Dell and Symantec Team Up - Analyst Blog

Round Rock, Texas-based PC maker Dell Inc. (DELL) announced that it is expanding its strategic ties with leading security solutions provider Symantec Corp. (SYMC). Under the terms of the partnership, Dell will deploy Symantec's e-mail security solution into its Services business.

Symantec's solution will secure Dell's E-mail Management Services (EMS) through its cloud-based hosted services. These services will enhance e-mail security features and improve EMS efficiency.

The enhanced e-mail features to be offered by Dell will include Anti-Virus and Anti-Spam Capabilities, as well as Image and Content Control and Boundary Encryption. Through these features, Dell expects to offer customers and channel partners continuous network protection along with confidentiality and integrity of e-mail communications.

Dell's EMS line is an important component of its Software as a Service (SaaS) portfolio, which is generally used by organizations to simplify their IT environments, as they increasingly transfer their operations to the cloud. They also help companies reduce costs. Symantec's e-mail security solutions will enrich Dell's overall SaaS portfolio.

We think that the combined effort will not only maximize existing customers' benefits, but also force new customers to deploy Dell's SaaS solutions to take full advantage of cloud-based services.

Apart from this, we are encouraged by Dell's attempt to shift its focus from PC and server roots to become a data-center vendor with a broad scope. Moreover, Dell's recent endeavor to expand in China is also encouraging. However, soft demand in the Consumer segment, a high debt level and stiff competition in the computing and emerging cloud computing space are concerns.

We are also encouraged by Symantec's second quarter results, its comprehensive product portfolio, growth prospects in all its served markets, acquisitions, customer win momentum and strong cash generation ability. However, intense competition from the IT security field will remain a concern for Symantec.

Currently, both Dell and Symantec have short-term Hold recommendations, as is indicated by their Zacks #3 Rank.

 
DELL INC (DELL): Free Stock Analysis Report
 
SYMANTEC CORP (SYMC): Free Stock Analysis Report
 
Zacks Investment Research