Item 1. Business

Overview

Symantec Corporation is a global leader in cyber security. We provide cyber security products, services and solutions to more than 350,000 organizations and 50 million individuals worldwide. Our Integrated Cyber Defense Platform helps enterprise, business and government customers unify cloud and on-premises security to protect against threats and safeguard information across every control point and attack vector. Our Cyber Safety solutions (delivered through the Norton and LifeLock offerings) help consumers protect their information, identities, devices and networks at home and online.

Our business and consumer offerings are powered by the largest civilian threat intelligence network, which uses machine learning and human intelligence to analyze trillions of rows of data every day across hundreds of millions of devices to discover and help prevent advanced threats that might otherwise go undetected. We believe this threat intelligence data is a competitive advantage, and a primary way we are able to provide faster and better protection for customers.

Founded in 1982, Symantec has operations in more than 45 countries. Our headquarters are located at 350 Ellis Street, Mountain View, California. Our Internet home page is located at www.symantec.com. The information contained, or referred to, on our website is not part of this annual report unless expressly noted.

Fiscal 2018 Business Highlights

During fiscal 2018, we continued to make progress enhancing and expanding our product and services portfolio and improving product integration, partner integration and sales delivery to help business customers deploy our Integrated Cyber Defense Platform. We also made progress driving revenue growth and market adoption for our Consumer Digital Safety solutions, building on our Norton and LifeLock product portfolio. In addition, we implemented operational improvements to reduce costs and complexity, building on the business transformation programs we initiated in fiscal 2017, and leveraged synergies from the successful integration of our acquired businesses.

	•		Our enterprise product teams built extensive point-to-point integrations across endpoint, network, cloud and email security products, responding to customer demand to consolidate vendors and enhance their security posture across control points.

	•		We further extended our Integrated Cyber Defense platform through application programming interfaces (APIs) and engineering-level integration with more than 100 certified technology partners. Their complementary products and services expand our ecosystem, helping businesses implement a coordinated and robust approach to threat protection, detection and response.

	•		We began offering consumers bundled services of our Norton-branded security services with LifeLock-branded identity theft protection services, allowing individuals and families to help defend against increasingly complex online threats. Bundling these solutions enabled us to combine our Norton and LifeLock demand generation and customer relationship management programs to drive new customer acquisition, improve retention and cross-sell within our large installed base.

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	•		We completed several acquisitions, including Fireglass Ltd. and Skycure Ltd.

	•		Fireglass provides agentless isolation solutions that prevent ransomware, malware, and phishing threats in real-time from reaching user endpoints or the corporate network. With this acquisition, we further strengthened our enterprise security strategy to deliver an Integrated Cyber Defense Platform and extended our participation in the Secure Web Gateway and Email protection markets delivered both on premises and in the cloud.

	•		Skycure provides mobile threat defense for devices running modern operating systems, including iOS and Android. This acquisition extends our endpoint security capabilities. With the addition of Skycure our Integrated Cyber Defense Platform now enables visibility into and control over all endpoint devices, including mobile devices, whether corporate owned or bring your own device.

	•		We completed the divestiture of our Website Security (“WSS”) and Public Key Infrastructure (“PKI”) solutions to DigiCert, Inc., allowing us to sharpen our enterprise security focus on Integrated Cyber Defense. At the closing of the transaction, we received a minority ownership stake in DigiCert.

	•		We launched significant new products to advance our portfolio and competitive position:

	•		Symantec Endpoint Protection 14.1 delivers superior, multi-layer protection to help stop threats regardless of how they attack endpoints, while integrating with other security products to provide an orchestrated response. Its single, lightweight agent offers high performance while maintaining end-user productivity. In addition, Symantec Endpoint Protection 14.1 is designed to be effective even in sites with low connectivity, using advanced machine learning and other signature-less technologies to minimize the need for content updates.

	•		Symantec Advanced Threat Protection 3.0 extends and differentiates our endpoint security offering with new technology that includes file-less attack detection and enhanced adversary intelligence. It also enables “flight recorder” functionality, which records all activity on the endpoint, providing valuable forensic data to incident responders with no new agent to install.

