John Thompson explains why Symantec kept spending 15-16% of revenue on innovation during a tough fiscal period in 2002. The real customer problem wasn't lacking security products but the high cost and complexity of managing them. The company grew from 2,300 to 4,400 employees and achieved 32% revenue growth by refusing to cut innovation.
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I think the final thing that we've learned is that you cannot, even in challenging times, stop spending to innovate around the theme of what problem you're trying to solve for customers. And as we entered a challenging 2001, which was in fact fiscal year 2002 for us, we concluded that the problem to be solved in the security space was not about security, but it was about the cost of owning and operating the security infrastructure that customers had deployed around the world. Because many of them had already deployed our antivirus products or firewall technologies from other companies or a range of security technologies. But what they found was that they were far less secure than they thought they were. And they had no way to measure the effectiveness of the technologies that they deployed. So rather than pull our horns in, we've spent 15 to 16% of revenues for the last few years to build a portfolio of management tools and integrated security technologies that are now arguably the model for how security ought to be done around the world. Now my board wants to see it bear out in revenue, as do, you know, the investors in our company. But by the same token, we did not back off in challenging times. We continued to invest, not just in new product development, but in the enhancements of our own team. We've grown from 2,300 people when I joined Symantec to 4,400 people today. Last year we grew revenues 32%, we grew human capital at 20%. And so even in challenging times, given the diversity of our product portfolio, the diversity of our customer base, and the diversity of our geographic revenue streams, we've been able to find a way to make it in a tough market.
