Network Associates divides to rule products

In a surprising turnabout, security software vendor Network Associates has announced it will split into four divisions to take advantage of customer demand for individual products over enterprise solution suites.

The vendor, which has long touted itself as a provider of end-to-end solutions, will reorganise along product lines.

This is expected to boost its sales of encryption applications and technical support software by more than half, and sales from its anti-virus and network management suites by about 15 per cent.

The units are drawn from Network Associates' existing units: Magic Solutions, McAfee, PGP Security and Sniffer Technologies.

The emphasis on product lines, which has already helped the security vendor end a difficult financial year on an upbeat note, was motivated by demand, said Bill Larson, chief executive of Network Associates.

"We were chasing this enterprise suite business when the market was looking for tactical deployment of products," he said. Network Associates will announce next week that it has exceeded analysts' estimates for the fourth quarter after posting a loss of $146m (£89m) in the second quarter.

Larson said the vendor will consider initial stock offerings for each unit as a way to retain and motivate employees and boost its stock price, which has fallen 54 per cent in the last year.

"You'll see us playing up our four independent brands. This is about exposing the value of the parent company and moving it to a holding-company status in the way you might think of General Electric operating," he said.

Peter Watkins, a former vice-president of the vendor, will manage the four units, while Larson will oversee the company's push to distribute software over the internet.

Network Associates has also created a new unit, MyCIO.com, headed by former marketing executive Zack Nelson, to provide products and services for small and medium-sized businesses.

See also:

OpenPGP set to become global standard

Godfather of encryption and creator of PGP, Phil Zimmermann, has moved over to security company Hush Communications, in a bid to set a global standard for encryption in digital communication and strike a killer blow for privacy on the web.  26 Feb 2001

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