Symantec 2001 Annual Report Download - page 18

Managed Security Services provides a comprehensive array of outsourced
security management, monitoring, and response services that helps
organizations solve security problems cost effectively. Managed
Security Services allows organizations to leverage the knowledge of
Internet security experts in order to protect the value of their networked
assets and infrastructure.
Education Services provides the training, skills development, and
certifications that enable organizations to optimize the operation and
administration of their security systems. By developing and maintaining
internal staff knowledge, organizations can maximize the return on
their security investments.
Other Our Other segment is comprised of sunset products, products
nearing the end of their life cycle, and operations from our Visual Café
and ACT! divested product lines.
Recent Acquisitions and Divestitures
Acquisitions Since our initial public offering on June 23, 1989, we
have completed acquisitions of 23 businesses. Our recent acquisitions
are as follows:
•AXENT Technologies, Inc. in the December 2000 quarter;
•20/20 Software, Inc. in the March 2000 quarter;
• L-3 Network Security’s operations, also in the March 2000 quarter;
•URLabs in the September 1999 quarter;
•Quarterdeck Corporation in the March 1999 quarter;
•Intel Corporation’s anti-virus business in the September 1998
quarter;
•Binary Research Limited’s operations in the June 1998 quarter;
and
•IBM Corporation’s anti-virus business also in the June 1998
quarter.
We accounted for each of these acquisitions as a purchase and,
accordingly, we have included the operating results of these businesses
in our consolidated financial statements since their respective dates of
acquisition. We have acquired several businesses in the past, including
Peter Norton Computing, Inc. on August 31, 1990. We continue to use
the Norton brand name for products subsequently developed and
marketed by us.
Divestitures We divested the Visual Café and substantially all of the
ACT! product lines on December 31, 1999, and have included the
results prior to disposition in our Other operating segment. These
divestitures enabled us to focus our efforts and resources on our
Internet security business. These products comprised a significant part
of our business prior to their disposition.
Sales and Marketing, International Sales and Customer Support
We market our products worldwide utilizing a multi-channel strategy
of direct and indirect sales through independent software distributors,
major retail chains, resellers, and value-added resellers focusing on
security solutions and system integrators.
Sales and Marketing We sell our products to individuals and enterprise
users primarily through distributors and resellers. Our products are
available to customers through channels that include: distributors,
retail, mail order, corporate resellers, Internet-based resellers or
“e-tailers,”value added resellers, original equipment manufacturers,
educational institutions and Internet service providers (“ISP”s). We
also sell some of our products and product upgrades through direct
mail and over the Internet. We sell corporate site licenses through
our distribution, corporate reseller, value-added resellers and system
integrator channels, in addition to our direct sales force.
We maintain distribution relationships with major independent
distributors. These distributors stock our packaged products for
redistribution to independent dealers, consultants and other resellers.
We also maintain relationships with major retailers, while marketing
directly to these retailers through independent distributors and coop-
erative marketing arrangements. Our indirect sales force works closely
with our major distributor and reseller accounts to manage the flow of
orders, inventory levels and sell-through to customers. We also work
closely with them to manage promotions and other marketing activities.
Our agreements with distributors are generally nonexclusive and may
be terminated by either party without cause. These distributors are not
within our control and are not obligated to purchase products from us.
These distributors also represent other vendors’product lines.
Our marketing activities include:
•advertising in trade, technical and business publications;
•on-line advertising;
•radio broadcast advertising;
•public relations;
•cooperative marketing with distributors, resellers and dealers;
•direct mailings to existing and prospective end-users; and
•participation in trade and computer shows.
We typically offer two types of rebate programs within the United
States: volume incentive rebates and rebates to end-users.Volume
incentive rebates are made available to our distributors and resellers.
The distributor or reseller earns a rebate based upon the volume of
their purchases and their sale of products to end-users. Volume
incentive rebates are accrued as an offset to revenue when revenue
is recorded. From time to time, we also make rebates available to
individual end-users or consumers of various products acquired
through major retailers. End-user rebates are accrued as an offset to
revenue when revenue is recorded.
Product returns occur when we introduce upgrades and new versions
of products or when distributors or retailers have excess inventories,
subject to various contractual limitations. Our return policy allows
distributors, subject to these contractual limitations, to return pur-
chased products in exchange for new products or for credit towards
future purchases. End users may return our products through dealers
and distributors for a full refund within a reasonably short period
from the date of purchase.We estimate and maintain reserves for such
product returns.
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