clark said.

Symantec is working on creating solutions to the problem, both with technology from its Norton brand for consumer electronic devices in the home, and at the network detection layer, where its applying behavioral analysis technologies to identify IoT threats, he said.

But Clark warned of a long battle against "weaponized IoT" that will involve governments and technology vendors.

As Symantec is one of the few vendors with the technology to take on the IoT problem, that challenge, which increasingly becomes more essential and even subject to government mandates, should produce tailwinds for the business, Clark said.

Just before the earnings call, Symantec announced that CFO Thomas Seifert would step down, a move that takes away one of the last few remaining Symantec executives from the leadership lineup of the security vendor after its acquisition of Blue Coat Systems earlier this year.

Seifert will be replaced by former Blue Coat CFO Nick Noviello, effective December 1, Symantec said Seifert will remain with the company until March 2017 in an advisory capacity.