Symantec's SMB Security Report - Analyst Blog

Internet and IT security major Symantec Corp. ( SYMC ) recently came out with the results of the 2011 SMB Threat Awareness Poll. The results were a bit surprising as it claimed that Small & Medium Businesses (SMBs) are not targets of cyber attacks. As a result, they are reluctant to enhance their IT security measures.

This poll was mainly conducted to examine the awareness levels of small and medium sized businesses (SMBs) regarding the threat of security breaches and to determine how well they are prepared against them.

More than half (54.0%) are aware of the fact that malware would result in loss of productivity, but only 36.0% of the total participants recognized that hackers could gain access to proprietary information. This apart, respondents also agreed that a targeted attack would impact the business. While 46.0% stated that a targeted attack would affect revenues, 20.0% said it would result in customer losses.

Although the survey reveals that awareness regarding cyber security is increasing, SMBs largely don't perceive the threat to be high enough to increase investment. On the contrary, the data from the Symantec cloud suggests that since the beginning of 2010, nearly 40.0% of all targeted attacks have been directed at companies with less than 500 employees, with 28.0% directed at large enterprises.

Therefore, despite the significant potential in the SMB segment, companies such as Symantec, Kaspersky and Intel ( INTC ) are unable to exploit the opportunity. It is quite possible that the opportunity may only be tapped through embedded or bundled solutions, or until more companies are affected.

The global network security market, described as hardware and software with functionality, including segments such as firewalls, VPNs, intrusion prevention and detection, and multi-purpose security known as unified threat management, are expected to generate revenues of $8.16 billion in 2011.However, given the findings in the report, the bulk of this will not be coming from SMBs, notwithstanding the fact that Symantec serves all these business segments.

Given its significant share in the fast-growing security market and the acquisition of VeriSign's identity/authentication business, we believe Symantec will be able to capitalize on the vast opportunities in the security market. On the other hand, the reduction in technology spending by different government and private organizations concern us.

Moreover, the current economic turmoil in Europe may also dampen the company's business prospects in that region. This apart, intense competition from big and small players, as well as the threat from Microsoft Corp.'s ( MSFT ) new Windows operating systems may limit margin expansion.

The company has a Zacks #3 Rank, implying a short term Hold rating.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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