LAS VEGAS – Symantec CEO Enrique Salem told an audience of about 400 of the company’s partners that he expects to see more consolidation in the security and data protection market over the next two years.

Kicking off the security vendor’s Partner Engage conference at the MGM Grand here, Salem stopped short of naming any names (McAfee/Intel, in particular) but noted that “our industry is going through a rapid phase of consolidation” and that it’s a trend he sees continuing for the next two years or beyond. That’s because right now, for those with money in hand, investing in building the business is much more attractive than sitting on cash.

“Interest rates are very low, the lowest they’ve been in 50 years, and our investors don’t want to see cash on the balance sheet making less than one per cent,” Salem told partners. “That’s why you’re seeing so much consolidation.”

Symantec has been on the prowl this year, adding PGP, Guardian Edge and VeriSign to its ranks, part of a strategy outlined by Salem to secure user identities online. The company’s acquisition strategy, he said, is often misunderstood by outsiders, but is focused on adding new opportunities around the company’s core information protection and security offerings. The company’s differentiation, he suggested, is its ability to work across all of the various infrastructure vendor’s stacks.

What about the shoe on the other foot – could the hunter become the hunted? Salem said one of the questions he most often faces in “When will Symantec be acquired?” He suggested that one never says never, but that if Symantec were to be snapped up “at this point, it would be the largest acquisition in software history.”

“There’s still a lot of runway for all of us building on the products we have today,” Salem reassured partners.

Part of that opportunity for the company’s partners is around building solutions around more of the company’s lineup of 200-odd products. Today, Salem said, the majority of the company’s customers have less than two Symantec products in their portfolio. The executive said partners can help reverse that trend by building out solutions with more of the company’s anti-malware and data backup and protection offerings in a packaged fashion.

“Don’t think about point products,” he counseled solution providers. “For so long, we’ve though about ‘let’s do a backup,’ ‘let’s protect against malware.’”

Now, he suggested, partners should focus on building solutions that help take customers to “how they’ll be computing in the future.”

And needless to say in 2010, a big part of that is a cloud message. Salem told partners that Symantec is going to “offer more and more of our portfolio as a service,” moving from on-premises software to thin agents with most of the action happening in the cloud. This is particularly true of its endpoint security offerings, which can be increasingly managed via a Web-based user interface.

For the time being, Salem suggested to expect a hybrid of on-site and cloud-based security and data protection infrastructure, but over time, he expects “more and more of Symantec’s products to be delivered as a service.”