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When most people hire a security guard, they don't expect him to be a computer programmer and a secretary as well. But that, or its electronic equivalent, is the range of services Symantec provided at the end of the millennium. The Cupertino, Calif., firm was best known for its Norton AntiVirus software for consumers and small businesses. But during the dotcom boom, it was also hawking software for creating Java applications and managing business and personal contacts. Confused investors and big corporate clients gave Symantec a wide berth.
Enter John Thompson, an IBM veteran of 28 years, who became Symantec CEO in 1999, the first African American to head a major U.S. software company. Thompson sold off the extraneous software divisions and replaced his entire sales team and nearly all his vice presidents. (Thompson's favorite movie: The Godfather.) Then he started buying stuff--like ON Technology, a $100 million infrastructure-management company--and he massively expanded the Live Update service, which for an annual subscription automatically downloads the latest antivirus software to your computer. "Security is a process, not a product," he says. Thompson, an avid amateur chef, is constantly tweaking Symantec's recipe.
As the corporate world faced a plague of computer viruses, Symantec thrived. The Love Bug and Sobig spread faster than any other viruses in computer history, becoming household names. Since then, virus writers have become terrifyingly shrewd. One report put the cost of bugs to global business last year at $55 billion. Symantec's sales rose, from $634 million when Thompson took over, to $1.9 billion in fiscal 2004, and more than half the firm's revenue comes from corporate sales. The company's stock has also soared more than 470% since Thompson took control. "Never in my wildest dreams could I have forecast what unfolded," he says, "but we were well positioned for it." Thompson wasn't adverse to cashing in; he made $14 million selling his options in May. Now, Symantec is buying Brightmail, an e-mail security firm. Purveyors of spam are even more cunning than virus writers, and Brightmail sends updated antispam defenses to its client computers at least once an hour. "It's a very natural marriage," Thompson says. Sifting your mail for unwanted stuff while protecting your front door--now that's something you would expect from a security guard. --By Chris Taylor/San Francisco
THE REBEL WITH FREE CALLS SKYPE | LUXEMBOURG
Watching Niklas Zennstrom's young company, Skype, grow is like driving past a McDonald's back in the '70s--every time you look, another million have been served. Skype's appeal is even more obvious than a Big Mac's: the firm provides software that lets people make free phone calls over the Internet. Since Skype was launched a year ago, the company has recorded almost 18 million downloads; it says more than 8 million people use the product. "We don't think you should pay for making phone calls anymore," says Zennstrom, a softspoken Swede. What's remarkable is that until recently, he hasn't charged customers for using Skype either.