Antivirus kings fight good fight

Just as war is the downside of the human pursuit of happiness, the path to a wired world has been paved with a proliferation of malicious computer viruses and hacker activity. Fighting the good fight - albeit for profit - are two software giants in the anti-virus industry, Symantec and Network Associates. The latter has done much in the last couple of years to undermine the dominant market share once held by its rival, Symantec.

Symantec managing director for the Republic and Britain, Mr Aled Miles, was in Dublin last week for a spot of profile building, because, Mr Miles admits, Symantec has "neglected" the Irish market to date. His visit is also part of a wider Symantec strategy to extend a new global message that the company has finally found a focus.

Symantec may not be a household name, but its flagship product range of Norton utility software has long been the saviour of PC users wishing to arm their computers against unwelcome attacks. Since the 1980s Symantec has pursued an aggressive acquisition strategy, practically hoovering up independent anti-virus companies everywhere, the largest of which was Mr Peter Norton's Delrina Technologies (WinFax). It soon became apparent the company had too many products catering half-heartedly to the entire gamut of computer security, from PKI and encryption products, to anti-virus and e-mail products.

"The market was saying don't try and be everything to us - you can't have that much core competency. IT directors weren't convinced of our expertise spanning the entire market," Mr Miles says.

Symantec announced a few months ago that it was realigning itself to focus on "content security and remote device management". A simple mission statement designed to have instant appeal to industry analysts and investors alike, the stock price has rallied from an $8 (€7.47) low earlier this year to $38 this week.

Much of the turnaround is attributable to a new face at the top of the Symantec corporate ladder. In April, Mr John Thompson was appointed chairman and chief executive officer of Symantec when he left an extremely powerful role as general manager of IBM Americas.

Mr Thompson's appointment caused a minor kerfuffle in Silicon Valley, as it marked the first time an African-American had been appointed to head one of the top 150 publicly traded companies in the Valley. Overnight Mr Thompson unwittingly became a sort of champion for ethnic minorities seeking parity in the workplace.

Prior to his arrival, Symantec was almost punch-drunk from the Network Associates assault. It was apparent Symantec needed to turn its focus to large business customers.

"Mr Thompson brought a clarity and vision which satisfied analysts and investors. We needed to simply focus on content security and remote management of laptops," Mr Miles says.

Content security includes antivirus, e-mail and mobile code products which will monitor and protect business software from unwanted intrusion.

"Companies jumping on the e-commerce bandwagon are immediately opening up their systems to all sorts of information flows. Their concerns should be a protective firewall and defence against data damage," Mr Miles says.

This all points to a shift for Symantec out of the traditional off-the-shelf retail market, and into the more lucrative corporate licensing business.

At the moment boxed software accounts for around 50 per cent of Symantec's revenues. There is now a clear plan to reduce this figure, replacing it with licence-driven business.

The rapid development of the Internet has opened up an entirely new mode of distribution for Symantec. Eight months ago Symantec stopped sending manual virus updates out of its factories, and today all of this activity is conducted online. The saving to Symantec has been in the region of $1.2 million per quarter.

However, Mr Miles is adamant this does not bode ominously for the 350 or so Dublin-based Symantec employees who work mainly in manufacturing activities.

"Of course the largest single purchase on the Internet is software, and there is an inevitability it is affecting our business model. But this does not mean people employed in the manufacture of boxes cannot be transferred to other useful functions," Mr Miles says.

He adds that the demand for boxed software will be sustained as long as the entire software industry continues growing at its current pace. At the moment downloadable products account for around 7 per cent of Symantec's business, and Mr Miles can only envisage this rising to around 25 per cent within the next five years.

The company plans to continue channelling its product through independent resellers, rather than opting for the direct-to-user model.

"Resellers are traditionally better at selling software to end users. It's not our core competency, which is to maintain a clean pipe for organisational communication," Mr Miles says.

There is no doubt, however, that Symantec is looking toward a dramatically different horizon, and despite its new focus, it still seems a little unclear about its future role. It knows what market it is targeting, but the means of delivery and product mix need to be resolved. There is a possibility the company will clearly split its operations into corporate and consumer divisions allowing clearer roadmaps to emerge for each. The likelihood would be that Symantec would bow gracefully out of the consumer market to focus on the high margin licensed business.

Also in the air is an expected announcement of a global venture between Symantec and a large US Internet service provider. Although details are not forthcoming, there is obvious scope there for product or upgrade deliveries on a mass scale.

Symantec is also turning its attention to intrusion detection software which operates biologically to tackle hostile software codes. In July, Intel, IBM and Symantec jointly released new antivirus software called a "Digital Immune System". When one computer is hit by a virus it automatically deploys the antivirus response over the corporate network, and relays suspect programs for immediate inspection.

With 42,500 contained viruses in existence, and 361 still untamed, Mr Miles is confident Symantec's future is secured as one of the leading providers of "barbed wire" for the brave new wired world.