SYMCTranscript2608

FINAL TRANSCRIPT

SYMC - Symantec at Thomas Weisel Partners 2008 Technology Telecom
Internet Conference
Event Date/Time: Feb. 06. 2008 / 11:00AM ET

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FINAL TRANSCRIPT
Feb. 06. 2008 / 11:00AM, SYMC - Symantec at Thomas Weisel Partners 2008 Technology Telecom Internet Conference

CORPORATE PARTICIPANTS
Tom Kendra
Symantec Corporation - Group President, Security and Data Management

CONFERENCE CALL PARTICIPANTS
Tim Klasell
Thomas Weisel Partners - Analyst

PRESENTATION
Tim Klasell - Thomas Weisel Partners - Analyst
First presentation of the day here in the Gold Room and we've got Tom Kendra, Group President Security and Data Management
for Symantec Corporation. The format here will be Tom's going to go over, for a few minutes, over some prepared comments,
then we'll sort of turn it over into the fireside chat that, I'm sure, you're all familiar with.

With that, Tom, if you would?

Tom Kendra - Symantec Corporation - Group President, Security and Data Management
Thank you. And good morning to all of you. I've got a few short prepared remarks and then we'll open the floor to questions.
Celeste here, Celeste, could you stand up please? Celeste is from our Investor's Relations Group and any questions that you
have or that you need more detail or color on, Celeste will be happy to provide it.

So Tim, thank you for the opportunity. Tim and I spent the last ten minutes discussing the Super Bowl so we've got that out of
the way and I want to jump right into the business here.

Going first to the financials, we'll just do a quick review of the financials from last quarter. We announced our earnings about
two weeks ago and overall non-GAAP $1.53 billion, 15% year-on-year increase, non-GAAP EPS grew 27% to $0.33 as compared
to December '06. So we are quite pleased with the December results.

You then have to get underneath that and say, quot;What are the drivers of our business now and what attributed to the success
for the December quarter?quot; And there's a couple on the execution side I'd like to bring to your attention and then talk about
some of the products that are very interesting to our customers in driving our growth.

On the execution side, our Europe, Middle East, the Africa operation, our EMEA operation continues to execute well. John
Brigden is our leader there. He's been in that job about two years. He's really bringing together a laser focus on the opportunities
in the emerging markets as well as in the northern and western Europe.

Asia Pacific Group, APJ, we changed our leaders in July when Bill Robbins, who was running that group, came back to the US.
Bernard Kwok, who ran China for us, now runs APJ.

Bill Robbins, I just mentioned his name, returned to the US. He had been running Asia Pacific for a year and came back to the
US in July. We've seen significant improvement in focus on opportunities and pulling the entire team together. So we're quite
confident we've got the right management team on the field.

Now when we look at it, the quarter was marked by a record number of large deals. We booked 554 transactions valued at more
than $300,000 in the quarter. That's a 35% increase compared to the 409 deals of the December '06 quarter; 127 of those deals
were greater than $1 million and that compares to 115 in the December '06 quarter.

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FINAL TRANSCRIPT

So what does this mean? Well, our large customers still, because they are trying to secure and manage all their sensitive and
confidential and all the data they create are turning to Symantec probably because of the breadth of our portfolio. As the notion
of IT risk management becomes more and more prevalent in our customers' environments in IT risk management, they focus
on availability, performance, security and compliance, they turn to a provider like Symantec who brings together a range of
opportunities that help them address all of those issues as opposed to addressing it silo-by-silo. They don't manage their
businesses silo-by-silo, they're looking to reduce the number of vendors and Symantec becomes a very natural and logical
choice for them. About 80% of our large transactions contain multiple products or services, again, a very strong indication of
the acceptance of our portfolio.

On the expense side James Beer, our CFO, spoke about our progress in driving cost reductions in our organization. He's estimating
$350 million for fiscal year '08 versus our original goal of about $200 million that we announced earlier in the fiscal year so again,
on the expense side, tight controls in place doing a good job.

Now let me turn to the product side, briefly, and then open it up to your questions.

