Greg Butterfield - Symantec - Group President - Altiris Business Unit

Good morning, it's good to be here. It's been a great week here at Vision to participate in all the activities and events to meet with the customers. It's great to be part of Symantec.

Today there are three things that I'd like to accomplish during my presentation. First of all I would like to go over the objectives for FY '08.

Since Altiris is a new business unit inside Symantec, I thought it would be helpful to give you a high level overview of who we are as a company and what's the value proposition we provide to our customers.

I want to take a moment a talk about some of the synergies and some of the excitement that our customers and partners are experiencing as a result of this transaction, as well as our employees. You know over the past six months I've met with over 1,000 customers personally.

And so I want to share with you some of the excitement that they've experienced relative to this transaction and why they believe that this makes huge success and makes sense for all customers. And then I'm going to share with you just a few of the growth drivers that we've been able to identify in the first 60 days being part of Symantec.

So before I talk about the business in general, let me just first of all say that business unit's number initiative for FY '08 is to meet our financial objectives, both revenue as well as profitability. How are we going to do that?

Well we're going to stay focused on the things, the goals, the objectives that we established as a stand alone company before the acquisition. You know this transaction has been basically seamless for many of our employees.

You know credit to John and his team, I've done nine acquisitions in the last three years, I've been acquired multiple times in my life, this has been by far the best transaction that I've ever been involved with, including those that we've done our self.

So for most of the employees the goal for me is to make sure that they're staying focused on the things that they were already doing.

So developers still have the same deadlines, they're working on the same code, our field marketing people have the same campaigns, the same events, our customer support people, the Global Services people are still talking with the exact same customers, still the same exact phone lines, phone numbers.

And most importantly, our sales reps are still part of this business unit, they're calling on the same customers and they have exact same quotas they had prior to the transaction.

So focus on the things that are currently being done and the goals and objectives that we had as a stand alone company. As we get to know each other better we'll drill down on some of those objectives at a later date.

The second most important thing is for executive staff, myself and my team, to make sure that we're maximizing the global resources and the strengths of the greater Symantec. And as we get into growth drivers we're going to talk about some of those things that are very obvious.

And then the third thing where I view that there's a huge opportunity in '07, end of '07, moving into '08 and beyond, is the energy associated with the Vista migration.

Analysts have forecasted that 10% of all commercial desktops will be converted in the 2007 time frame, and so we view there is a huge opportunity associated with this, there's billions of dollars that are going to be spent.

And so we're going to talk about how Symantec is going to be the best company to manage the transitions, not only once they do the migration, but manage the Vista platform going forward and making Windows a better managed operating platform and a more secure operating platform. So those are three or four main objectives we have for FY '08.

Let me now transition and share with you the overall value proposition provided by Altiris. Did you know that 80% of IT person's budget is spent and focused on just doing routine maintenance functions, basically keeping the lights on or keeping the system status quo.

Well that's the business that were in is helping customers reduce the overall cost and complexity of managing IT.

Now being part of Symantec we have the ability not only to cut the costs and complexity of managing the information technology, endpoint and devices, but we also now have the ability to secure that technology. So regardless of customer size, we help reduce risk and we help enhance IT performance.

How do we do it? Well we've gone out over the past eight years and we've identified many things that IT organizations are doing on a manual basis and we've taken those things and we've created what's known as an IT Lifecycle Management Suite.

So we've taken the manual things that are being done from cradle to grave and we've automated the process through web services and products that solve business problems.

Now today we do not have time to go through all of the different products that are available from this business unit.

We have over 40 different point solutions, we have five major suites, but let me just identify a few of the solutions that we provide to help reduce business costs and complexity of managing technology.

The first thing you'll notice on lifecycle wheel is Asset Identification. Three weeks ago we had a Fortune 500 event. We had 20 plus CIOs in a room. A question was asked, how many of you know how many servers you have in your organization.

Guess how many people raised their hand? Three. Three out of 20 said they new how many servers they had in their organization.

At the keynote presentation on Tuesday, Mike Mussard from one of the major editors for the trade rags listed ten top oxymorons in IT. The first one he listed is that we're in charge of managing IT but we don't know what we have in our own organizations.

How can you manage it if you don't know what you have? So this business unit, right out of the gate, has discovery technology that allows people first of all to identify all their assets, allowing them to then be able to go out and manage the devices.

A quick business case with regards to software identification is the annual maintenance fee that you provide to your large software manufacturer.

We have had many customers that just implementing that one component from this business unit were able to more than recapture the cost for the product that they actually paid for.

If I'm in the process of doing a large software maintenance contract with my software provider and I don't how many licenses I have, then there's the risk of me paying too much.

So asset identification, deployment configuration, deployment configuration, there's a huge PC refresh. You've got Vista migration.

Today it takes the average IT person approximately two hours at a minimum, two hours to deploy and configure and set up a new device with the Symantec Altiris Business Unit technology you can actually do that in less than 15 minutes.

