Symantec reassesses cloud strategy, cuts one backup service


(Otto Steininger/Otto Steininger)

Information security company Symantec is reassessing its Internet-based cloud strategy as its chief executive, Steve Bennett, narrows down its offerings.

The Mountain View, Calif.-based company is shuttering one of its cloud-based backup storage services, primarily used by small- and medium-size business customers, to invest more in its other cloud services.

The decision is an acknowledgment that even companies that moved early to Internet-based systems must constantly reassess course. Bennett, who took over about a year and a half ago after the board of directors ousted Enrique Salem, has been promoting a leaner vision for the company, which he calls “Symantec 4.0.”

“Our new offerings will be broader in scale and better integrated, targeting the highest-value­ needs of our customers and partners,” he wrote in a Symantec quarterly publication in April.

Backup Exec.cloud allowed customers to store data from personal computers or servers on the Internet, for between $38 and $45 a year. The company announced that it would stop taking new customers early next month. It is not offering a replacement service, although it will continue to support existing customers for about a year.

“We had to make some very tough decisions over the last 18 months,” said Piero DePaoli, senior director of product marketing for Symantec’s commercial segment. “As we looked at the cloud based backup business — we had the product in market for some time — we didn’t see great uptick from our customer base on it.”

More than half of users were backing up only one machine, DePaoli said, suggesting that the resources used to maintain the service might be better invested in backup services for larger businesses and e-mail systems, and in its anti-virus protection services.

Symantec introduced Backup Exec.cloud last year. Morningstar analyst Andrew Lange said he found it not surprising it was not performing well enough to maintain. It was a hybrid system, allowing businesses to store data on machines locally and in the cloud. “They really tried to make a cloud solution out of something that wasn’t cloud-based to begin with. From an architectural standpoint, they’re at a bit of a disadvantage here. The competition has built cloud backup solutions from the ground up.”

But, he noted, the attempt did not impose a huge cost on the company. “This isn’t exactly going to move the needle for a $7 billion revenue company,” Lange said.

Yet several smaller competitors — including such cloud firms as Zetta, Quorum and KeepVault — are attempting to pick up Backup Exec.cloud customers who are searching for an alternative backup system.

For instance Axcient, a cloud firm also based in Mountain View, has set up billboard advertisements along California highways reading “R.I.P. Symantec BackupExec.Cloud.” The company has created a customer service team specifically for migrating Backup Exec.cloud customers to Axcient. New customers will not be charged for the professional service or the storage during the migration period, chief executive Justin Moore said.

“Realistically, it’s between a $3,000 and $5,000 value we’re providing for free,” he said.

For the past few weeks since Symantec announced it was cutting the service, Axcient has received up to 50 inquiries a day, Moore said. Symantec “is the 800-pound gorilla that’s dominated this market for two decades.”

It is unclear whether Backup Exec.cloud’s demise will allow smaller competitors to displace Symantec, DePaoli said.

“Based on the number of customers Symantec has in this area, I don’t see this as having a drastic effect on the Symantec course of business,” he said.

Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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