Partners: Broadcom-Symantec Deal Would Be 'Such A Strange Fit'

‘I had no idea a chipmaker would make a play for an internet security company,’ says a Symantec partner who didn’t wish to be identified. ‘I don't see much in the way of advantages to this. We're not in the chip distribution business.’

Partners told CRN they don't see many advantages in bringing a chipmaker like Broadcom and a cybersecurity vendor like Symantec together under one roof.

"This seems like such a strange fit for both companies really," one former Symantec partner told CRN. "I don't know where Broadcom is heading with this."

The solution provider, who didn't wish to be identified, considers Broadcom to be strongest around networking gear such as wired and wireless chipsets. That's a world apart from Symantec's strengths around security appliances and endpoints, the partner said.

[Related: Broadcom In 'Advanced Talks' To Purchase Symantec: Report]

"For a hardware company to go and buy what I mostly consider to be a software company, I don't get it," the partner said. "I don't see the relationship."

Bloomberg first reported Tuesday night that Broadcom could reach an agreement to buy Symantec within weeks, though no deal has been finalized and talks could fall through. Symantec declined to comment, while Broadcom didn’t respond to a request for comment from CRN.

Since the report surfaced, Symantec's stock has climbed $2.99 (13.53%) to $25.09 per share - the highest the company's stock has traded since May 2018 - while Broadcom's stock has dipped $11.73 (3.97%) to $283.62 per share.

A current Symantec partner, meanwhile, also feels that the technologies offered by Broadcom and Symantec are very different and don’t provide many natural adjacencies or synergies.

"I had no idea a chipmaker would make a play for an internet security company," said the current partner, who also doesn't wish to be identified. "I don't see much in the way of advantages to this. We're not in the chip distribution business."

The solution provider compared the reported acquisition to Intel's $7.7 billion purchase of top Symantec competitor McAfee in 2011. Becoming part of Intel gave McAfee a financial boost and provided the company with much-needed business process discipline, the partner said, but the deal didn't ultimately give McAfee much of an advantage when it came to innovation around its core products.

"The Intel days for McAfee were not that productive," the partner said. Intel ended up spinning off McAfee to private equity firm TPG in a 2016 sale that valued the business at $4.2 billion.

Similarly, the partner said Symantec and data management company Veritas had totally separate technologies and customer bases even though they were part of the same organization beginning in 2004. The solution provider said they never interacted with Veritas when it was part of Symantec, and didn't miss Veritas after it was sold off to The Carlyle Group in January 2016.

The former Symantec partner actually sees more adjacencies with Veritas than with Broadcom since security, backup and disaster recovery often fall under the same umbrella, with clients turning to a backup provider in the event of a security breach. Therefore, having the same company provide both anti-virus and backup could have actually simplified things for the customer, they said.

"[But] In terms of Broadcom, I only think of them as a hardware company and that's it," the solution provider said. "Mixing the hardware and the traditional software folks seems strange."

Broadcom had historically been focused on hardware, but more recently branched into software with its $18.9 billion acquisition of CA Technologies in November 2018.

Should Broadcom actually acquire Symantec, the former partner is curious what the integration process would look like. The solution provider specifically wondered if the two organizations and brands would be kept separate or fused together, and in the event of a tighter integration, if Symantec reps would be expected to know the Broadcom products in detail and vice versa.

"I'd be kind of curious to see how they'd throw it all together," the solution provider said.