Our portfolio is a diverse one. We have many award winning and market leading products. I'll hit a couple of the high points
and then when we turn to questions I'll try to answer any of the specifics you have.

The consumer side, Norton 360 has been the most successful consumer launch in our history. It quickly garnered 25% of the
new consumer sales and we're extremely pleased with that product and the progress we're making there. Good thing about
that is, Norton 360 is contained -- it has that premium price to Norton Internet Security, so it helps us with the average selling
price in our marketplace.

Backup Exec, Backup Exec is the world's leading Windows-based data and system recovery product. We posted revenue growth
of 30% compared to a year earlier and we have generated solid, sequential growth for four or five quarters in a row. So we
announced Backup Exec 11d last, the winter quarter, our third fiscal quarter, a year ago. We're about ready to announce Backup
Exec 12d in this March quarter so a lot of momentum and we're quite pleased with the success there.

NetBackup 6.5 also off to a great start since its announcement last summer. What's exciting about this product is that it won in
the September VMware show a gold award, I guess a quot;Best in Show VMworld Gold Award.quot; So that was very positive for us.
Storage and server foundation generated record results in the quarter growing at mid-teen rates year-to-year and the driver
behind our data center group, or our storage management group now given the new names, is that customers running large
data centers have increasing amounts of complexities and are looking for more and more ways to simplify the environment
coming up with standard sets of tools that allow them to manage in a heterogeneous environment is key, that standardization.
We can talk about that more if you'd like to.

Altiris, an acquisition Symantec made in April last year, did very well, $65 million of Altiris stand-alone revenue. And in the
businesses I run we launched the Symantec Endpoint Protection product 11.0 in late, late September. We shipped 23 million
seats, very strong start for our December quarter, wonderful, wonderful acceptance rate.

Enterprise Vault, our archiving product and our compliance products also grew at mid- to high-teens during the quarter on a
year-to-year basis.

Now an exciting announcement is an exciting acquisition that was completed in the December quarter was Vontu. Vontu is
the leading data loss prevention company in the world. This acquisition truly complements and strengthens our overall security
policy. Our strategy is pretty straightforward in security and the vision we've laid out for customers that security must be
policy-driven, information-centric and operationalized over a well-managed infrastructure resonates with our customers as
truly the way customers are approaching their security requirements.


FINAL TRANSCRIPT

Moving forward, we're going to continue to focus on areas of potential high revenue growth. We're going to continue to look
at ways to drive efficiencies, costs and go-to-market efficiencies in our organization and with that I'll turn it back to Tim for
opening it up to some questions. I appreciate the opportunity to be here today.

QUESTIONS AND ANSWERS
Thank you very much for coming Tom. And before I open it up to the audience, I get to ask a few of my own questions. Big
concerns within the investment community about the macro and, obviously, Symantec and yourself have got a pretty good
view of the overall, sort of, state of the IT economy out there. Are you seeing any changes, in particular US or Europe, or any
potential slow-downs or --?

We've not seen anything yet. We obviously monitor this closely and we're clearly not economists so we can't predict the future.
We believe that the diversity and strength of our portfolio as well as our geographic operations will insulate us to some degree
but it is something that we're watching closely. But at this point I have nothing new to report on it, Tim.

And if you were to see a slow-down, where would you expect to see it first in your business?

We're in three very different types of segments so I'd like to address each of those.

If you're going to see it in the large enterprise segment, you would probably see it first in large deal flows. That's the first place.
In the small- and medium-sized businesses, that type of market, you'll see it first in the flow business, the high-volume business
that is moving through your channel. So the Backup Exec product and the Endpoint Protection product might be two that you'd
see it first there.

On the consumer side because so much of our business goes through the electronic channel, you would see web traffic begin
to diminish and people coming to the website starting to fall out. So those would be the three areas that we'd be paying the
most attention to and would probably be the early indicators.

And then sort of one final one here. I know you are just wrapping up your fiscal but the -- what are you thinking about your
own spending plans for next year? Are you going to curtail them or back-end weight them to try and see how the macro works
out?

