Hot on the heels of the news that Hewlett-Packard is planning on splitting up into two companies, rumors suggest that both Symantec and EMC are planning on following suit.
The rumors of the Symantec split suggest one company would focus on security software and the other would be geared toward data storage.
Best known for its Norton antivirus software, Symantec has undergone a number of changes over the past few months. In March the company announced that it was getting rid of its then-CEO Steve Bennett. He was the second CEO to be fired in only two years after Enrique Salem was fired in June 2012.
It is likely that Symantec is looking at splitting to be more attractive as acquisition targets. The rumors surrounding the split suggest that one company, Symantec, would remain as a security software company, and Veritas, which the company acquired in 2004, would be spun off as a data storage company.
EMC is also rumored to be spinning off its data storage company, VMWare, into a separate company, although nothing has been confirmed yet. Even eBay is planning on separating itself from PayPal, which it acquired back in 2002. PayPal wwill become a completely separate and independently traded company.
HP also announced that it would split into two companies, with Hewlett-Packard Enterprise focusing on cloud computing and other business tools and the other company, HP Inc., focusing on personal computers and printers.
Symantec as a company has been going downhill over the past decade. At the time of its Veritas acquisition the company was trading at around $28 per share and had just challenged $30. In a matter of two years the company's stock had risen from $5 to almost $30. Nowadays, shares of the company are between $20 and $25.
It seems as though splitting up into smaller companies is becoming the new thing for large tech companies in the Silicon Valley. Many of the companies that announced splitting up have been making big acquisitions with the idea of making a lot of money off them. This turned out to be wishful thinking, costing the companies much more than they are making. Not only that, but the large corporations end up being a nightmare to run.
It would be wrong, however to assume that megacompanies such as Google and Facebook are going to start splitting up in the near future. While they have been acquiring a lot of smaller companies and hiring developers by the hundreds, they also have the money to back it.
Companies such as Oracle and Cisco, however, who have been building up massive portfolios of acquisitions over the years, may soon start finding ways to be a little leaner.
