Symantec 2006 Annual Report Download - page 11

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As a result of the Veritas acquisition, we have gained market share in the storage software market and are
now the leading supplier of hardware-independent storage software. The worldwide storage software market
consists of storage management, server and application management, backup and archiving, and infrastructure
software products and services. Demand in this market is driven by the ever-increasing quantity of data being
collected, the need for data to be protected, recoverable, and accessible at all times, and the need for a growing
number of critical applications to be continuously available and highly performing.
Other factors driving demand in this market include the increase in the number of Internet users and
companies conducting business online, the continuous automation of business processes, increased pressures
on companies to lower storage and server management costs while simultaneously increasing the utilization
and performance of their existing IT infrastructure, and the increasing importance of document retention and
regulatory compliance solutions.
For information regarding our revenue by segment, revenue by geographical area, and long-lived assets by
geographical area, see Note 15 of the Notes to Consolidated Financial Statements. For information regarding
the amount and percentage of our revenue contributed in each of our product categories and our financial
information, including information about geographic areas in which we operate, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations. For information regarding risks
associated with our international operations, see Item 1A, Risk Factors.
Operating Segments and Products
As of March 31, 2006, we viewed our business in six operating segments: Consumer Products, Enterprise
Security, Data Protection, Storage and Server Management, Services, and Other. The Other segment is
comprised of sunset products and products nearing the end of their life cycle and also includes all indirect
costs; general and administrative expenses; amortization of acquired product rights, other intangible assets,
and other assets; and charges, such as acquired in-process research and development, patent settlement,
amortization of deferred compensation, and restructuring, that are not charged to the other operating
segments. We report the expenses of the former Veritas sales force that cannot be allocated to a specific
operating segment in the Other segment.
Beginning in the June 2006 quarter, we will consolidate our Enterprise Security, Data Protection, and
Storage and Server Management segments into two segments Ì the Security and Data Management segment
and the Data Center Management segment.
Consumer Products
Our Consumer Products segment focuses on delivering our Internet security and problem-solving
products to individual users, home offices, and small businesses. Our Norton brand of consumer security
software solutions provides protection for Windows and Macintosh platforms as well as personal digital
assistants, or PDAs, and smartphones. Nearly 90% of our sales within the Consumer Products segment consist
of products providing protection from virus attacks.
Many of Symantec's consumer products include an ongoing commitment to provide product technology
and feature updates throughout the typical 12-month term of the subscription, to help ensure up-to-the-
minute protection against the latest threats. Most of the products that we are currently marketing or
developing feature LiveUpdate
TM
functionality, which automatically updates these products with the latest
technology, virus definitions, firewall rules, Uniform Resource Locator, or URL, databases, and uninstall
scripts.
The revenue base for our consumer products segment expanded significantly during fiscal 2003 through
2005. We believe comparable growth rates will be difficult to achieve in future periods. During fiscal 2006, the
growth rate of our consumer business slowed considerably, impacted by a changing threat environment, a
change in our revenue recognition model driven by increases in future subscription pricing for our 2006
consumer products that include content updates, and a strengthening dollar.
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