We're going to -- I have nothing new to report on that. We're going through our '09 planning now, our fiscal year starts in April.
And clearly we're going to continue to keep a close eye on the expenses. We'll see how the economic situation develops.


FINAL TRANSCRIPT

Good enough. So enough of the general macro, any questions from the audience before I dive into it? Go ahead, Brian.

Unidentified Audience Member
(Inaudible question - microphone inaccessible)

Sure. I can repeat the questions. The question is, are there any shifts in the buying patterns of large customers given that we've
talked about of increase in large deals, as have some of our competitors and other participants in the industry.

I think there's a couple of things occurring. Speaking about the business in general large companies clearly have been and are
continuing to attempt to reduce the number of providers they do business with. So those providers who can offer a broader
range of solutions for simplicity of buying programs, hopefully to gain from their customers' perspective, better discount, better
support and service, so there's some shift that's moving towards consolidating the purchase you have with a single vendor.
That's clearly one.

In our business, in particular, the emergence of this -- the notion of IT risk management looking at these problems more holistically
probably contributes to people looking at Symantec to be a provider of more products. So that's helping.

The third area is a recent trend where we've seen somewhat of a shift of some of the organizations we work with are now moving
their information security operations team into the infrastructure operations, not their CISO, Chief Information Security Officer,
but that operations team. So there might be more converged views of what products to buy for the whole range of problems.

So I think those might be three trends to pay attention to as we move forward.


EMEA -- the question was, was there a change in the large deals shipped? Our EMEA operation had a very strong year in the
large deals in year-to-year growth. I would have to look up the exact number for you.


US did well but their increase was not as great as EMEA's was. Other questions or comments?


FINAL TRANSCRIPT

I'll grab the next one, then. So last year you changed, sort of, the sales -- you had a few disruptions in North American sales. You
had some turnover here on the West Coast and in particular you also changed from a total contract value to trying to, sort of,
focus more in on the license line. As you're looking forward this year, how do you think you will be sort of structuring the sales
force? Will it be a total contract value or a new license growth and what policies did you think you misread last year?

In April of '06 we were converging two very large sales forces. And I was the responsible party at the time. I was running worldwide
sales for Symantec and we were taking two plans and bringing them together. And we believed that we had the appropriate
balance for new license as well as long-term contract sales.

In December quarter -- or December of '06, in that quarter year-ago which was a very high renewal time for the former Veritas
business, the number of contracts that came in with terms and conditions that precluded us from recognizing it as in current
period revenue was higher than we anticipated. The good news was it built the deferred revenue balance but we didn't get the
end period revenue that we wanted.

So going into this year we modified the compensation plan slightly. We educated our sales management and our teams on
what types of deals we were looking for. And it isn't that we've moved away from the view that we want long-term deep
relationships, rather we wanted to get the balance of the end period and the deferred revenue a better mix there.

Moving into our '09 year, beginning April 1, we're still looking at our compensation and coverage plans. We will continue a
focus on new license revenue as we move forward.

Can you give us an idea of what you think the average quota will be going up for yourselves?

Again, Tim, we're just in the process of going through the quotas and I don't have that information with me right now.

Okay.

I'm sure we'll get to speak about it in a couple of months from now.

Good enough. Some of the -- on the new products that -- you've mentioned Endpoint 11 and we've actually been hearing some
competitive displacements relative to some of your competitors out there. What are the features that you're the most excited
about -- your sales reps are most excited about what's the new Endpoint product.


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Symantec Endpoint Protection 11.0 was announced in late September and the feature said it provided -- solved many of the
vexing problems in an organization. So on the Endpoint what you wanted to do is you wanted to consolidate all the agents
that did virus detection, spyware detection and intrusion prevention and you wanted to be able to provide for network access
control but you didn't want all of these agents on your desktops. And you didn't want a lot of different consoles that managed
them. And you didn't want a lot of different management processes.

