Backup Exec upgrade woes still drag Symantec down

Symantec has yet to recover from its Backup Exec upgrade issues, as the product's license revenue continues to fall.

Symantec executives said they are still struggling to repair the "self-inflicted wounds" that have caused license sales of Backup Exec to plummet. During the company's earnings call Wednesday, CEO Steve Bennett and CFO James Beer said fixing Backup Exec 2012 problems remains a high priority three months into Bennett's tenure.

Backup Exec licensing revenue dropped 9% last quarter from the same quarter in 2011. That compares to a 1% increase in Symantec's overall revenue to $1.7 billion, and a 2% increase to $595 million for its backup and storage products. The storage gains were driven by sales of NetBackup and integrated backup appliances.

The latest Backup Exec upgrade has been a headache for Symantec execs from the start. When Backup Exec 2012 was released early this year, unhappy users took to Symantec message boards and social media to slam changes in the interface and management features.

Bennett cited fixing the damage from the Backup Exec upgrade as a key challenge when he replaced CEO Enrique Salem in July. Those issues remain with the SMB application.

"We continue to work through our Backup Exec software challenges," Beer said on Symantec's earnings call Wednesday. "We are making progress, but there is more work to do.

Beer said Symantec is still restoring functionality from earlier versions, and is working closely with long-time customers on product design, as reported by SearchDataBackup.

"We have continued to work on the product, and put out multiple service packs in the last three months," Beer said. "We do believe that these are self-inflicted wounds, and we're working really hard to fix the situation."

Despite the work, Symantec is still finding customers reluctant to renew their licenses.

Bennett said he has changed the Backup Exec product team to facilitate changes. "This is unacceptable performance to me, and we're digging out of a hole. We've got some of our best talent now focused on turning this around as fast as we can."

Integrated appliances well-received

On the plus side for Symantec, its enterprise NetBackup product increased revenue year over year, driven by its delivery as part of a hardware appliance. Symantec did not give revenue figures for NetBackup or the appliance, but the latest report on backup appliances from IDC showed great momentum.

IDC has not reported on the most recent quarter yet, but said Symantec's appliance revenue in the second quarter of 2012 increased 268% year over year to $52 million. That moved Symantec from fifth to third in the backup appliance market behind EMC and IBM. Symantec's growth rate in the quarter was nine times that of the overall backup appliance industry.

"NetBackup is growing nicely across the world, and that's in part because of the growth of our appliance business," Beer said. "Our integrated backup and deduplication … is proving to be an easier-to-deploy solution with a lower total cost of ownership."

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