Symantec Steps Up the Service

Its latest acquisition highlights a main area of focus.
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Security software maker Symantec's (SYMC) - Get Report plan to acquire a U.K.-based services firm shows the company's heightened focus on strengthening its fast-growing professional support and services division.

The acquisition of

Company-i

, announced late Monday, will put Symantec's global services division in a better position to helpclients manage IT risk and cost, particularly in the data center, saidSymantec. The Company-i team will work with Symantec's EMEA servicesteam and focus initially on helping UK-based clients.

Terms of the acquisition weren't disclosed.

Shares of Symantec were up 17 cents to $20.58 in recent trading.

Symantec's professional services and support group earned $54.6million, or just about 5% of the company's overall $1.26 billionrevenue in its latest second quarter.

But with increasing competition from

Microsoft

(MSFT) - Get Report

on the consumer side,Symantec has been looking to build out its revenue from businesses.Symantec's consumer business represented 31% of total revenue in thesecond quarter and grew 12% year over year, compared with theenterprise business, which represented 69% of the total revenue andgrew 5% during the comparable period. But that division alone grew 14% year on year.

Services, which offer higher margins from consulting and betterrelationships with users that could eventually trickle down to theproducts business, has become an increasingly important component ofthat enterprise business market for Symantec.

To that end, the Cupertino, Calif.-based company's CEO John Thompsonrecently outlined the company's strategy: "10 by 10 by 10." Symantecwill aim to reach $10 billion in annual sales by 2010, with 10% of therevenue, or $1 billion, coming from the professional services division,according to Greg Hughes, Symantec's executive vice president forworldwide services and support.

Symantec also hopes to double employee strength in its servicesdivision, going from 1,500 or so to more than 3,000 people in the nextfour years.

It plans to meet its targets through organic growth of some 25%,with the rest coming from partnerships and acquisitions, said Hughes. Since 2004, Symantec has been making some acquisitions to thateffect. The company has bought @stake, a consulting vendor with astellar client base, and Liric Associates, another consulting firm in theU.K.

Still, security services is a tough market. Traditional services andtelecom companies are buying specialist security outfits. In August,services giant

IBM

(IBM) - Get Report

bought managed security services company

Internet Security Systems

for $1.3 billion. In October,

British Telecom

bought managed security company CounterpaneInternet Security. Symantec is also likely to bump up against

Accenture

(ACN) - Get Report

and Indian services players like

Infosys

(INFY) - Get Report

and

Wipro

(WIT) - Get Report

.

However, many of those companies still don't have the depth of domainknowledge and product expertise that Symantec's consultants possessin the security and risk-management space, said Hughes. MeanwhileSymantec is looking to partner, instead of competing with companieslike Accenture, he said.