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Symantec CorporationA Growth Culture
Kevin Bailey
Director, Product Marketing EMEA
February 2009
You have to learn the rules of the game, and then you have to play better than anyone else.
Albert Einstein 1879-1955
2Symantec FY10 Planning Overview
Macro Economics
The US and global economy is in a recession which will last into 2010 (18 month minimum).
As a result, the tech market will see slow growth for the next 3-4 quarters, then start to improve in late 2009.
The US and global economy is in a recession which will last into 2010 (18 month minimum).
As a result, the tech market will see slow growth for the next 3-4 quarters, then start to improve in late 2009.
Source: Forrester & IDC
SYMANTEC CONFIDENTIAL – NOT FOR UNCONTROLLED DISTRIBUTION
3Symantec FY10 Planning Overview
Switzerland
Turkey
EMEA Countries by Population
Rank City Population
1 Russia 140,702,096
2 Germany 82,469,552
3 Turkey 71,892,808
4 France 64,057,792
5 United Kingdom 60,943,912
6 Italy 58,145,320
7 Spain 40,491,012
8 Switzerland 7,581,520
9 Norway 4,644,457
10 UAE 4,621,399
Italy
Norway
UK
Germany
France
Russia
UAE
Spain
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4Symantec FY10 Planning Overview
A Snap Shot of the European Union
Source: CIA 2008, International Monetary Fund..
Rank Region GDP (PPP)$M
World 64,903,314
EU 14,712,369
1 United States 13,807,550
2 China 7,034,838
3 Japan 4,292,198
4 India 2,996,588
5 Germany 2,812,255
6 UK 2,167,837
7 Russia 2,089,607
8 France 2,067,707
9 Brazil 1,837,149
10 Italy 1,787,897
Population of the European Union 491m
Unemployment Rate 7.2%
Current Inflation Rate 3.7%
Gross Domestic Product -1.8%
Internet Users 247m
Market Value of Publicly Traded Shares $15.5 Trn
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Labour Force 224m
2009 Infrastructure Software Spend $31.6 Bn
5Symantec FY10 Planning Overview
The Big Picture
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• Business Strategy
– Focus on installed base
– Take share from weaker competitors
– Outlay will provide accelerated ROI
– Exploit opportunities for alternative IT delivery models: Residency, Managed Services, SaaS, etc.
2009 IT spending estimates range from -10% to +3%The Economist Forecast
Given technology’s role in productivity, cost control and competitiveness, IT spending will outpace GDP growth in rich countries as well as developing ones.
The Economist Forecast
6Symantec FY10 Planning Overview
IT software market expected to decelerate, but will fare better than the overall IT sector
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Worst case scenario
Overall globalIT market growth will
slow from 7-8%to 2.3%
Infrastructuresoftware is
expected to be more resilient to economic
downturn
Downturn willbe shallow
with no v-shaped
recovery
Spending expected toremain soft over the next 4 to 6 quarters
Software license revenue declinesare likely
EMEA is
expected to have 2-3 quarters of flat to negative real growth ending
in the latter half
of 2009
SaaS revenue expected to
account for between 3-5% of current license revenuesuntil 2010
Storage SW to reduce by 1.6% in 2008 and 2.8% in 2009(IDC)
Security Software to
reduce by 50% in 2009
7.7% (from
14.61%)
Recovering to
8.5% in 2010
Worst case scenario
Global IT SW spending is
expected to decline by1-2% in 2009
Maintenance growth should
decelerate but
remain relatively
resilient and
continue to grow
7Symantec FY10 Planning Overview
Projected Slowing of IT Software Spending Expected to Shift Customer Priorities
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Sources: Goldman Sachs, IT Spending Survey 11/2/08; Gartner CIO Spending Survey 10/27/08
Projected IT Spending GrowthCY2009
OverallIT Spend
Developed Markets
-1%Emerging Markets
-5%
7%
IT Spending Trends:•Most CIO budgets will decrease in 2009
•Discretionary IT projects will be put on hold or postponed
•Focus on cost predictability
•Evaluate mix of fixed / variable IT costs
•Retire non-essential assets/applications
•Focus on cost-reduction vs. revenue-growth projects
Which Result in:•Spending on hardware and professional services will decrease significantly
