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Disintegration Can Help IT Service Companies Adapt to Changing Market Dynamics

Jul 17, 2015 | Chemicals & Materials | Christina Johnsan

Symantec’s decision to split into two organisations has caused much furore in the IT security solutions market, with other leading players wondering if it indeed is the way forward to stay competitive. Symantec, which assessed its business strategy 18 months ago, is following the footsteps of eBay and Hewlett-Packard, who last year made similar moves to effectively manage their wide range of businesses.

Symantec has dominated the IT security landscape, but competition from new players, such as Palo Alto Networks and FireEye has forced the company to rethink its business strategy. By splitting the company into two parts—one focused on security and another solely on backup—Symantec aims to be more nimble in addressing the evolving needs of consumers.

The IT security industry has seen a plethora of changes in the last decade or so. Proliferation of internet, pervasiveness of smartphones, emergence of cloud and internet of things (IoT) have led to a paradigm shift in consumer behaviour and their needs.

Considering the changing landscape in the IT security market, disintegration can be the way forward for leading players. By splitting up their businesses, leading players can focus on core areas of security more effectively. It can also help them stave off competition from emerging players, who are luring the clients with competitive pricing.

Disintegration can also help IT security service providers to adopt a more proactive approach in dealing with the needs of their clients. By working closely with their clients, security service provides can get a firsthand experience of the challenges their clients face on a day-to-day basis. This information can then be utilised to create technology that actually serves their specific needs.

Leaner Structure Can Help IT Security Companies Combat Cyber Threats More Effectively

Cyber threats are becoming increasingly sophisticated by the day, and the leading players have often been found falling behind in the race to combat them. By having separate, dedicated teams to work on cybersecurity, IT security companies can focus their attention on dealing with cyber-attacks in a more efficient manner.

Breaking up can also help IT security service providers make their companies more appealing to investors. Today, both private investors and venture capitalists are looking at companies that have the potential to provide high returns. This is one of the prime reasons why start-ups are receiving so much of support from investors. On the other hand, behemoth organisations are losing the sheen among investors, owing to their moderate growth rates.

Breaking up can help make organisations appear leaner and target-oriented—signs that both existing and potential investors look for in a company. It can also help a company to detach from a slower-growing business, so that the other business can rapidly achieve growth.