Symantec Extends Payment Terms for Select Partners

Symantec is taking the wraps off a new credit and financing plan
today that is designed to help select security and storage solution
providers keep more money in their pockets longer.

Symantec is extending payment terms to 60 days to partners with a
SMB specialization on sales of Symantec Endpoint Protection 11 and
Backup Exec, two of the company’s bestselling applications. The
extended payment terms are available through distributors Ingram Micro,
Tech Data, Synnex and Douglas Stuart. GE Capital is underwriting the
financing and Symantec is paying all of the financing charges.

“If you’re running a business on a month to month expense cash flow,
this is going to have an impact,” says Randy Cochran, the vice
president of North America channels at Symantec.

The Symantec program is different from other credit and financing
programs announced by another vendors such as Cisco Systems, Dell,
Microsoft and IBM in that it doesn’t extend credit to end users or the
partner, but rather delays the payments by solution providers on
licenses sold to customers. Extending the payment terms from the
standard 30 days to 60 days will allow solution providers to keep more
cash on hand for funding operations, Cochran says.

“Our intent is to help partners, not extend financing to customers,” Cochran says.

The financing program isn’t available to all partners. Only solution
providers certified as Symantec SMB specialists are eligible for the
extended payments. Cochran says 700 Symantec partners are currently
eligible and believes the payment program will motivate more to earn
their SMB certifications. Some solution providers may criticize
Symantec for not making the program available to all partners, Cochran
says the certification is an appropriate benchmark for ensuring
partners committed to Symantec products are receiving the incentive.

The extended terms financing program is a pilot through the end of
the year. If shown to be successful, Cochran says it will likely be
extended through 2010.

The announcement of the Symantec extended payment and financing program comes just two weeks after Symantec announced a whopping 58 percent decline in quarterly profits.
Earnings for the security and storage vendors first quarter of the
fiscal year fell from $172 million from the same period in 2008 to $73
million this year. Symantec blamed the sharp decline on the recession
forcing customers to cut back on software spending.

At the same time, rivals are claiming market and earnings gains at
Symantec expense. CommVault advanced earnings 30 percent in the recent
quarter on sales of deduplication and backup software. McAfee reported
strong revenue and earnings gains based on larger deal sizes; the
number two security software company signed 28 deals in the last
quarter worth more than $1 million.

Cochran says the timing of the payment term program following the
poor earnings report is coincidental, saying the program has been in
development for several months.