And the exciting part about this is not only can you do a machine, the time that it takes to do a machine you can do ten machines or hundreds of machines or even thousands of machines. So hopefully that gives you a feel for the value proposition.

Once again there are 40 different products. We don't have time to talk about all of them today.

A key thing here is not just the technology, but the fact that all of these technologies are running on a common configuration management database. So one thing that we do is we help to eliminate manual procedures.

The second thing that we do is we provide technology and this technology is built around business process and this technology is all integrated. Part of the reason IT departments are spending 80% isn't because they haven't gone out and purchased software, they have purchased tools.

The problem with the tools is they're not integrated on a common architecture. You don't get the benefit of Asset Identification with regards to service delivery. All of these technologies are web services running on a common UI and a common data model.

Now in your supplemental information I've given you a couple of customer success stories. Just to give you once again the cost savings, Cargill, a $60 billion company, 40,000 endpoint devices was struggling with the cost and complexity of managing over 40,000 endpoint devices.

By implementing our Asset Identification, our software distribution and our Patch Management technology, were able to realize a $4 million savings in the first year. So hopefully that gives you a feel for the value proposition that we provide.

Once again, everything is running on a common architecture, you don't have a centralized management store, a source of truth.

If you don't know where your assets are, where they're physically located, which people are using those assets and how those assets are tied to other IT assets, then how can you calculate your service level agreements and help determine the overall cost that you're spending on your systems.

So a key to our strategy is a common architecture, one web console. Customers have the ability to buy whatever solution they'd like, they all snap into the same back end architecture.

If you plug in a new model it's discoverable on the web console. Policy Management, Business Process Management, all of those things are done with a common, back end architecture.

We support multiple operating systems, Linux, Unix, five flavors of Unix, Palm, Rim, Mac, Windows, CE and we are hardware agnostic.

Once again we have five major suites because this is a platform. We have a developer kit.

Last year we exposed this developer kit to end user customers as well as other software developers, today we have over 200 developers that are building additional services to sit on top of this platform.

Now the benefit inside the greater Symantec is the fact that we now have the ability to take other Symantec technologies and build in those technologies on top of this architecture.

One of the reasons why I believe that Symantec struggled relative to integrating other technologies that were purchased from ON Technology or PowerQuest or some of the Ghost technologies, was because you had individual products with unique consoles.

Already we're going to show you today as far as growth drivers how we're starting to snap some of those technologies in, once again not just providing solutions but providing complete automation site to a workflow. We also have connectors to third party companies.

This is a $19 billion problem. We do not think that Symantec can solve all problems, once again we have an open standard that's extensible that's modular, so that we can integrate and go to a customer, extend, enhance and add value to their existing systems. So, very scalable architecture.

80% of our revenue goes through a leveraged model. The four largest hardware manufacturers have selected some components of Altiris technology to do the management of their hardware.

Once again, if 80% of the cost of your IT is tied to the management of the IT, not the price you paid for the product itself, that then becomes the biggest inhibitor for a hardware manufacturer to sell a new device. The migration, the deployment and the configuration, Dell, Handpiece, Fujitsu, IBM have all selected Altiris as their management partner.

In fact, last year Dell, as they decided to roll out a software management strategy on open platforms, actually decided to use the Altiris architecture as their new unified management architecture.

So now when third-party companies want to provide software solutions on the Dell hardware system, if they want to have other hardware companies take advantage of their instrumentation, the software developer kit that they're giving to third party companies that they're going to integrate on is the same software developer kit that Altiris Business unit and Symantec are actually using.

Intel, they have a new technology, Centrino Pro, vPro, it's the ability to provide out-of-bands management and security below the operating system. They have partnered with Symantec and the Altiris Business Unit, Altiris prior to the acquisition.

So, a great relationship with Intel. And Microsoft, Microsoft's core value proposition is they're an operating system. We help make Windows a better managed platform and we have connectors into Microsoft.

So why are customers so excited about this overall integration? We believe that they're trying to have fewer backend architectures, fewer agents sitting on the box.

As we combine Operations Management with Security Management, we believe we provide a more holistic approach to helping them reduce risk and cut costs, Symantec's core competency, data protection, backup recovery, clustering, of course the number security company as well as compliance and government.

And then you take the Altiris technology from an operations perspective, we believe that we're literally years ahead of the competition relative to providing what customers want, which is the integration of operations and security management.

Okay growth drivers. Let's look at sales and marketing first, the first one is Vista. I indicated earlier that 10% of all customers it's been predicted will upgrade, that's 30 million devices. Symantec is the leader in Vista migration, Microsoft will tell you that, you get the Microsoft website.

We are clearly the leader in helping people migrate. The reason for that is we're the only company that covers all six steps necessary to do a successful migration from discovery to doing a backup to create a safety net.

To packaging the images together to create a virtual environment, to move the data and the settings and actually do a deployment and then to provide a complete closed loop where you go back and you do an audit and you check and you make sure that you had a successful deployment.

