Symantec CEO: Enterprise Security Go-To-Market Model Needs Fixing

‘This will enable our enterprise business to grow without us having to invest in fixing our go-to-market model,’ says Symantec CEO Richard Hill after agreeing to sell the company’s enterprise security unit to Broadcom for $10.7 billion.

Symantec CEO Richard Hill said combining Symantec's enterprise security technology and Broadcom's reach and operational excellence should create a powerful force in the market.

"This will enable our enterprise business to grow without us having to invest in fixing our go-to-market model," Hill told investors Thursday. "With the go-to-market strategy we had employed, we were consistently falling short of the objective."

Even though Symantec's enterprise security business made up 49 percent of the company's overall revenue in the quarter ended June 30, the segment generated just 10 percent of the company's operating income in the most recent quarter. Semiconductor manufacturer Broadcom announced plans Thursday to purchase Symantec's enterprise security business for $10.7 billion.

[Related: $10.7B Broadcom-Symantec Enterprise Deal Creates Software Titan]

Symantec's consumer cyber safety segment – which includes both the Norton and LifeLock product lines - contributed 90 percent of operating income and 51 percent of revenue last quarter. The consumer business will operate as a standalone company going forward, though under a different name since the Symantec brand was sold to Broadcom.

Hill praised Symantec's enterprise security Integrated Cyber Defense platform, saying it's produced a strong and competitive portfolio of industry-leading products. The acquisition by Broadcom should ensure seamless service for customers, Hill said, as well as continued development of innovative and market-leading products into a dynamically growing market.

Symantec's enterprise security business should benefit from the go-to-market infrastructure that Broadcom already has in place, Hill said, allowing for an easy transition of the ongoing business onto Broadcom's platform. Broadcom CEO Hock Tam said the company's go-to-market team is focused on Global 2000 organizations, and also supports the Brocade and CA Technologies product lines.

Attempting to restructure the Symantec enterprise security cost model or go-to-market motion internally could have put the company's revenue stream in jeopardy, Hill said. Carving out stranded costs becomes much easier once Symantec's enterprise security business has been transferred over to Broadcom, Hill said.

"They [Broadcom] have great ideas, they understand the market, and there's great opportunity," Hill said.