Compliance, information management and the channel

Symantec's Craig Scroggie and Steve Martin talk about the growing need for compliance and the vendor’s push to enable the channel

How long have you been with Symantec?

Craig Scroggie (CS): I was part of the Veritas acquisition four-and-a-half years ago. For the last two-and-a-half years I've been running the vertical sales business for Asia-Pacific and Japan, which included our telecommunication and financial services units. It was an extraordinary learning opportunity, because of the diversity and complexity of the cultures and markets.

The other lesson I learnt is that economics don't work the same way in Asia as compared to here. We are such a mature market and have similar dynamics to the US and European economies, as well as cost of labour. So we have been looking at ways to standardise and automate software. One of the value propositions for us and our channel is helping customers understand how they can reduce their operational costs by automating processes. Asset management is a great one emerging on the Altiris side of our business, for example. But how about backup complexity? Reducing the size of that infrastructure and putting that money into savings or those people into revenue-generating roles are really the only things customers are interested in.

Along that line is reducing costs associated with compliance or governance, because those issues don't generate revenue. It's about helping customers measure, monitor and manage requirements. Changes to privacy legislation are also coming, which will mean organisations have even more regulation to deal with.

Do you have a software vendor background?

CS: I ran sales for Veritas for a couple of years before we were acquired. Before that I ran sales for the storage and security businesses at CA. Prior to that I was responsible for the channel at EMC back at the time when they acquired Data General. My role was to set up the channel program and I learnt a lot about building a channel in an enterprise business. I was also the sales and marketing manager for Fujitsu for telecommunications and technology, which was a purely distribution business.

You mentioned governance and compliance are key business drivers. Was that the case five years ago?

Steve Martin (SM): No, it wasn't. We've just completed our annual survey of 320 small businesses around Australia. The number one reason for backing up data was compliance and legislation [22 up to 27 per cent this year]. So SMBs are significantly seeing a need to address their compliance and legislative needs, because they're realising that the data they have in their business is not just their's, but also confidential information about clients and suppliers. We were pleased to see that focus on compliance in the SMB space - in enterprise it's been a large driver for the last few years.

CS: Governance and compliance are two different topics, but share a general theme. Most of the big organisations today, including government, see trust as an issue. A predominant concern is that data loss will damage their reputation, brand and stock price, and customer confidence. There's a host of issues customers are concerned about today relating to measuring and managing data loss. Questions they are asking include: Who is taking info outside the organisation? How much is going out? Is data leakage accidental or deliberate? Is it going out on USB sticks, iPods, by email? And exactly what data is leaving the organisation? Most organisations are doing something about it now. The interesting part is that they don't necessarily want to lock information down because they don't want to inhibit or stifle the business' ability to innovate and grow.

So a lot of what we're seeing revolves around knowledge is power and taking action if and when it is required. It will be interesting to see how that then relates to compliance requirements. Everybody knows it's coming and waiting is not an option now. The Office of the Privacy Commissioner and Senator [Stephen] Conroy are both talking about legislative requirements, Internet content filtering, disclosure laws and the like. That legislation concept and having the ability to measure, monitor and report is driving our message.

How does this message affect your channel?

CS: Almost all of our business goes through channel today, except for a small number of legacy agreements with large customers that are still maintained. But even that business has created opportunity for the channel to feed off those contracts because there's so much breadth and depth to them.

Enabling partners to provide services around our products is very important and we're starting to make investments in those areas. Because resources are hard for customers to get in a mature market, there are again huge opportunities for the channel. So we have programs to support development of partners - not just on the licensing side or in enterprise but also in the mid-market and SMB, right through to enabling services, consulting and architecture.

SM: The channel continues to go through an evolution process as it takes on early adoption technologies. Over time, those technologies become more mainstream and often tend to transition from large consulting and services revenue to product and supply. We are seeing the channel get excited around what we are doing in the compliance space because partners see that as a new opportunity to provide some leadership to customers. Virtualisation is another area, and we're seeing a big growth trend around archiving and information retention and recovery. Partners are playing that trusted advisor role by talking to customers about issues that aren't necessarily technology related, but that are solved by technology.

