Inciting: Symantec strategy story and Merrill downgrade

I was heavily quoted in Bill Brenner's analysis of Symantec's strategy on SearchSecurity.com last week. The link is here. Anybody who's been reading for more than a week or two knows that I think Symantec has a lot of work to do to execute amongst a number of strategic blunders. Bill does a good job of laying out the issues and substantiating the points in the article.

The news continues to get worse for SYMC, especially if you are a shareholder. As SYMC announces their Q1 (June) results this afternoon, Merrill Lynch pre-emptively piled on by downgrading them ahead of the curve. The kind folks at ML send me their research and their analysts, Ed Macuire and Garrett Bekker bring up a number of pretty good points, all of which I agree with.

Basically they are concerned about how Symantec is going to compete in a tougher environment, both on the consumer side (where competitors are going to have new products well in advance of SYMC) and on the enterprise side (where the sales cycle is more complicated and the fragmented market makes achieving scale harder).

ML also points out that Symantec doesn't really have any identity "glue" to hold together their security and storage offerings. That's something I wrote about when discussing the EMC/RSA deal (links here and here).

One point of contention is that I still fundamentally believe that customers want integrated solutions. Just because Symantec has failed to deliver them, doesn't mean that customers don't want them. Sure there are lots of start-ups to complicate matters, but "Big is the new small" still holds, with the major caveat being - ALL OTHER THINGS BEING EQUAL.

Customers will buy "good enough" if it's integrated. They won't buy not good enough. It seems Symantec is finding that out the hard way.

If there is anything interesting in the earnings results I'll post after the bell. If not, I'll cover it in tomorrow's TDI.