Symantec's planned acquisition of Axent will dramatically boost its six-month transition into the enterprise space and put it head-to-head with rival Network Associates (NA).
Symantec's current product range covers the traditional home user, and the anti-viral and basic management needs of small and medium enterprises. However, Symantec has been eyeing the enterprise market - with its 32% compound annual growth rate (CAGR) - for some time.
Axent's products span security assessment, protection through firewall technology and intrusion detection, sign-on and authentication offerings, and some Unix management products. Symantec's Enterprise Solution (currently in version four) focuses on anti-virus technology, although it does have some service level agreement and policy and system management features.
The deal will also give Symantec a broader range of platforms for its enterprise product. It currently supports Microsoft Windows and Novell Netware, while Axent also plays in the Unix and OpenVMS space.
There is some overlap between Axent's Enterprise Resource Manager product and Symantec's Enterprise Solution. They both have policy management and service level agreement, although Axent's version is targeted at assessment, while Symantec's Enterprise Solution slots under protection.
"Symantec of old used to buy companies to get critical mass, but we found we ended up with products that didn't have much to do with each other," says Richard Saunders, Symantec's director of public relations for Europe, Middle East and Africa.
"We decided we want to be an Internet security company, and have since been buying companies with products to take us towards that goal."
Saunders points to the acquisition of L-3 Network Security and URLabs as companies purchased for their critical technology.
The offering resulting from the acquisition is similar to NA's product line. NA was created as a merger between McAfee anti-virus vendors and Network General in 1997, kick-starting the security market consolidation period (Symantec bought Norton in 1990).
NA currently offers the Gauntlet firewall solution, the McAfee anti-virus range, and network management tools through its Sniffer brand. Symantec and NA are long-time nemeses, with a slew of court cases initiated by both parties occurring over the years.
Now they will be competing head-to-head for the same market, after diverging between 1997 and 2000 - Symantec taking the lower tiers, while NA tackled the enterprise market. NA has already stated that the Axent merger is a result of Symantec following its lead.
"We've always been a competitor with NA, Trend, and a couple of other companies, but we've proven time and again our ability to grow in face of competition," says Saunders.
"We are not following their lead," he adds.
The Axent deal is a stock-for-stock transaction valued at approximately $975 million. Symantec's total market opportunity is expected to increase from $5 billion to $7 billion.
The International Data Corporation estimates that the $1.5 billion content security market (which includes anti-virus and content scanning and filtering) is expected to grow at a 32% CAGR to $4 billion by 2003.
The $150 million vulnerability assessment and intrusion detection market is expected to grow at a 48% CAGR to $1 billion by 2003. The $500 million firewall market is expected to grow at a 26% CAGR to $2 billion by 2003.
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Symantec strengthens security leadership with acquisition of Axent
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