Symantec Endpoint Protection brings all of those agents into a single agent, single console, streamlined operational efficiencies
or, it is what you're driving here, so very powerful product that goes right into the sweet spot of what customers want to do.

Now, obviously, the product has to perform. It has to detect all the malware and our product is excellent, as you can see in the
virus bulletin analyses and other, so we have an excellent product with excellent operational characteristics.

Now in terms of us taking share or winning accounts or competitors winning from us, we will continue to be aggressive in
promoting our product and we think we're gaining share and we think we've got a winning product in the marketplace.

Very good. Audience?


The question is, the use of the Altiris console, the managed -- the Symantec Endpoint Protection. We announced integration
of Symantec Endpoint Protection or the management console to Altiris so people using the Altiris console could get a view of
their environment. We did the same with Backup Exec. So going forward we clearly want to use that Altiris capability in the
console and notification server to give customers a view into many of the products.

So Symantec Endpoint Protection was coming out in September. We acquired, if you recall, Altiris in April. We did a certain
amount of integration but there's clearly a tremendous amount more we can do for customers in bringing all of our products
together.

I'm going to throw out the obligatory virtualization question. VMware is talking a lot about getting into management, high
availability, a lot of the value proposition that Symantec has historically brought to the data center. How do you view them?
Are they friend or foe right now and where do you think that will be two years from now?

When we talk to our large customers and, clearly, virtualization and trying to drive the efficiencies in your storage and your
server environment, it's a key item on everybody's agenda. And we see the virtualization technique spreading from the test
environments into the production environment.


FINAL TRANSCRIPT

Now moving forward, we believe that there's complementary -- that our portfolio and VMware or other hypervisors are
complementary. The issue that the data centers are facing, whether you are using a VMware or a XenSource or a container or
a zone or any other tool or you're using Solaris or AIX or whatever, is you have in both the virtual and the physical world a level
of complexity that the data centers are trying to address.

The server storage backup tools that Symantec provides allows customers to standardize their tool set across all of those
environments and drive efficiency in the data center. We don't think that that goes away. So we think that the Symantec value
proposition is still going to resonate. We believe we're still going to have to support that hypervisor and others as well as other
traditional operating systems.

Very good. Getting over to some of the acquisitions you've done, you've mentioned Vontu and Altiris and they seem to be
working out quite well, and then on your, sort of, divestitures you recently sold off your APM products. So if I look at those, it
seems like you've been acquiring what I call, sort of, lower ASP, a little bit more channel-friendly-type products and maybe a
little bit less on the direct side. Is that a long-term portfolio view that you want to swing things a little bit more to the channel
or low ASP products or was it just coincidence of the timing of these?

I'd like to correct one of the views. Today Vontu would not exactly fit that description.

That's true.

So Altiris had a very strong channel presence and Vontu is on the other side. So looking at it we'll continue to make our acquisitions
based on what we perceive as emerging customer requirements and those technologies that we believe will complement our
portfolio. So I'm not trying to answer the question given that I've got two different models.

What channel are you planning on expanding the most? Would it be your direct side or your in-direct side going forward?

We've got a very robust channel today and so Vontu is sold through a direct sales force. Vontu will benefit by connection with
some of the high value Symantec partners so we're encouraged about that. Altiris had a distribution and channel strategy that
is now being complemented by being part of Symantec and having a wider distribution. So we plan to leverage the Symantec
partner programs without disturbing what was really working for those companies. So it's a case of leveraging, not thinking
about one solution fits all products, Tim.


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Great. Probably the one sort of piece of synergies between the Veritas and the Symantec that was very obvious to everybody
was the KVS and the Brightmail pieces. Archiving and e-mail security were, sort of, went hand-in-hand very well in the market.
Have you noticed or has there been any other synergies out there that you'd want to bring to light now that we're a year and
one-half, two years (inaudible)?

I sure would, absolutely. Veritas provided technology for Symantec Endpoint Protection that helps with the detection and
removal of rootkits, so they provided a very powerful piece of technology for us. We are now linking Backup Exec with Symantec
Endpoint Protection in a manner that based on threat levels we can proactively trigger the backup. So as the threat level rises,
you might want to back up your environment more often. We've done the same with our Backup Exec system recovery. So
there's a number of points of integration where we've brought the security and the storage technologies together.

