It appears that breaking up is getting easier to do in Silicon Valley.
A report from Bloomberg says that security giant Symantec may be “exploring a breakup.” One of the Symantec companies would sell security programs, and the other would focus on data storage, Bloomberg says.
If true, it would be the third tech giant to pursue that option. Just this week, Hewlett-Packard announced it was splitting into two companies. And of course, last week, eBay said it was planning to separate PayPal next year.
Does three make this an official thing? Hard to say. But as Marc Andreessen tweeted about the Symantec news: “It’s as if there is some kind of trend afoot…”
In the case of Symantec, it’s been a rough couple of years at time that should have been gonzo for a company in the business of computer security. Hacks and infiltrations are on the rise, and data thefts seem to make big headlines almost daily. And yet, over the past year, Symantec has floundered.
Revenue was down over the past year. And earlier this year, Steve Bennett, who was attempting to implement a big reorganization, was fired as chief executive officer after only two years.
Symantec has been perpetually stymied about how to handle its 2005 acquisition of Veritas Software. At $10.2 billion, it was one of the largest deals in Silicon Valley over the past decade. And yet, it has failed to pay off in any meaningful way.
Like HP and eBay, undoing the deal or splitting up has long been advocated by analysts and investors. So, there is some sense of giving into the inevitable here.
But why is breaking up the new, new, new thing?
Part of the problem is acquisitions. All three of these companies spent a bundle on big deals, touting the big opportunities. However, as it often the case, these turn out to be wishful thinking. With the result being that the big corporation becomes an unwieldy, inefficient mess to run.
Now, one can hardly stick a fork in the era of big tech companies and declare it done. After all, companies like Apple, Google, and Facebook are bigger than ever and still growing at insane paces. When they’re not gobbling down every other startup, they’re trying to hire every developer with a pulse.
And yet, it will be worth watching closely to see if other tech titans that built themselves on layer after layer of acquisitions, like Cisco Systems and Oracle, will start to consider ways to make themselves leaner.
The cautionary tale, if there is one, appears to be this: The ability to acquire and hire at lightning speed to get big can be great when the wind is at your back. Enjoy the moment.
But if the world or markets or technology shift, then watch out. That size is going may be a weight that makes it hard to change and keep up just at the moment when you need to be faster than ever.
HP, eBay, and now, possibly, Symantec, are acknowledging that. And they’re shedding pounds as quickly as possible to try to get back in the race.
HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses (SM… read more »
eBay Inc. connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive onl… read more »
Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at m… read more »
PayPal is the faster, safer way to pay and get paid online. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promot… read more »
At Veritas, Inc., we believe the success of a company is in direct correlation with the success of every individual that makes up its workforce. We value integrity and work ethic, as they are imperative instruments in the evolution of … read more »
In Silicon Valley, rumors of Symantec breakup latest sign that big is not so beautiful
No comments:
Post a Comment