Network Associates splits into four pieces

Anti virus software developer Network Associates has split itself into four independent business units.

Network Associates will act as a holding company for the units which will have their own chief executive or president.

The units are: McAfee which develops antivirus software; PGP Security which creates encryption, firewall and virtual private networking tools; Magic Solution which manufacture helpdesk software; and Sniffer Technologies which designs network management services.

Bill Larson, will remain as chairman and chief executive of Network Associates while Peter Watkins, formerly executive vice president of worldwide product development and services, is promoted to president and chief operating officer.

Larson said: "We were chasing the enterprise suite business when the market was looking for tactical deployment of products."

The changes signal a significant shift in Network Associate's strategy which had been to provide customers with suites of interlocking security software that covered firewalls, encryption, intrusion-detection and other components.

Larson pointed out that while suites are still very important the company is "HTMLising" all its product lines and exploring ways to deliver them using the Internet.

He added that the business groups will be able to foster closer relationships with customers and that the reorganisation could make it easier for the company to offer better financial benefits to help attract and retain technical personnel.

Judith Hurwitz, president of consultancy the Hurwitz Group, believes more companies may follow Network Associate's lead.

She said: "How can you, as an established company, compete with all the startups with no legacy? Existing companies with good value and name recognition can help themselves jump start more aggressively into new markets by acting like startups."

Network Associates, the result of a $1.3 billion merger between Network General and McAffee Associates, competes against rivals such as Symantec and Check Point Software Technologies.