Symantec Needs $1 Billion in Annual M&A to Bolster SaaS Security Exposure

| About: Symantec Corporation (SYMC)

Symantec Chief Operating Officer Enrique Salem says the company is planning roughly $1 billion in annual acquistions over the next few years.

The strategy will involve three to six acquisitions annually, Salem told me during a luncheon with reporters at the Symantec Partner Engage event.

Admittedly, Symantec stumbled quite a bit with the 2005 buyout of Veritas. But I think Symantec-- and many big software companies loaded with cash -- should go on a buying binge during the current economic turmoil.

Consider the facts:

  • Valuations for software companies are down
  • Start-up software companies face tight lending policies and can't launch initial public offerings
  • Symantec ranks among the four largest software companies in the world

Still, Symantec has some challenges. The company has been hit-and-miss in the software as a service (SaaS) market. Symantec's big SaaS play -- known as the Symantec Protection Network -- was somewhat late to market, and got off to a slow start.

Just last week, Symantec moved to acquire MessageLabs to strengthen the company's SaaS security play. And on Oct. 16, Symantec announced a partner program for the Symantec Protection Network initiative.

Solid progress, to be sure. But Symantec needs to bolster its SaaS play -- and fast. Spending $1 billion a year on three to six companies annually could help. However, the 2005 Symantec-Veritas deal shows that the company will need to more closely manage their acquisition efforts.

Disclosure: None