Revenue Benefits Expected By Symantec By The Acquisition Of Blue Coat

Blue Coat system. Inc. which was initially known as CacheFlow is security platform offering solutions to networking complexities. Ever since commencing business, the company has undergone several acquisitionswith Symantec Corporation being the recent one. As the house took over charge of this company, several questions eventually came up. The first being how the acquisition of Blue Coat can benefit Symantec. The answer that followed was that the security segment of the enterprise will be highly boosted by the acquisition of Blue coat system. Now you must be wondering about the core reason which makes the owner make such a stringent remark. This succeeding part of the report claims to quench all your curiosity.

Condition after selling VERITAS and heading with acquisition if Blue Coat

Soon after selling of VERITAS, the company was left with a feeble consumer and enterprise security segment. While searching a solution to for boosting its position in the world of cyber security, the group decided to acquire Blue Coat strategically. In June 2016, Symantec Corporation took over blue coat security platform.  This helped the company to continue rendering smoothly with the corporation’s consumer security platform and eventually fueled for it to strengthen its prevailing position in the cyber security sector. It is also expected by the company that with Blue coat security platform being under its umbrella, there are chances of expecting a hike in the security business revenue and share by at least 62%. This was close to the 53% incurred in fiscal year 2016.

An ethernet cable is run through a lock. This can represent internet safety, virus, firewall or network protection.

Company’s future planning

In fiscal year 2016, the company faced a loss of 7% in its enterprise security software business. Looking into depth, it is the DLP or Data Loss prevention and Endpoint protections which are recognized as the fast growing segments of Symantec’s security software business for enterprise and it is the fall noted in DLP service which highly resulted into this loss. Hence the company’s revenue declined. To meet this with a hike in revenue in fiscal year 2017, the company acquired Blue coat systems.  Also the company is planning to release an additional DLP add-ons cloud for box (BOX), or CRM and OneDrive. Presently, DLP cloud is available for Google’s Gmail and Microsoft office 365.

Expectation for cost saving and sell of shares

Symantec Corporation further expects a saving over the cost incurred in providing the security services with the acquisition of Blue Coat. The company stated that they expect to incur about $150 million over their savings with the acquisition of this security platform. This is supposed to be an addition to the expected amount of $4000 million expense savings annually that was announced by the company previously. In order to add color to their expectation of saving such an amount per year by the end of fiscal year 2018, Symantec made an announcement of their restricting plan. Under this, the company announced to cut short its workforce by 10% i.e. around 1200 positions along with the closure of some facilities offered. With all these cost effective strategies, the company now expects to enjoy $1.70 to 1.80 EPS by fiscal year 2018 while it proposes to return back the remaining $1.3 billion to be incurred on $5.5 billion capital return plan by the completion of fiscal year 2017. So now those investors who are keen to enjoy exposure to the company can now make investments in Powershares QQQETF.