It appears that breaking up is getting easier to do in Silicon Valley.
A report from Bloomberg says that security giant Symantec may be “exploring a breakup.” One of the Symantec companies would sell security programs, and the other would focus on data storage, Bloomberg says.
If true, it would be the third tech giant to pursue that option. Just this week, Hewlett-Packard announced it was splitting into two companies. And, of course, last week, eBay said it was planning to separate from PayPal next year.
Does three make this an official thing? Hard to say. But as Marc Andreessen tweeted about the Symantec news: “It’s as if there is some kind of trend afoot …”
In the case of Symantec, it’s been a rough couple of years at a time that should have been gonzo for a company in the business of computer security. Hacks and infiltrations are on the rise, and data thefts seem to make big headlines almost daily. And yet, over the past year, Symantec has floundered.
Revenue was down over the past year. And earlier this year, Steve Bennett, who was attempting to implement a big reorganization, was fired as chief executive officer after only two years.
Symantec has been perpetually stymied about how to handle its 2005 acquisition of Veritas Software. At $10.2 billion, it was one of the largest deals in Silicon Valley over the past decade, and yet it has failed to pay off in any meaningful way.
Like HP and eBay, undoing the deal or splitting up has long been advocated by analysts and investors. So there is some sense of giving in to the inevitable here.
But why is breaking up the new new thing?
Part of the problem is acquisitions. All three of these companies spent a bundle on big deals, touting the big opportunities. However, as it often the case, these turn out to be wishful thinking. The reality is that the big corporation becomes an unwieldy, inefficient mess to run.
Now, one can hardly stick a fork in the era of big tech companies and declare it done. After all, companies like Apple, Google, and Facebook are bigger than ever and still growing at insane paces. When they’re not gobbling down every other startup, they’re trying to hire every developer with a pulse.
And yet, it will be worth watching closely to see if other tech titans that built themselves on layer after layer of acquisitions, like Cisco Systems and Oracle, will start to consider ways to make themselves leaner.
The cautionary tale, if there is one, appears to be this: The ability to acquire and hire at lightning speed to get big can be great when the wind is at your back. Enjoy the moment. But if the world or markets or technology shift, then watch out. That size may be a weight that makes it hard to change and keep up just at the moment when you need to be faster than ever.
HP, eBay, and now, possibly, Symantec are acknowledging that. And they’re shedding pounds as quickly as possible to try to get back in the race.