For the time being, Network Associates will continue to sell both packaged software and Web-based services and will soon introduce a line of three virus-scanning appliances called WebShield ASaP. Due this month, the Linux-based boxes will sit at the edge of a customer's network and scan incoming and outgoing packets for viruses.
Network Associates' Network Operations Centre will monitor the appliances around the clock and alert administrators at the first sign of a virus attack.
But the real pillars holding up the company's plans are its Web-based delivery system and managed services, most of which were offered by its former subsidiary myCIO.com. And that division's Rumor peer-to-peer technology will play a key role in Network Associates' new strategy.
Devised as a way to propagate new virus definitions and policy changes more quickly to a large number of client machines, Rumor will expand in the near future to include new security functions. For example, changes to a customer's firewall policies, intrusion-detection system or other security products will be able to be easily dropped into the Rumor system and pushed out to necessary machines.
"Rumor has shown itself to be a very efficient product line, and it's incumbent upon us to figure out how to distribute software better," said Zach Nelson, chief strategy officer at Network Associates, and the former CEO of myCIO. "We firmly believe that Web-based delivery is where it's all going."
myCIO was recently absorbed back into Network Associates, the first step in fleshing out the software-as-services plan, Nelson said. "In three to five years, products and services will be indistinguishable," he said. "Our idea is to deliver a stream of bits instead of a box, but it will take some time. The world hasn't changed to that model yet."
Some customers seem to have taken to the idea, while others remain unsure about its potential uses with other applications.
"Web-based delivery has been really good for us. As far as using it for other software, we'll have to wait and see," said Lee Rockladge, network manager at DPR Construction, which uses the Rumor system. "It all depends on what the software is and whether it makes sense to do that."
The last year has been anything but enjoyable for officials at Network Associates. The company has endured a period of tremendous upheaval and uncertainty, including several shareholder lawsuits, a raft of resignations at the top of its corporate power structure and questions about its product strategy. But company executives believe the worst is now over and that the company is poised for a comeback.
But not everyone is convinced this is the right move for a company traditionally known as a maker of shrink-wrapped desktop software. Critics say the plan will take Network Associates too far afield from what made it successful in the first place.
"They're still selling a lot of product; it's not like they're doing that badly," said David Thompson, senior manager of the security practice at PricewaterhouseCoopers. "Instead of getting their base market confused, they should saddle up that anti-virus horse and ride it."
Nevertheless, Network Associates plans to move quickly on the new strategy, a reflection perhaps of new CEO George Samenuk's style. Samenuk, who took over the company in January after the resignation of former CEO William Larson, has set a frenetic pace during his first few weeks on the job. He has been traveling around the world to meet with customers and employees, absorbing criticism of the company and asking for suggestions on ways to improve operations.
He guaranteed that Network Associates will return to profitability by the next half of the year. That will likely provide a badly needed kick start to the company's stock, which has fallen more than 50 percent since Decemberââ,¬"and more than 80 percent in the last yearââ,¬"and now trades below that of its McAfee.com subsidiary.
Company officials readily acknowledged that customer support and responsiveness have suffered of late but say that's going to change. "This isn't easy. We won't see results tomorrow," Samenuk said at the time of his hiring. "This company has hit some bumps in the road. You don't have to be a rocket scientist to know that our No. 1 prior ity is rebuilding credibility."
That rebuilding process is likely to be long and arduous and won't be made easier by the fact that the company is also facing increased competition from established players such as Symantec as well as a host of well-funded startups that are targeting pieces of Network Associates' portfolio.
Companies such as Sophos in the anti-virus market and F-Secure in the anti-virus and virtual private network markets have set their sights on Network Associates, and analysts say the company needs to rebound from its doldrums quickly to hold its ground.
"They still have plenty of room to grow in their core markets, but they need to get started," said Thompson of PricewaterhouseCoopers.