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Are managed services important in that equation?

SM: I don't have actual figures, but managed services is going gangbusters. That's falling into a number of things - basics such as managed backup and security, as well as partners looking at the archival offering and providing that on a hosted basis. There is no doubt that the channel is seeing significant opportunity to value-add and to a large degree, selectively outsource components of a customer's business. We saw the outsourcing boom in the 1980s and 1990s where organisations outsourced entire infrastructure to an EDS or CSC. That began to unravel in the last decade, and now we're seeing selective sourcing - for example, I don't need to devote my resources to backup, I will give it to my trusted partner.

But surely SMBs are still looking for somebody to manage the lot?

SM: That's exactly what's occurring - a managed services provider is typically delivering a handful of services, rather than just providing a managed backup service. Our four biggest areas are backup, security, endpoint and asset management, and archiving. There's also interest in synchronising data between offices and customers. SMBs want one throat to choke - and one partner to manage these things for them.

One of the key things we're doing to help our channel is re-engineering our licensing model for services providers so they don't have to buy the asset. All they have to do is pay a quarterly in arrears fee for whatever product they use.

CS: In the SMB space, customers just want the service levels and they will pay a price for that. A lot of our channel is either using our products or our managed services as a product to manage their customers.

What are some of the challenges for a vendor such as Symantec in the changing security and storage markets?

CS: I don't see many challenges per se; it's genuinely opportunity. We are a very big company and very successful. We have lots of competitors, and they will continue to try and chip away at us. Then there are new companies such as VMware emerging, that have great technology, but we have a lot of solutions in that space, as well as complementary solutions. It's a big area and they're not the only player in that market. The biggest challenge is how we leverage the significance of the opportunity that sits in front of us.

The challenges I see are more around potential economic pressure from the sub-prime market. I think the local market is feeling a little pressure already, but whether it affects the buying appetite of the major corporates is still a question. Generally, you will feel that at the retail end first and we have seen some of that consumer side wane with 12 interest rate rises.

The channel will provide us with success and growth. It's going to come down to our ability to execute.

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Where are the biggest opportunities for Symantec locally?

CS: We're spending a lot of money at the moment enabling the channel to understand not just the products, but the broader Symantec Solutions taxonomy. We've just done an extensive first round of education to help partners understand the automation, software and processes, about minimising IT risk and maximising performance. Customers don't want to buy products - they want us to solve their business problems.

What is your short-term focus?

CS: A priority right now is continuing to build out our training investment. We are also building out the size of our mid-market business and have a number of investments in play to grow that team and service that part of the channel, because that is a critical area of growth. We're also starting to invest in enabling the channel to be able to continue to drive consulting revenue and service delivery. We've got to the point now where we need to invest as much in the service delivery as we have in helping them sell our products.

SM: We are training nearly 1000 channel partners a quarter. About 60 per cent of our training is product; the other 40 per cent is broader picture and solutions, and ease of doing business.

Are you looking at partner specialisations?

SM: We are investing more into recognising partner specialisations. Because there is more value demanded by the customer to make the technology work optimally in their business, there's definitely a bigger requirement for specialisation. We have seen some good results in the archiving space where we have gone to a sub-set of partners and worked with them as archiving specialists across the country.

What other initiatives is Symantec working on?

CS: We recently announced a child safety initiative called Project Watchdog. There are so many things targeting financial gain - phishing, spammers, online fraud - but the reality is 96 per cent of attacks today are on home and individual users because they don't have the same resources available to protect themselves. Even more of a concern is protecting children on the Internet. We need to agree on usage policies and the collaborative process, not just technology.

Online crime and the underground economy continue to present challenges for customers. It's a multi-billion dollar industry and the anonymity the Internet provides is going to open up opportunities for the channel to educate those customers.