Business Strategy

Our strategy is to combine best-of-breed technology with unmatched scale to deliver comprehensive cyber security platforms for enterprise, business and government customers, as well as consumers.

Our Enterprise Security strategy is to leverage our product portfolio, partner ecosystem and global threat intelligence network to deliver Integrated Cyber Defense to enterprise, business and government customers. Our Integrated Cyber Defense platform enables us to acquire new customers and cross-sell our full portfolio of products and services to existing customers with improved visibility, enhanced controls, accelerated response and reduced cost of ownership.

Our Consumer Digital Safety strategy is to combine and leverage our portfolio of Norton and LifeLock brands, products, and services to deliver a comprehensive set of Cyber Safety solutions that addresses today’s continually evolving and increasingly complex threat landscape. This threat landscape puts consumers at increased risk of having their security, privacy, and identities compromised. As risks shift from PC-based attacks to more sophisticated threats (ransomware, identity theft, Internet of Things (“IoT”) risks), our software and services provide a multi-layered approach to protect consumers everywhere, regardless of device, network or location.

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Products and Services

Enterprise Security Portfolio: Integrated Cyber Defense

Our Enterprise Security portfolio includes a deep and broad mix of products, services and solutions, delivered as part of an Integrated Cyber Defense platform. Our platform unifies cloud and on-premises security to provide advanced threat protection and information protection across all endpoints, networks, email, and cloud applications. Key components of the platform include:

	•		Core Services

	•		Advanced Threat Protection: Multiple layers of threat prevention, detection and forensic technology provide a robust view of malicious activities across control points, enabling users to contain, investigate and remediate threats.

	•		Information Protection: Encryption, data loss prevention, multi-factor authentication, tagging, and analytics enable businesses and governments to protect confidential information and IT assets while managing compliance requirements and restricting access to authenticated users.

	•		Control Points

	•		Endpoint Security: A single agent architecture delivers multi-layered security across all possible endpoints - desktop, server, mobile, and IoT - and enables customers to protect enterprise and mobile workforces regardless of operating system, device or network security approaches.

	•		Network Security: Cloud and on-premises network security solutions, based on an advanced proxy architecture, provide superior defense against advanced threats, enable users to protect critical business information, and help ensure secure and compliant use of cloud applications and the web.

	•		Email Security: Multiple layers of protection (including threat isolation and advanced analytics) against ransomware, spear phishing and enterprise email compromise help identify targeted attacks, and enable users to protect email against user error and data leakage.

	•		Cloud Security: Advanced solutions that secure cloud access, cloud infrastructure and cloud applications, and provide in-depth visibility, data security, and threat protection to safeguard users, information and workloads across public and private clouds.

	•		Foundation

Our solutions are powered by the following critical features:

	•		Threat Intelligence: A global threat intelligence network applies artificial intelligence to analyze over 1 trillion lines of telemetry annually, automatically updating intelligence on millions of malicious files and URL threat indicators across all control points to discover and block advanced targeted attacks that might otherwise go undetected.

	•		Open Ecosystem: A rich set of open APIs (Application Programming Interfaces) with over 100 certified technology partners creating the broadest ecosystem in cyber security, enabling a coordinated and robust approach to threat protection, detection and response.

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	•		Platform Integrations: A curated set of multi-point integrations between Symantec and technology partner solutions, orchestrating and automating actions, events and intelligence across the platform and eco-system to empower a powerful cyber defense.

In addition to our core product portfolio, Symantec offers enterprise security services including:

	•		Consulting Services: We provide the experience, expertise, and industry intelligence to assist enterprises to better architect, design, implement, and optimize their security software, people and processes. Symantec consultants guide enterprises toward solutions that meet their business goals and leave them with the knowledge to maintain and enhance their security environment.

	•		Premium Support Services: Our premium support services for enterprises focus on timely and accurate issue resolution by placing a product family expert at the center of a tailored support experience, who provides technical support, manages escalations, delivers case and system reviews, oversees environmental health checks, and provides proactive services like upgrade planning and feature optimization.

