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Security Market Continues To Grow

Posted on Monday, Sep 26th 2011

According to Gartner, Governments, corporations and individuals spent $16.5 billion on security software last year – growth of 12% over the previous year. Last year, Symantec captured 19% of the security market share and was the leader in the segment. Spending on security software is expected to grow 14% in 2011 and another 10% in the following year. IDC meanwhile estimates that security spending will grow annually 9.1% over the year through 2013.

Symantec’s Financials
Symantec’s (NASDAQ:SYMC) Q1 revenues grew 15% over the year to $1.65 billion with EPS of $0.40. The market was looking for revenues of $1.59 billion with EPS of $0.37.

For the quarter, international revenues grew 52% of revenues and grew 21% over the year driven by 16% growth in Europe, Middle East and Africa region and 29% growth in Asia Pacific/Japan revenues. The Americas, including the United States, Latin America, and Canada, represented 53% of revenues and grew 11% over the year.

For the current quarter, they are projecting revenues of $1.66 billion-$1.68 billion with EPS of $0.38-$0.39. The Street was targeting revenues of $1.62 billion with EPS of $0.38.

Symantec’s Acquisitions
During the year, Symantec plans to spend $1.25 billion over the year on acquisitions. Recently, they acquired Clearwell Systems Inc., software provider of handling legal documents, for $390 million. Clearwell is the provider of industry’s archiving, backup and eDiscovery offerings. Symantec hopes to deliver a cost-effective solution to customers for comprehensive information management solutions.

Symantec’s Focus on Mobile
As part of their mobile offerings, Symantec launched new mobile beta products. Norton Mobile Security for Android 2.0 features anti-phishing technology to secure users who access e-mail on smartphones. The app has been downloaded from the Android market more than 600,000 times. Norton Online Family also added a new mobile application that lets parents view their children’s online activities from their Apple and Android devices. They also expanded their OEM relationship with Toshiba and Lenovo to provide Norton Mobile Security with their tablets.

Symantec’s Focus on Cloud
They recently launched Backup Exec 3600 and NetBackup 5220 enterprise backup appliances that will help organizations modernize backup infrastructures and accelerate initiatives around virtualization. They also expanded their partnership with VMware to deliver Desktop-as-a-Service solutions to help provide secure, pre-integrated and well-managed enterprise-quality virtual desktop computing environments for enterprises and IT service providers.

The stock is trading at $16.17 with a market capitalization of $12.1 billion. It touched a year high of $20.50 in May of this year.

Websense’s Financials
Websense’s (NASDAQ:WBSN) Q2 revenues of $90.7 million grew 11% over the year. EPS for the year grew 57% over the year to $0.11. Revenues from software and services of $81.0 million grew over previous year’s $79.3 million and Appliance revenues of $9.8 million grew over previous year’s $2.6 million.

During the quarter, they repurchased shares of 1.0 million shares for approximately $25 million.

Websense’s Accolades
Websense received multiple awards from the market during the quarter. They were named a leader in the 2011 Magic Quadrant for Secure Web Gateway from Gartner and the Value Leader and Best Hybrid Strategy by Enterprise Management Associates.

Their stock is trading at 52-week lows of $17.00 with a market capitalization of $690 million. It touched a 52-week high of $27.96 in March of this year.

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