Symantec 2006 Annual Report Download - page 45

The increase in Consumer Products revenues in fiscal 2006 was due primarily to an increase of
$156 million in revenue from our Norton Internet Security products as compared to fiscal 2005. The majority
of the increase in revenue was booked through our electronic distribution channel that includes original
equipment manufacturer, or OEM, subscriptions, upgrades, online sales, and renewals. This increase was
partially offset by the change in our consumer product revenue recognition model for our 2006 consumer
products that include content updates. Beginning in the December 2005 quarter, as a result of increases in
future subscription pricing for our 2006 consumer products that include content updates, revenue for these
products is recognized ratably over the term of the subscription upon sell through to end users. This change in
our product revenue recognition model resulted in a 7% reduction in Consumer Products revenues for fiscal
2006. In addition, revenue from our Norton AntiVirus products decreased $67 million as our customers
continue to migrate to the Norton Internet Security products, which offer broader protection to address the
rapidly changing threat environment. Revenue from our electronic distribution channel (which includes sales
of our Norton Internet Security products and our Norton AntiVirus products) grew by $168 million in fiscal
2006 as compared to fiscal 2005. We believe that, in addition to the factors noted above, the lower growth rate
in our Consumer Products segment was attributable to a changing threat environment and a strengthening
U.S. dollar. In addition, during fiscal 2006, pricing for subscriptions increased, while pricing in retail and
online stores remained consistent or decreased.
We believe that a significant portion of the increase in Consumer Products revenues in fiscal 2005, as
compared to fiscal 2004, was attributable to the continued increase in vulnerabilities, Internet attacks, and
malicious code activity coupled with a growing level of awareness of these threats around the world.
Specifically, the increase in our Consumer Products revenues in fiscal 2005 was due primarily to an increase of
$231 million in revenue from our Norton Internet Security products and an increase of $185 million in revenue
from our Norton AntiVirus products. Revenue from our electronic distribution channel grew by $297 million
in fiscal 2005 as compared to fiscal 2004.
Enterprise Security segment
Year Ended March 31,
2006 2005 2004
($ in thousands)
Enterprise Security revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,080,431 $958,627 $763,862
Percentage of total net revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26% 37% 41%
Period over period increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 121,804 194,765
13% 25%
The increase in our Enterprise Security revenue in fiscal 2006 was due to increased growth from our anti-
spam products and lower but continued growth from our Enterprise AntiVirus products. Specifically, the
increase in our Enterprise Security revenue was due primarily to an increase of $57 million in revenue from
our Enterprise AntiVirus products, and an increase of $55 million in revenue from our antispam products
during fiscal 2006 as compared to fiscal 2005.
Revenue from our Enterprise Security segment increased in fiscal 2005 as compared to fiscal 2004 due
primarily to an increase of $148 million in revenue from our Enterprise AntiVirus products. In addition,
revenue increased due to sales of antispam products formerly associated with Brightmail, which we acquired in
June 2004.
Data Protection segment
The Data Protection segment is comprised of products acquired through the Veritas acquisition. Fiscal
2006 revenue from this segment of $744 million was comprised primarily of revenue related to Backup Exec
products and NetBackup products of $336 million and $333 million, respectively. The remaining revenue was
comprised of revenue related to Enterprise Vault products.
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