	•		Cyber Security Services: We provide continual threat monitoring, customized guidance, and 24x7 personalized service within an enterprise’s security environment through our Managed Security Services, DeepSight Intelligence, and Incident Response Services.

Consumer Digital Safety Portfolio

Our Consumer Digital Safety solutions consist of the following key elements, which we are integrating into a singular user experience for individuals and their families:

	•		Norton Security: Our Norton Security solutions are available as a subscription service providing protection for devices against malware, viruses, adware, and ransomware on multiple platforms: Windows, Mac, Android and iOS. Users also have access to a password manager, parental controls, and safe web browsing that blocks malicious sites and filters browser search results. Users also can perform secure cloud backups of photos, financial files and other important documents on Windows, providing additional protection in the event ransomware attacks make these files unavailable. For mobile devices, Norton Security also filters risky apps, enables stolen device recovery, provides contact recovery, and blocks unwanted spam texts and calls. Norton Security includes 24x7 support by trained support agents who work to remediate any problems.

	•		LifeLock Identity Theft Protection: Our LifeLock identity theft protection solution provides identity monitoring, alerts, and restoration to our customers. LifeLock puts users in control of their identity elements, including social security numbers, bank accounts, email addresses, physical addresses, driver’s license and phone numbers. The service alerts users on key events and recommends actions to prevent unauthorized access. If an identity theft takes place, LifeLock’s identity experts work with the user to restore their identities, managing interaction with various governmental agencies, financial institutions and merchants - and addressing legal fees, wage loss and associated damages.

	•		Norton Wi-Fi Privacy: Our Norton Wi-Fi Privacy service offers a protected way to connect to the Internet, encrypting data users send over Internet connections and enhancing levels of privacy online. With this service, users can confidently send private information like passwords, bank details, and credit card numbers when using public Wi-Fi on PC, Mac or mobile device without risk of compromise. Users can also access globally to their favorite

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	apps, websites and online streaming by changing their virtual location. This service also limits the ability of websites to track users, thereby eliminating persistent personalized ads based on browsing history.

Business Segments, International Operations and Significant Customers

For financial information regarding our Enterprise Security and Consumer Digital Safety segments, revenues and property and equipment by geographical area and significant customers, see Note 14 to the Consolidated Financial Statements in this annual report. For information regarding risks associated with our international operations, see Item 1A, Risk Factors.

Sales and Go-to-Market Strategy

Our go-to-market network includes direct sales forces and broad e-commerce capabilities, as well as indirect sales resources that support our global partner ecosystem. We also maintain strategic relationships with a number of original equipment manufacturers (“OEMs”), Internet service providers (“ISPs”), global service integrators (“GSI”s), wireless carriers, and retail and online stores through which we market and sell our products.

Enterprise

We sell and market our products and services to large enterprises, including business, government and public-sector customers, through our field sales force and reseller channels. Our field sales team leverages our global partner ecosystem, primarily targeting senior executives and IT department personnel responsible for managing a company’s highest-order IT and cyber security initiatives.

We also sell and market our products and services to small, medium and large businesses through field sales and inside sales forces that leverage indirect sales partners around the world, who are specifically trained and certified to sell our solutions. These partners include national solution providers, regional solution providers, national account resellers, global/federal system integrators, and managed service providers.

Our enterprise products and services are also available on our e-commerce platform, as well as through authorized distributors, GSIs and OEMs, who incorporate our technologies into their products, bundle our products with their offerings, or serve as authorized resellers of our products.

Consumer

We sell and market our consumer products and services to individuals, households and small businesses globally. We bring these products to market through direct marketing and co-marketing programs supported by our e-commerce and tele-sales platforms. In addition, we utilize Internet-based resellers, system builders, ISPs, employee benefits providers, wireless carriers, retailers, and OEMs to distribute our offerings worldwide. We drive consumer business growth through global brand and demand campaigns, new customer acquisition, improved retention cross-sell and customer success programs.

