Big changes are afoot in Symantec's e-mail and content archiving unit, Enterprise Vault, according to reports.
Industry analyst David Ferris wrote in a research note yesterday that the security vendor has laid off its Enterprise Vault sales and technical services staff, but the change is not just a cost-cutting maneuver, he said.
Instead, it's a sign of the product's maturity, at least according to Ferris.
"Apparently this is part of [Enterprise Vault] reaching critical mass in overall sales and being moved to the general sales force," Ferris wrote. "However, perhaps the state of the economy plays a factor."
Symantec (NASDAQ: SYMC) did not respond to requests for comment. It's unclear how many employees will be affected by the cuts at Enterprise Vault, which Symantec acquired through its $10.5 billion purchase of Veritas Software in 2005. The company employed approximately 17,600 worldwide as of March.
The layoffs come as storage vendors are being challenged by a depressed economy that is prompting many businesses, vendors and buyers to pull back on spending and to scrutinize internal costs. But so far, storage has been one of the stronger IT sectors in the downturn, as companies continue to need a place to store all their data. On Monday, HP (NYSE: HPQ) reported a 13% jump in storage sales, led by 16% growth in midrange arrays.
Industry observers agreed that the changes take advantage of a mature offering to save money.
"This is a smart business move overall," said Brian Babineau, senior analyst at Enterprise Strategy Group. He added that as a product matures, it no longer needs a specialized sales team and a generalist staff can take over.
"While they run a risk that their general sales staff might hit a few bumps in today's rocky economy, it's a good move, cost-cutting wise," Babineau said.
Slashing costs is big on Symantec's to-do list these days. The security vendor announced a separate round of cuts on Oct. 30, trimming 4.5 percent of its workforce, according to Ferris.
Last week, Symantec announced that CEO John Thompson was stepping down and would be replaced by Enrique T. Salem, the company's chief operating officer.
Also in October, the company made a big move to shore up its position as a software-as-a-service (SaaS) security player, buying up MessageLabs for $695 million in cash.
But the additions and subtractions to the company's business will take some time to sort out, another industry observer said.
"Symantec has been on a bumpy road the past several years following the acquisition of Veritas, among others, resulting in a broad and diverse product lineup," said Greg Schulz, founder and senior analyst at StorageIO.
"At times, it can be confusing to determine what solutions a customer needs, let alone the associated cost of marketing, selling, servicing, supporting and maintaining all of that software at the high end for the enterprise, and down to the low end for smaller business," Schulz said.
Charles King, principal analyst at Pund-IT, said he sees the Enterprise Vault sales cut as "proactive," and that it could also reflect changes in customer needs and evidence in changing priorities for the vendor, given the chilly economic climate.
"It may be that customers are now doing the installation and services themselves as a way to save on costs," said King.
"Right now, I think everyone is prepping for what's going to be a long cold winter that could easily extend into summer," he added.
Article courtesy of Internet News