So what's the value to the shareholder? The fact that, when we look from a historical standpoint, when Altiris was the leading provider for XP migration, customers did not only buy the XP migration toolkit.

72% actually ended up buying more products from this business unit. Other growth areas, channel, you know we've been part of Symantec now 60, 70 days, Altiris has 2,000 partners, 2,000 value-added resellers, Symantec has 60,000.

We're now in the processing of aligning and mapping and making sure that we're expanding the channel opportunity for this business unit, making sure that we're not going to hurt our existing partners.

We're going to take advantage of the Software-as-a-Service. We've talked about online backup and we've talked about remote control.

Many of the services that we provide from an operations management perspective, we believe, can be put up and over the wire and provided in a Software-as-a-Service or a managed service provider format. Symantec has clearly got the strength with the service delivery framework.

We're going to take advantage of that. Geographic expansion, we had 1,037 employees when we were acquired, we had 32% of our business go outside of North America. Symantec had 51% of their revenue last year that was outside of North America.

We have already given our limited presence and coverage in Asia-Pacific, taken our sales and marketing people and put them under the Symantec sales team. So once again, geographic expansion we view as a good growth driver.

Altiris has 20,000 unique customers from the largest of customers all the way down to small organizations.

And one of the things that's unique about our products is they're easier to install, they're less expensive, we provide systems management to the masses where the incumbents have only been able to provide to the largest of Global 2000 customers.

Symantec has over 1,00 named accounts, we are already enabling the Symantec sales force to go out to these customers that have master license agreements and they're putting as addendums the management technology on top of these agreements that are in place. Sales reps we've already worked out the compensation, they're being compensated for selling this business unit's products.

Market segmentation, 4.5%, 5% of our business last year went into the Fed and Sled space, State and local and education market, 15% of Symantec's revenue goes into that space.

And so we're taking advantage of the IDIQ or Indefinite Quantity Indefinite Delivery contracts that have already been signed by Symantec, great opportunities from a vertical market perspective.

Now the thing that we're most excited about in this business unit is what's happening with the overall security movement.

And Tom Kendra told you about what he's done relative to taking multiple security disciplines and putting them all in a common agent and a common architecture.

Well now the strength of Altiris being part of Symantec in this business unit is the fact that we're clearly a leader in discovery, deployment and migration of operating systems. We also do that for other technologies.

Well simultaneous to Hamlet shipping, we will have already released a connector that provides the ability for us to synchronize the database between Hamlet and the Altiris architecture, so we will help cut the costs and complexity of migrating to September and all the Symantec customers will get that base [audit], that connector for free.

From a shareholder perspective, the value that that's going to provide to this business unit, is the ability to now take and as an up sell, provide Patch Management as a better strategy and the best strategy selling them Client Management Suite or Total Management Suite.

So once again we're really excited about what Symantec's done with regard to consolidating the back end architecture and the number of agents, and providing a common view into the technology.

We've been going down this same path at Altiris, it's a great marriage and we're really excited about what we're able to do relative to providing Endpoint Security and the merger of Endpoint Security and Endpoint Management.

Here's an actual slide [deck], we don't have time to go through it, actually showing the product up and working. Data Protection, Backup Exec, we've talked about the new release there.

Once again we believe that is a service to the part of the overall lifecycle. We have already integrated and within the next couple months we will actually be able to sell, as an additional web service inside this architecture, the ability to backup.

Before you do a Vista migration what do you want to do? You want to take a backup to make sure that in the event that the new operating platform doesn't work in your production environment, that you have the ability to have a safety net and roll back. We're going to be able to demonstrate that by the October time frame.

Virtualization, there's all kinds of virtualization technology inside the Symantec. We're now in the process of pulling this all together with a cohesive story in positioning. Altiris has clear leadership relative to applications on-demand, application security. People have done operating systems migrations.

We have now a complex environment where you have physical and virtual devices. We're in a leadership position to provide the management of those different components. Ghost, pcAnywhere, LiveState Delivery and as Tom talked about, CCS and the ESM technology.

One of the key challenges that customers are having is not only identifying when you're out of compliance, but remediating it. Altiris will now be the remediation arm for the greater Symantec and we see opportunities there.

So, up selling to those customers, up selling LiveState customers, LiveState Delivery to the greater Client Management Suite and Total Management Suite from this business unit.

So in summary, the most secure endpoint is a well managed endpoint, you can't secure it if you can't manage it.

This business unit will expose multiple other ways to provide protection for the greater Endpoint Security value. We believe there is huge opportunity for this business unit to take advantage of the Global [detraction] resources in the greater Symantec.

We believe there is a huge opportunity with the billions of dollars that are going to be spent in the free energy associated with the Vista migration. And we believe that the CMDB, this web services architecture, will allow us to quickly integrate the other Symantec technologies into this architecture.

So we're really excited to be part of Symantec, thank you for your time and we'll look forward to Q&A in a little while. And now it's my privilege to introduce Symantec's very own blue man, Group President of Sales and Marketing, Enrique. Thank you.