Boss of troubled security firm steps down after earnings warning
Security vendor Symantec has been rocked by a shock revenue warning that prompted the resignation of president and CEO Michael Brown.
Symantec has, in recent times, had something of a revolving door of CEOs, who have struggled to adapt the company away from its reliance on the PC market and towards cloud services.
In 2009, for example, it appointed Enrique Salem as CEO, but he was deposed just three years later (in 2012). Board member Steve Bennett was then appointed as CEO, but after just 20 months in the job, he was fired in March 2014.
Following the departure of Bennett, Michael Brown took over as interim CEO, before he was officially appointed CEO six months later in September 2014.
And now nineteen months later, Brown is also on his way out.
“Symantec today announced that Michael A. Brown will be stepping down as President and Chief Executive Officer,” said the company. “Mr. Brown will continue to serve as CEO and as a director of the company until a successor has been appointed. The Symantec Board of Directors has begun the search for the Company’s next CEO.”
“We thank Mike for guiding Symantec through a critical period of transition as President and CEO,” said Symantec’s Board, Chairman Daniel H. Schulman. “Under his leadership, Symantec has successfully executed against the five priorities of its transformation, including divesting Veritas, developing a new product roadmap in enterprise security, improving our cost structure, strengthening our executive team, and continuing to return significant cash to shareholders. Given our solid financial foundation and clear path forward as the leader in cybersecurity, this is the right time to transition leadership for Symantec’s next chapter of growth.”
“I am extremely proud of what our team has accomplished,” said the departing Brown. “I look forward to supporting this transition as we continue executing on our unified security strategy, building our enterprise security sales pipeline, improving our cost structure and efficiently allocating capital.”
Symantec’s board of directors have created an Office of the President led by Ajei S. Gopal, who is joining as Interim President and Chief Operating Officer. The Office of the President is expected to remain in place until a new CEO is appointed.
Symantec is perhaps best known for its Norton antivirus and BackupExec software. At one stage also sought to become a serious player in the data storage arena, acquiring Veritas Software for a hefty $10.2bn (£6.3bn) in 2005.
But it failed to adapt to the emerging cloud trend and the decline of the PC industry. The emergence of cheaper and more agile competitors also hit company revenue streams hard. In August 2015, Symantec sold its Veritas data storage business to Carlyle Group for $8 billion (£5.1bn).
And now the company has warned that its fourth quarter financials will not meet its previously issued guidance. Revenue is now expected to be $873m (£597m) compared to previous guidance of $885m (£605m) to $915m (£625m).
That is a bad miss, and Symantec blamed it on a “shift in enterprise security customer buying preferences,” which apparently “is resulting in less license revenue during the quarter and more revenue being deferred to future periods. This included a faster than expected shift within our product mix to subscription and ratable contract structures,” said the company.
Symantec will release its actual Q4 results on 12 May.
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