Symantec Buys Spam Killer, Gets Street Cred

By Baselinemag  |  Posted 2005-03-07 Print this article Print

Symantec joined the spam-busting big leagues by acquiring Brightmail, but some wonder if the company is keeping its eye on the ball.

A year ago, Symantec was in the bush leagues of antispam vendors. The company, as part of its mail security software package, offered only a basic spam-blocking feature that guessed whether messages were spam and let companies manually maintain blacklists of keywords and the addresses of known spammers.

Symantec finally got serious about the market in May 2004, when it plunked down $370 million to buy Brightmail, whose approach to identifying spam was based on a network of 2 million "probe" mailboxes. Also last year, Symantec picked up a smaller startup, TurnTide, which developed a network device that squeezes down bandwidth from spammers' e-mail servers. View the PDF -- Turn off pop-up blockers!

For Brightmail customer Chris Zeck, manager of infrastructure engineering at Bechtel, Symantec's takeover was reassuring. "Symantec is here to stay, so we know Brightmail isn't going away," Zeck says. "Brightmail has been effective for us." He says the software has ably handled the tenfold increase in spam sent to Bechtel's 19,000 employees over the past year and a half, and that the number of legitimate e-mail messages the system inaccurately blocks as spam is "near zero."

But some worry that Symantec—which is in the middle of a planned $13.5 billion acquisition of storage software vendor Veritas—could dilute Brightmail's singular focus on spam. "I'm not sure Symantec is that pressed to compete in the antispam market," says Brandon Bianchi, network engineer at Pelco, a video-surveillance equipment company. Symantec, he notes, has released one update to Brightmail AntiSpam since acquiring the company, whereas Brightmail used to issue releases every few months.

Also "a little concerned" about Symantec's Brightmail acquisition is Leo Ghazarian, manager of information technology at footwear company Asics America. He likes the Brightmail software because it works well and requires minimal maintenance. "My worry is that the future growth path might not be as aggressive," he says.

Symantec maintains that it is constantly improving the antispam offerings. "Today Symantec is protecting about 300 million Internet mailboxes," says Enrique Salem, formerly Brightmail's CEO and now in charge of Symantec's antispam and security gateway products. "That gives us incredible visibility into the world of e-mail and electronic threats."

Antispam Systems

20330 Stevens Creek Blvd.,
Cupertino, CA 95014
(408) 517-8000


Employees: 6,000

John Thompson
Before he joined the company in 1999, he spent 28 years at IBM, where he was most recently general manager of the company's Americas sales and distribution unit.

Enrique Salem
Senior VP, Network and Security Gateway Solutions
Formerly CEO of Brightmail, an antispam software and service vendor Symantec acquired in 2004. He has also served in management roles at search site Ask Jeeves and Oblix, a security and Web services software company.

Brightmail AntiSpam server software uses multiple filtering techniques, including data from 2 million dummy mail accounts. Mail Security 8200 devices incorporate Brightmail and antivirus software. Mail Security 8100 devices throttle back mail server connections from suspected spammers.

Reference Checks

Chris Zeck
Mgr., Infrastructure Engineering
Project: San Francisco engineering and construction contractor installed Brightmail software in May 2003; of 1 million messages per day sent to its servers, 84% are blocked by Brightmail as spam.

Booz Allen Hamilton
Derrick Burton
Dir., Operations
Project: Consulting firm runs three Brightmail servers in its information-technology operations center in McLean, Va., to filter spam for 24,000 e-mail addresses.

Asics America
Leo Ghazarian
Mgr., I.T.
Project: Shoe company blocks 52,000 spam messages per month for 150 users in North America with Brightmail.

Brandon Bianchi
Network Engineer
Project: Video- surveillance equipment maker in Clovis, Calif., has 1,200 e-mail users; in six months, Brightmail stopped 15.5 million spam messages of a total of 16.7 million received.

Carl Shivers
(501) 374-4638
Project: Internet service provider in Little Rock, Ark., uses Symantec's 8100 appliance (formerly from TurnTide) plus Vircom's ModusGate to strip out spam going to 30,000 mailboxes.

St. Olaf College
Craig Rice
Associate Director, Information Systems
Project: College in Northfield, Minn., with 4,000 e-mail addresses saw 50% drop in spam after installing the 8100 in 2003.

Executives listed here are all users of Symantec's products. Their willingness to talk has been confirmed by Baseline.

Symantec Operating Results*

Gross margin82.3%82.5%82.2%
Operating income$587.44M$513.59M$341.51M
Net income$416.48M$370.62M$248.44M
Net margin22.3%19.8%17.7%
Earnings per share$0.58$1.07$0.77
R&D expenditure$241.99M$252.28M$197.27M

* Fiscal year ends March 31; FYTD reflects first nine months
Source: company reports

Other Financials**

Total assets - $5.44B
Stockholders' equity - $3.61B
Cash and equivalents‡ - $2.94B
Long-term debt - None
Shares outstanding - 742.45M
Market value, 2/28 - $15.37B
** As of Dec. 31, 2004, except as noted
‡ Includes short-term investments


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