Research and Development

Symantec embraces a global research and development strategy to drive organic innovation and product integration across our portfolio. Our engineering and product management teams are focused on delivering new versions of existing product lines as well as developing entirely new products and

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services to drive the company’s leadership in cyber security. We also have a technology research organization focused on short, medium, and longer-term applied research projects, with the goal of transferring completed innovations into our product groups for commercialization.

Symantec’s Security Technology and Response organization is a global team of security engineers, threat analysts, and researchers who provide the underlying functionality, content, and support for many of our solutions. These front-line security experts analyze threat telemetry collected through our vast cyber intelligence networks to protect our customers against current and emerging threats. Our research and development teams also leverage these vast data sets and insights to develop new technologies and approaches in order to improve security outcomes for our customers.

Research and development expenses were $956 million, $823 million and $748 million in fiscal 2018, 2017 and 2016, respectively. We believe that technical leadership is essential to our success, and we expect to continue to commit substantial resources to research and development.

Product and Technical Support

Symantec has support facilities throughout the world, staffed by technical product experts knowledgeable in the operating environments in which our products are deployed. Our support experts assist customers with both issue resolution and threat detection.

We provide Enterprise Security customers with various levels of support. Our support program offers annual maintenance support contracts, including content, updates, and technical support. Our essential technical support includes: self-service options, assisted support delivered by telephone or electronically during contracted-for hours, immediate patches for severe problems, periodic software updates, and access to our technical knowledge base and frequently asked questions.

Our Consumer Digital Safety support includes self-help online services and phone, chat, and email support worldwide. Most of our Norton Security products come with automatic downloads of the latest virus definitions, application bug fixes, and patches, as well as a “Virus Protection Promise,” which in some markets provides free virus removal services to customers whose protected computers become infected. Our Consumer Digital Safety service and support offerings come with 24x7x365 support, along with remediation services during normal business hours.

Competition

Our markets are consolidating, highly competitive, and subject to rapid changes in technology. The competitive landscape has changed significantly over the past few years, with new competition arising. Some of the market growth has come from startups that focus on solving a particular issue or delivering a niche-oriented product, and from larger integration providers that increasingly seek to add to or extend their offerings. We focus on delivering comprehensive customer solutions, integrating across our broad product portfolio and partnering with other technology providers to differentiate our offerings and platforms from the competition.

In addition to the competition we face from direct competitors, we face indirect or potential competition from retailers, application providers, operating system providers, network equipment manufacturers and other OEMs who may provide various solutions and functions in their current and future offerings. We compete with these same parties to acquire technologies, products, or companies. We also compete with other software companies in our effort to place our products on the computer equipment sold to consumers and enterprises by OEMs. We compete for access to distribution channels and for spending at the retail level for our consumer offerings and in corporate accounts for our enterprise offerings.

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Our Enterprise Security competitors vary by product category, geography, channel and customer size:

	•		Endpoint security competitors include McAfee LLC (formerly Intel Security, “McAfee”), Microsoft Corporation (“Microsoft”), and Carbon Black, Inc., as well as several point-product competitors, freeware providers and regional security companies.

	•		Network security competitors include Palo Alto Networks Inc. (“Palo Alto”), FireEye Inc. (“FireEye”), Cisco Systems, Inc. (“Cisco”), McAfee, and Forcepoint LLC (“Forcepoint”), as well as other established and emerging companies.

	•		Cloud security competitors include Cisco and McAfee (formerly Skyhigh Networks), as well as other established and emerging companies. We expect additional competition as the market for security-as-a-service continues to develop and expand.

	•		Email security competitors include Proofpoint, Inc. and Microsoft.

	•		Advanced threat protection competitors include McAfee, Palo Alto, FireEye, International Business Machines Corporation (“IBM”) and Dell EMC, as well as Niksun and Trend Micro. As new IT budgets are created to address next-generation threats, we expect to compete with additional specialized vendors as well as larger vendors that may continue to acquire or bundle their products.

	•		Information protection competitors include RSA (a Dell Technologies business), McAfee, Forcepoint, Digital Guardian and Microsoft.

