Symantec Corporation (SYMC), AVG Technologies NV (AVG): A Software Company Struggling in the Land of Opportunity

Supreme storage software

The storage software segment of Symantec is a major revenue generating segment with revenue contribution of 36.6% in fiscal year 2013. Symantec has maintained its market position in the storage software industry over the last three years due to its back-up software solution, Netbackup. It provides backup to operating systems like Windows, Unix, and Linux. Symantec acquired a cloud-based email archiving company, LiveOffice, last year and Clearwell Systems two years back. This helped the company maintain its market share.

Clearwell Systems is one of the leaders in the eDiscovery market. As the amount of data surges, the biggest challenge for users is the ability to protect and store data efficiently. Here, eDiscovery is provides a software solution allowing users to store the data for future “discovery.” According to Gartner, the eDiscovery market is growing at a CAGR of 14%, and is expected to reach $1.7 billion by next year.

With the integration of Clearwell Systems and LiveOffice, the company now offers a complete email management solution. I feel providing this complete solution should help Symantec’s storage segment. With these developments, the revenue of storage software is expected to increase from $2.38 billion in 2012 to $2.52 billion in 2013.

Conclusion

Symantec’s fourth-quarter performance showed optimistic results. However, Norton antivirus is expected to grow at a slower pace due to headwinds from availability of free security software and changing consumer trends. On a positive note, the storage segment of the company is growing with eDiscovery solutions.

Considering both aspects, I would give a neutral take on the stock and wait for any substantial development.

Madhukar Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article A Software Company Struggling in the Land of Opportunity originally appeared on Fool.com and is written by Madhukar Dubey.

Madhukar is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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