Let's bring up, sort of, the one big competitor who was in the news here recently, Microsoft, who is considered the big threat
two years ago and seems to have really quieted down. Are you seeing any of them out there?

We respect all of our competitors and we always try to give the best value proposition to our customers. We've simply not seen
a lot of them.

We've actually, sort of, just from our own channel checks seen them actually be a little bit more aggressive in the reseller channel,
actually going after the small- to medium-sized business. Are you seeing any activity there?

None that I can comment on that it --

That flow into you?

From your channel checks do you have an estimate of their share?

No. Just that there have been aggressives trying to gain resellers but --


FINAL TRANSCRIPT

I can understand that.

We've got five minutes left, so if anybody's got a question, raise your hand.


EMC -- the question is EMC is a competitor, pointing out the VMware stuff which we've somewhat addressed and set aside. Our
value proposition compared to theirs is one of we don't have a hardware agenda. So both companies would go and speak to
customers about storage management tools, for example.

What our value proposition is, is the customers might have EMC, they might have Hitachi, they might have IBM, they might
have other storage products and the value proposition of working with Symantec is you have one set of storage management
tools that you can go across all of those environments and you simplify the environment and you drive the operating efficiency.

So the fact that we don't have a storage agenda differentiates us from them but they are a competitor.

Quick question on NetBackup has been -- or excuse me, Backup Exec has been sort of doing very well over the past year and
outpacing Backup Exec. What are the dynamics in that market where the smaller product is growing so much faster than what
has been a traditional foundation product for you?

Backup Exec is the leading Windows backup product and it's simple to use, it is, as I mentioned, it's Window-based, it benefits
from new business creation, it benefits from the expansion of very small businesses into medium-sized businesses and it enjoys
a very loyal channel set of partners. So I think the market dynamics are different in the sense that the new business creation
and the growth in that part of our economy is greater than the number of large corporations that are new to us.

Very good. And then on the competitive front, we had CommVault report last night, sort of mixed results on their outlook. Any
change? Are you bumping into them very often or any other competitor or the dynamics are changing at all?

We do bump into quite a few competitors and we are absolutely thrilled with the success of Backup Exec. The current version
11d I mentioned has enjoyed sequential growth for four or five quarters. We're about ready to launch 12d. We will stay with


FINAL TRANSCRIPT

the themes of simplicity and fit and finish and quality and it's a rough and tumble market out there but I think our product and
the results speak for themselves.

Very good. We've got probably time for one or two more questions. So, audience, if you want -- go ahead, Steve.


The one correction on the NetBackup I hadn't mentioned, it was mid-teens. I had said server and storage management had
been mid-teens. As far as the sustainable ones, we think we have a good pipeline. We are optimistic. There are a lot of other
variables out there so I won't be a prognosticator of what might happen in the future but I think the portfolio is strong and
we're optimistic.

We have some other sort of storage hardware guys presenting here this week, Compellent and a few others whose businesses
are growing pretty nicely but they seem to be riding the disk-to-disk backup sort of way. How does that affect your business?

In 6.5 and in Backup Exec we view that as an emerging requirement, the products support that. We believe it's a driver for us,
as well.

Are there any changes in the pricing to support that capability?

Not that I'm aware of for that reason. Celeste can check on it.

And then sort of one final one, new security threats have always been a good thing for Symantec. What are you, sort of, seeing
out there for this year where you're saying, quot;That's going to be, sort of, the hot button in security?quot;

The hot button in security right now is all around data loss prevention. Our ability to, right from the get-go, identify what is the
sensitive information in an organization, where is it, who has access to it, how long do we store it and then what do we do to
protect it? That's red hot. I think Vontu and the rest of our portfolio are playing into the hottest part of the market right now.


FINAL TRANSCRIPT

Very good. Thank you very much, Tom.

Thank you.

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