) plans to discontinue its Backup Exec.cloud service from Jan. 6,
2014, as it intends to completely detach itself from the PC
Backup Exec.cloud services forms a part of Symantec's
Information Management segment. Originally focused on small
businesses, the cloud-based service offered faster backups and
retrievals at the user, enterprise and server level.
It is a hybrid service that can be used both locally and
off-site, which helps to protect critical data and takes care of
a company's evolving needs. However, it lacks data-sharing
features and is not available on mobile devices.
This coupled with the secular decline in the PC market
prompted Symantec to fully close the service.
We note that the PC market has declined 7.6% in the
third-quarter of 2013 (according to IDC) and a recovery is
unlikely over the next 2-3 years. This has negatively affected
sales of Symantec's PC security solutions to a considerable
extent and also its business volume.
In the recently concluded second quarter of fiscal 2014,
Symantec's revenues declined 3.7% year over year to $1.64
billion, primarily due to a 3.0% year-over-year decline in the
User Productivity & Protection segment and a 2.0% decline in
the Information Security segment.
Moreover, the uncertainty over PC sales is expected to
negatively impact its User Productivity & Production revenues
throughout the remainder of the year. To counter this decline,
the company is focusing more on cloud-based services that can be
accessed from mobile devices.
Nevertheless, stiff competition from McAfee,
), sluggish IT spending and lackluster macro-economic environment
in Europe are expected to dampen Symantec's business prospects in
the near term.
Currently, Symantec carries a Zacks Rank #4 (Sell). A
better-ranked stock in the technology sector is
) with a Zacks Rank #1 (Strong Buy).
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