	•		Cyber security services and managed security services competitors include FireEye, IBM, and SecureWorks Corporation, as well as other additional established and emerging companies.

Our Consumer Digital Safety competitors vary by product category, geography and channel. Norton Security competitors include McAfee, Microsoft and Trend Micro. Consumer backup product competitors include Carbonite, Inc. LifeLock identity theft protection competitors include credit bureaus Experian, Equifax, and TransUnion, as well as others including Affinion, EWS, Intersections, and LexisNexis.

We believe that the principal competitive factors necessary to be successful in our industry include product quality and effectiveness, time-to-market, price, reputation, financial stability, breadth of product offerings, customer support, brand recognition, and effective sales and marketing efforts.

Intellectual Property

Protective measures

We regard some of the features of our internal operations, software, and documentation as proprietary and rely on copyright, patent, trademark and trade secret laws, confidentiality procedures, contractual arrangements, and other measures to protect our proprietary information. Our intellectual property is an important and valuable asset that enables us to gain recognition for our products, services, and technology and enhance our competitive position.

As part of our confidentiality procedures, we generally enter into non-disclosure agreements with our employees, distributors, and corporate partners and we enter into license agreements with respect to our software, documentation, and other proprietary information. These license agreements are

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generally non-transferable and have either a perpetual or subscription based time limited term. We also educate our employees on trade secret protection and employ measures to protect our facilities, equipment, and networks.

Trademarks, patents, copyrights, and licenses

Symantec, and the Symantec Norton and LifeLock logos, are trademarks or registered trademarks in the U.S. and other countries. In addition, we have used, registered, or applied to register other trademarks and service marks to help distinguish our products, technologies, and services from those of our competitors in the U.S. and other countries. We actively enforce our trademark, service mark, and trade name rights in the U.S. and abroad based on our rights under common law, and various state and federal laws and regulations, as well as rights recognized by international treaties and conventions. The duration of our trademark registrations varies from country to country, and in the U.S. we generally are able to maintain our trademark rights and renew any trademark registrations for as long as the trademarks are in use.

We have approximately 2,225 patents, in addition to foreign patents and pending U.S. and foreign patent applications, which relate to various aspects of our products and technology. The duration of our patents is determined by the laws of the country of issuance and for the U.S. is typically 17 years from the date of issuance of the patent or 20 years from the date of filing of the patent application resulting in the patent, which we believe is adequate relative to the expected lives of our products.

Our products are protected under U.S. and international copyright laws and laws related to the protection of intellectual property and proprietary information. We take measures to label such products with the appropriate proprietary rights notices, and we actively enforce such rights in the U.S. and abroad. However, these measures may not provide sufficient protection, and our intellectual property rights may be challenged. In addition, we license some intellectual property from third parties for use in our products, and generally must rely on the third party to protect the licensed intellectual property rights. While we believe that our ability to maintain and protect our intellectual property rights is important to our success, we also believe that our business as a whole is not materially dependent on any particular patent, trademark, license, or other intellectual property right.

Seasonality

As is typical for many large technology companies, our business is seasonal. Revenues are generally higher in our third and fourth fiscal quarters.

Corporate Responsibility

Our annual Corporate Responsibility Report can be found via the Symantec website at https://www.symantec.com/about/corporate-responsibility.

Audit Committee Investigation Completed

As previously disclosed, the Audit Committee has concluded its internal investigation, which was originally announced in May 2018. Please see Part III, Item 11 “Executive Compensation” — “Executive Compensation and Related Information” — “Compensation Discussion & Analysis” — “Additional Matters — Audit Committee Investigation” for more details.

Employees

As of March 30, 2018, we employed more than 11,800 people worldwide.

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Available information

Our Internet home page is located at www.symantec.com. We make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file such material with the Securities and Exchange Commission (“SEC”) on our investor relations website located at www.symantec.com/invest. The information contained, or referred to, on our website is not part of this annual report unless expressly noted. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding our filings at http://www.sec.gov. In addition, you may read and copy any filing that we make with the SEC at the public reference room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room.