Lately splitting organizations has become a trend in the tech industry. In 2014, the global media was abuzz with the reports of tech giants HP and Symantec Inc. splitting up their organizations into two independent units. The IT industry had only begun to analyze the pros and cons of the decision, that the news of Hewlett-Packard (HPQ) and eBay Inc severing their businesses added more fuel to the buzz. The organizations revealed that splitting their businesses was necessary to pace up with the rapidly changing business landscape. This is a trend that can be replicated by much success in the cyber security space as well – something that Symantec has set a precedent for.
Splitting Businesses will Help Companies Remain Agile, While Covering Greater Ground
Companies such as Symantec and HP have had to split their organizations into independent entities to ensure more effective and nimble solutions to customers. Symantec had earlier revealed that one of its two wings will focus entirely on security while the other will focus solely on back-up. The split means having dedicated teams including sales, management, and product development to take care of its both organizations.
The core tenet of corporate finance says that it is best to separate businesses that fail to perform in synergy or when the organization ceases to incur benefits from shared ownership. From the perspective of a company like HP, comprising two accomplished but distinct models of growth, separating entities inevitably makes sense. However, for Whitman and the board of directors the decision to split Hewlett-Packard was real to ease the pressure off of prioritization, thereby allowing the businesses to pursue their growth strategies independently and uninhibitedly.
Symantec Has Set a Spin-Off Example – Will the Competition Follow Suit?
To combat their constant fear of impending cyber-attacks, companies and enterprises have significantly increased their investment on cyber security infrastructure. Leading industry veterans believe that this is the perfect time for discerning investors to invest on positive cyber-security stocks and gain profit. Surging investments in the last few months have brought cyber-security to the spotlight. Market watchers say that now is a good time when legitimate fear of cyber-attacks will push the demand for cyber security stocks in the market. Spin-offs can prove to be the channel that helps cyber security firms monetizes this interest more effectively.
Symantec Corporation, which is one of the very prominent Internet security firms, has estimated that cyber-attacks on the U.S. businesses have increased by a whopping 91% in 2013. The number of breaches in the country had increased by 62% in 2013. According to a report published by the U.S. Dept. of Home Land Security, cyber-attacks on critical infrastructure across federal agencies have exhibited a 63% spike during 2013.
Hence, the cyber industry needs to expeditiously improve the expertise and services offered to counter threats as cyber-criminals continue to develop malicious codes and programs that render cyber solutions futile. Again, disintegration will lend the level of nimbleness needed for such quick moves.
With Symantec having made the first move, it will now be interesting to watch whether its competitors take a cue and follow suit, or whether they devise an entirely new counter strategy.