RSA: NAI to break into smaller units

Network Associates (NAI) at the RSA Conference in San Jose, California next week will announce plans to splinter off some of its security divisions, including McAfee Virus Defense, Sniffer Technologies, PGP Security, and Magic Solutions, into independent business units, each equipped with its own president.

NAI will still retain full ownership of the units, said an NAI representative.

According to the representative, the company shakeup was designed to create four separate sales forces to sell directly to each of its customer segments, formulising a practice that has essentially been happening over the last quarter.

"Basically this is what our customers wanted," the representative said. "In order to compete with all the dot-coms out there, we wanted to make sure we had smaller focus. (To be successful) you have to be nimble and strong."

She admitted that NAI officials felt they had to shift their current focus away from concentrating on the brick-and-mortar enterprise market to keep in line with the industry's hottest trend: the emerging business-to-business market.

"Network Associates decided to change with the (evolving) market," the representative said.

Under the new plan, the McAfee Virus Defense, Sniffer Technologies, PGP Security, and Magic Solutions groups will concentrate and develop products for the anti-virus, protocol analyser, security, and help desk markets respectively.

Peter Watkins, president and chief operating officer of NAI, will oversee the operation of the new business units and report to Bill Larson, chief executive officer and chairman of NAI. The presidents of the new units include: Mike Wallach, PGP Security; Gene Hodges, McAfee; Les Vaughn, Magic Solutions; and Paul Farr, Sniffer Technologies.

At the moment, there are no plans to launch stock for each new business unit. However, the representative said that could change in the future.

The representative said that NAI is considering modeling each new business unit after a start-up with regard to employee bonus performance by dispensing either phantom stock or NAI stock, depending on sales levels reached.

NAI also will launch a new Web site,, at the end of the month. The Web site is expected to provide the product lines as a service available to customers over the Internet in the form of an application service provider model. Zachary Nelson will head it.

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