New Symantec Product May Placate Critics

The Hamlet security software answers most questions about the company's acquisitions.
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IT security giant

Symantec

(SYMC) - Get Report

hopes to silence at least some of its skeptics who question the company's acquisitions and the ability to integrate them.

At Vision, Symantec's annual customer conference, which starts June 12 in Las Vegas, the company plans to debut new software, code-named Hamlet.

Hamlet will pull together technologies from some of its purchases of the last two years -- WholeSecurity and Sygate -- merging components from antivirus, antispam, firewall and compliance-related acquisitions.

The product aims to make it easier for IT managers to control different security programs by using a centralized console.

Cupertino, Calif.-based Symantec is hoping that Hamlet, with its technical innovations and pricing structure, will bolster revenue.

"It comes in a base product plus extensions that should allow us to drive a higher price point," CEO John Thompson told analysts during the company's

fourth-quarter earnings conference call.

"As customers take the base, that'll get a little bit more pricey; and as they add the extensions for network admission control and other things, that too, should drive incrementally higher prices," he said.

But selling Hamlet's value won't be easy, says Jon Oltsik, senior analyst with industry analyst firm Enterprise Strategy Group. Hamlet is targeted at small- and medium-sized businesses, many of which currently use the Symantec Antivirus Corporate Edition product.

"They have to convince everyone that there is a real difference between the products," says Oltsik. "The mind-set in the market is that antivirus is a commodity, and Symantec wouldn't want the market to perceive Hamlet as a commodity and that any old solution will do."

Shares of Symantec closed Thursday's regular session off 43 cents to $19.55. The company's stock is up nearly 18% in the three months since March 7 but down about 7.5% since the beginning of the year.

Hamlet, says Symantec, improves on existing security products for businesses on two levels: It offers better antivirus technology, and it offers IT managers a centralized console to manage all the different security programs.

Traditional antivirus products work by matching suspicious software to a database of threats or signatures, by a method known as signature-based detection. Think of it as creating an antivenin based on the original poison.

The signature-based method is largely effective, except in cases where a threat such as a virus spreads before an antivirus developer can examine the code and create a signature for it.

That's why Symantec is taking a more proactive approach known as behavioral analysis that monitors traffic patterns to detect suspicious behavior or potentially malicious programs on a device or network.

It is a more pre-emptive approach to IT security threat detection, says Brian Foster, the senior director of product management for Symantec. Hamlet will use both signature-based and behavioral analysis to be effective.

Much of the technology to enable this new threat-fighting approach has come from Symantec's acquisition of private security firm WholeSecurity in 2005. Symantec has already integrated elements of WholeSecurity's technology into consumer products such as Norton 360, and hopes to launch it to businesses this year.

Symantec has also swapped its firewall technology for that of Sygate, a private company it bought in August 2005.

"We are redefining what antivirus means to our customers," says Foster. "It is not just signature and proactive protection, but it is all integrated into the same product and therefore game-changing."

Hamlet's biggest advancement, though, would be its ability to offer a centralized management console that could effectively compete with rival

McAfee's

(MFE)

product, ePolicy Orchestrator.

But Hamlet could fall short, says Dave Robbins, CEO of BigFix, a private company that competes with Symantec.

"Hamlet tries to integrate a number of separately acquired technologies into one agent with one console, but it is not clear whether Symantec will succeed with the integration," he says. "Symantec does not have a track record of delivering successful integrations."

Hamlet could score over competitors like

Microsoft

(MSFT) - Get Report

and its enterprise security product, ForeFront, or McAfee because of its better technology and easy setup, insists Foster.

Convincing customers takes better marketing and clarity of message, says Enterprise Strategy Group's Oltsik. "Hamlet is a good product and has good functionality, but Symantec needs to convince the market that it is worth the price premium," he says.

For the company to truly have the last word, it has to articulate its grander plan and how Hamlet fits into the current security landscape.