•Security software spending expected to increase
•Investment in hosted and SaaS basedsolutions will increase
9Symantec FY10 Planning Overview
Clouds and silver linings in the economic outlook
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Source: Bank of England, Forrester & IDC
Clouds that will keep economic growth weak
Silver linings that will foster a recovery in [late] 2009
• Tight credit will last until Tight credit will last until 20102010
• $2.8 trillion $2.8 trillion in credit crunch losses and state in credit crunch losses and state bail-outs totalling bail-outs totalling £750 Bn £750 Bn worldwide.*worldwide.*
• US housing market will continue toUS housing market will continue toweaken (weaken (20.3% down since June 2006)20.3% down since June 2006)
• UK -17% (1% up turn Jan 09)UK -17% (1% up turn Jan 09)
• Job losses will increaseJob losses will increase
• US predict US predict 8.5%8.5% (worse since 1980) (worse since 1980)
• UK at UK at 6.3% 6.3% (55k per day in EU)(55k per day in EU)
• US consumers will be focused on building US consumers will be focused on building savings, trimming consumptionsavings, trimming consumption
• Major industrial countries are Major industrial countries are allall in recession in recession
• Energy prices down by half fromEnergy prices down by half fromtheir 2008 peaktheir 2008 peak
• Interest rates are coming down (1%)Interest rates are coming down (1%)
• Government economic stimulusGovernment economic stimulusprograms will comeprograms will come
• UK Banks providing £3Bn Funds for UK Banks providing £3Bn Funds for SME’sSME’s
• Many corporations have limited debt, Many corporations have limited debt, strong cash positionsstrong cash positions
• China and some other emerging markets China and some other emerging markets still growingstill growing
10Symantec FY10 Planning Overview
Know which industrieswill suffer most…
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CENTRAL & LOCAL GOVERNMENT INSURANCE TELECO MEDIA & ENTERTAINMENT TRANSPORTATION SOME PROFESSIONAL SERVICES
FEELING THE PINCH
FINANCIAL SERVICES CONSUMER DURABLES CONSTRUCTION AND HOUSING RETAIL
HARDEST HIT
PRIMARY PRODUCTION OIL & GAS HEALTHCARE EDUCATION INDUSTRIAL MANUFACTURING
LEAST IMPACT
11Symantec FY10 Planning Overview
IDC & Gartner Market Commentary
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Source: IDC, Gartner
Storage & BackupStorage & Backup
Increased number of govt. investigations
Post Y2K refresh cycle
Server virtualization driving re-architecture
Time of recovery + amount of data to recover
Moving from tape to disk backup
Projects that can be turned quickly
tailwindstailwinds
Macro-environment
Lack of brand loyalty. Re-architecting opens discussion, risk with dissatisfied customerswhere switching costs are low
Limited new initiatives
headwindsheadwinds
Refresh cycles will be pushed out
12Symantec FY10 Planning Overview
IDC & Gartner Market Commentary
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Source: IDC, Gartner
Security & Systems ManagementSecurity & Systems Management
Compliance and audit requirements
Enterprise preference for leveragingexisting vendor relationships and
reducing number of vendors
Demand for more integratedsolutions and decreased complexity
Increase in cyber crime
tailwindstailwinds
Macro-environment
Refresh cycles pushed outand extended sales cycles
Retail decline
headwindsheadwinds
Increased cautiousness
Emerging market preference for regional players
Consumer freeware adoption
Bleed of trust
13Symantec FY10 Planning Overview
Analysts Recommendationsfor Software Vendors
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Problem/Issue IDC Approach Gartner Approach Forrester Approach
Customer Cutting or Delaying Investment
Always be able to answer the ‘So what’
scenario
Only sell what’s required. Sales 101
Sell Value,Focus on Payback
Customers are capital constrained
SaaS / Cloud Opportunity
Reconsider Budget priority
Alternate Licensing models
Customers resist higher maintenance fees
Analyse cost or face loss to local vendor
Don’t drop price, sell value of offer
Give some ground, agree to share the pain
Partner ecosystem is underperforming
Target top performers and invest
