Small and Medium Business (SMB) has taken center stage in the
business mix of IT security software provider
Symantec Corporation
(
SYMC
). Symantec is focusing more and more on the SMB segment as it
holds good business potential and the company is looking to
restructure its business model to seize the opportunity.
The company recently announced the formation of an organization
dedicated entirely to cater to the SMBs and has also partnered with
various companies to serve the SMBs and come up with innovative
solutions. We believe this is an innovative business strategy
adopted by the company that will impact its business customers and
create a win-win situation for itself as well as its customers.
As per a recent study published by the Industry Consortium for
Advancement of Security on the Internet (ICASI), several trends are
contributing to a rapidly evolving threat landscape and presenting
new challenges across the global IT infrastructure.
The study revealed that global Internet traffic is growing
40.0%-50.0% annually. The industry has been able to identify almost
two billion Internet users, with four billion more users expected
by 2013.The company expects most of this growth to come from the
developing nations.
The statistics provided by the industry research body reveals
the fact that there were some 13,762 vulnerabilities reported in
2010, which is a 12 fold increase compared to the data available in
2000. This is a big threat for both small and big companies as
their systems are constantly exposed to the Internet. Today's cyber
attacks are more complex and often difficult to detect, and can
target classes of users. Some users are gaining access to valuable
data and causing significant harm.
On the other hand, some SMBs take chance with their IT security
system irrespective of the considerable security threats, given
buying, deploying and managing security, storage and backup systems
are too complicated and time, money and energy consuming. This may
dampen the otherwise good demand to a certain
extent.
Although the Internet security market is growing steadily and
offers incremental growth opportunities, smaller companies like
Kaspersky and Quick Heal that have resorted to aggressive pricing
to sell their innovations remains a huge challenge to the
company.
In our view, Symantec has delivered a modest fourth quarter with
the bottom line surpassing the Zacks Consensus Estimate.
Geographical and segmental performances were impressive, barring
the EMEA and Service segments.
However, uncertainty over PC sales may affect its business in
the upcoming quarters. Moreover, cautious tech spending by
different government and private organizations, stiff competition
from McAfee (acquired by
Intel Corp
. (
INTC
) as well as the prevailing economic turmoil in Europe will likely
dampen the company's business prospects this year.
The company has a Zacks #5 Rank, implying a short term Strong
Sell rating.
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