Q&A: New Symantec CEO Talks Blue Coat Acquisition, Integration Roadmap And Plans For Partners

Changing Of The Guard

Symantec fulfilled its promise to put the proceeds from the Veritas split to good use, announcing late Sunday night that it planned to make a blockbuster $4.65 billion acquisition deal for cloud and web security company Blue Coat Systems. As part of the deal, Blue Coat CEO Greg Clark would assume the role of CEO at Symantec, filling a vacancy left by the announcement in April that current CEO Mike Brown would be stepping down.

Clark will assume the CEO role when the acquisition closes, which is expected to happen in the third calendar quarter of 2016. On an investor call Monday morning about the acquisition, Clark answered questions about the benefits of the deal, plans for technology integration, and what the role for partners will be with the combined security vendor. Take a look at what he had to say.

What is the strategic rationale for this acquisition?

I'm very excited to be leading Symantec. Since I was a junior in the laboratories many years ago in the mid-80s in the Unix software operation, I was fascinated around security issues and that passion is alive and well today. Symantec has a phenomenal history of solving very difficult problems in cyber defense area, across consumer and enterprise. Combined with Blue Coat…we have the technical power and the intellectual property to really change the industry and how that works. I'm very excited about that.

I am a leader that is extremely financially aware and lead an organization that I call "P&L Aware" across the organization. I'm confident that we will deliver [on] the commitments to the shareholders around the margins for the business in the future. With that, at the end of the day, exciting customers is what drives top-line growth.

How are Symantec and Blue Coat in the best and unique position to realize these benefits?

The combination of our threat intelligence databases and the immediate effectiveness gains that brings to our web gateway and our endpoint…really sets us apart from the competitors…The advanced threat protection from Symantec is fantastic, coupled with what we're doing with advanced threat products at Blue Coat, delivers a solution that is highly differentiated…The market leading cloud solution…we'll pair that up with the email capabilities of Symantec and the DLP capabilities of Symantec, I think that offering, with our CASB [cloud access security broker] and cloud data protection layers, is by far and away the best solution. The endpoint, we believe we can integrate the endpoint with our cloud. That brings massive value propositions, both for consumer and enterprise endpoint.

We feel very strongly about a number of these vectors and there are a number more also. The roadmaps from the Symantec laboratories and Blue Coat laboratories are excellent. I think just executing what we've already committed to the market is already fantastic. I feel very good about where we are…This is a monumental day for cyber defense and cyber security. I think we will look back on this combination for many years to come and it will be the defining moment of the next generation, in a cloud generation of security systems.

You will now have a very broad portfolio. What product integrations are the highest priority?

I think [threat intelligence] is an integration that give us immediate benefit without having to go and change a whole bunch of code in the basic products. Our ability to integrate the threat intelligence into the email systems, the secure web gateway systems, the endpoint systems, really brings the effectiveness of those products all the way up…We're very excited to be able to do that and do that at a rapid pace.

In addition to that, there are some really easy things that we can do that will drive great revenue upsides for us. One that is extremely important is the DLP [data loss prevention]. Blue Coat's ProxySG [gateway] is orchestrating most of the enterprise DLP market and integrating that into a consistent solution from Symantec is really going to be a great tailwind for our enterprise business…Then for the advanced threat, the cloud-based ATP and sandboxing capabilities of both Blue Coat and Symantec really deliver what we think is really going to change the industry in the detection of zero day threats and previously unknown malware…We are very excited about our email technologies…These are things that we can do without boiling the ocean in the engineering lab and come out with something in a year and a half. These are very immediate things that we can pull together quickly.

How will the sales forces be integrated?

I really care, as you know, about the effectiveness of our sales machine. We are making huge steps to ensure that we don't miss a beat on the go-to-market during the integration. Mike Fey, who runs that for Blue Coat, is a master in this area. Working with [his] counterparts at Symantec, we will make sure that we keep that momentum moving. From a demand point of view, we have a very strong demand vector in the business right now, so we feel good about our sales force capacity and the capacity of our sales force being bolstered through the combination. There is plenty of room for optimism because of that statement. Good sales folks always have a role in our companies. SEs [sales engineers] matter and good reps matter and we intend to continue to take good care of our channel, as we have done over the past few years…That is a major care about and something management is all over.

What drew you to Symantec from a product perspective? What is unique?

A couple of things. First of all, the people at Symantec labs that I've known and that I met during our work are some of the very best in the industry. That kind of intellectual horsepower coupled with ours is very, very strong. The major piece is the reach of the threat data that Symantec has is second to none. When you have that many endpoints, especially the consumer endpoints…I know that when we integrate that into the product sets that we have, we will become the most effective organization at stopping malware and stopping cyber threats…The other stuff, there is just some very tactical, simpler things that are going to drive revenue and excite our customers, like DLP, like the endpoint with cloud, like the cloud ATP [advanced threat protection] that Symantec has.

Will the Blue Coat integration be the primary focus or can we expect further acquisitions?

Right now, we feel extremely bullish about the portfolio we have with the Blue Coat and Symantec combination. That is, we think, going to excite our customers and our shareholders will get great benefit from that. I also feel really strongly about the strength of our balance sheet and the strength of our balance sheet in the coming years. Once we deliver on the commitments…we not only will have the most formidable product line, but we will also have the strongest balance sheet. That definitely is a huge competitive advantage.

Historically, companies have been challenged to bring together endpoint and network security companies. How will you do that differently?

I think times have changed…It is not congruent to think about an endpoint that isn't connected to the network, that isn't going to roam in and out of the CIO's infrastructure all the time…We already have at Blue Coat substantial integration to endpoint with our security cloud…We think it is absolutely tractable to integrate the endpoint from Symantec with that and provide an amazing onramp to the mobile workforce to keep a defense in depth coverage while roaming. We feel pretty good about that problem and technically we have a line of sight on how to do that. I would really think hard about trying to compete with that when we have everything that the EDR [endpoint detection and response] endpoints have, we can isolate threats whether they're in the office or out of the office, we have network intelligence watching what's coming out of the network in the cloud or on prem…and I think that kind of flexibility is unparalleled right now and we will deliver that in an integrated package…I feel really good about whether we can get endpoint and network to hunt and that's something that I'm personally excited about solving.

How does this position Blue Coat in the changing cloud security market?

If you think about the industry in 24 months and in 36 months out and if you're an investor…what is the world going to be like 36 months from now? With the massive transformation that we are feeling in our customer base around the cloud adoption, there is a fundamental change happening that I'd like to comment on. When you go to Amazon AWS or you go to [Microsoft] Azure, you don't get to pick your firewall. The firewall and the load balancers are decided for you in their infrastructure. The defense in depth that is required to fight against cyber threats becomes a web dial tone conversation…The reason why we are seeing unprecedented demand for secure gateways is they are a massive part of the future. Proxies are the new black. If you think about that for a while, you will really get behind what we're doing. We own the web dial tone. We intend to own cloud. We are doing very well in that right now. With the power we're bringing to the market now, we expect to dominate…That is something where we won't see a lot of incumbency and a lot of white space with customers. We hope to ride some of that growth and we feel really good about that.