Re-evaluate and then re-align
Focus on enablement, compete for mindshare
Product portfolio shows mixed results
Invest in Portfolio analysis
Stars and Cash cows, then decide about dogs
& ??’s
Focus marketing on better performers
Sales Org is complacentat the top
Re-focus routes to market
Reduce headcountChange compensation plans to leverage focus
Source: IDC, Gartner, Forrester
14Symantec FY10 Planning Overview
2009 Vertical Market Growthand Technology Spend
IDC, Sept 2008
15Symantec FY10 Planning Overview
EMEA Region
• Western Europe suffers from tight link to US, but Government is moving decisively to avoid prolonged downturn
• As credit markets improve, large enterprises and the public sector continue to spend on infrastructure software with increasing emphasis on efficiency, SaaS & Virtualization
• Consumer driven recession impacts small enterprises / consumers, pressuring the SMB market (SaaS increasing relevant)
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Projected GDP Growth CY09April 08 vs. February 09 Forecast
Apr 08 Oct 08
Feb 09
5.3%
2.4%
-1.8%
EMEA IT Spend $m2008 – 2010 (Est)
2008 2009 2010
609631
667
16Symantec FY10 Planning Overview
IT Spending Overview : UK & IRE
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Source: IDC (Dec 2008)
Calendar Year 2009 YoY Growth
Total IT0.0% $97,162m
SW2.5% $20,274m
Services2.7% $51,076m
Printers-1.1% $2,437m
Network-1.2% $6,837m
Storage-3.2% $1,577m
Servers-7.7% $2,263m
PCs-13.2% $9,594m
Infrastructure SW3.9% $5,858m
Applications1.5% $9,662m
Appl. Development3.0% $4,754m
EPS 9.0% $422m
Message Security 9.0% $88m
Web Security 9.0% $88m
Network Security 13.9% $72m
Compliance 17.3% $216m
Backup 3.1% $265m
Online Backup n/a n/a
Email Archiving 14.7% $102m
VCS 4.0% $151m
EM 3.8% $190m
File System 4.2% $33m
Storage Infrastructure 3.9% $82m
Storage Management 2.9% $84m
Consumer n/a n/a
17Symantec FY10 Planning Overview
*Note: Storage & Security markets in EMEA only. Consumer Excluded.
EMEA Storage & SecuritySoftware Spend CY09
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Source: IDC, Symantec Custom Model EMEA, Jan 2009
Enterprise
1000+ employees
$2952M +6.3% 36.8%
Mid-Market
100-999
$3497M +9.4% 43.5%
Small
10-99
Market Size 2009 Growth Market Split
$1582M +8.0% 19.7%
18Symantec FY10 Planning Overview
Economic Index
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F E B R U A R Y 1 2 1 9 9 9 T O F E B R U A R Y 1 3 2 0 0 9
Symantec FY10 Planning Overview
-34%-41% -47%
-91%
-7% -33%
2321 1534
2.31 14.6
44.518.64 25.5912.06 50.61 5.14 38.2135.86 44.6230.32
20Symantec FY10 Planning Overview
FY10 : EU Spend on IT
Total IT Spend
$631BnTotal IT Spend
$631Bn
Total SW Spend
$110BnTotal SW Spend
$110Bn
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Symantec Storage& Security SW
Opportunity
$8Bn
SymantecShare 19%
$1.5Bn
SymantecHeadroom 81%
$6.5Bn
Total Infrastructure SW Spend
$31.6Bn
Total Infrastructure SW Spend
$31.6Bn
25Symantec FY10 Planning Overview
UK/Ire Region : Franchise Metrics
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Data Protection Market Opportunity being challenged with IDC
EndpointManagement
EndpointProtection
Suites
BackupExec
Veritas Cluster Server
Storage Foundation
NetBackup
Opportunity Growth
EMEA MARKET FY10
Mkt. ShareSYMC
Mkt. Position Mkt. Leader Major Threat
EMEA MARKET FY08
$190.2m 3.8% (6.6%) 11% (Up) #4 Msoft (18%) IBM (14%)
$422.4m 9.0% (15.9%) 18% (Down) SYMC McAfee (12%)
$119.4m 3.1% (4.3%) 39% (Flat) SYMC IBM (13%)
$151.5m 4.0% (5.0%) 16% (Flat) #3 HP (26%) Msoft (25%)
$374.1m 3.7% (6.0%) 13% (Up) #3 EMC (30%) NetApp (18%)
$145.9m 3.1% (4.3%) 39% (Flat) SYMC IBM (13%)
26Symantec FY10 Planning Overview
UK/Ire Region : High Growth Metrics
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**Messaging Security Market Share aligns to Antispam only
MessagingSecurity
Compliance
Archiving
DLP
Opportunity Growth
EMEA MARKET FY10
Mkt. ShareSYMC
Mkt. Position Mkt. Leader Major Threat
EMEA MARKET FY08
$88m 9.0% (15.9%) 22% (Flat)
n/a
SYMC McAfee (12%)
$216.3m 17.3%(24.4%)
8% (Flat) IBM (9%) Attachmate(6%)
$102m 14.7%(11.2%)
16% (Flat) #3 IBM (27%) Autonomy(20%)
$47m 114% (120%) n/a n/a n/a
#2
27Symantec FY10 Planning Overview
Thank You