In-Depth

CA: Back in the Saddle Again

With SEC matters behind it and new management at the helm, CA seems leaner, unencumbered, and ready to compete full-force.

• By Stephen Swoyer
• 06/12/2007

Is CA—the former Computer Associates—back? Last month, the software giant closed the book on a half-decade of legal wrangling with the Securities and Exchange Commission (SEC). On top of that, CA reported encouraging Q4 2007 and fiscal year (FY) 2007 financial results.

Add it all up, some industry watchers say, and you have a CA that is lean and ready to compete once again.

"CA [has] undergone tremendous changes. New, tough, focused executives are now in place, and the company now focuses on building products that support critical governance, management, and security processes. In addition, CA is rebuilding and retargeting its sales force," writes veteran industry watcher Joe Clabby, who admits that he was as surprised as anyone by CA’s transformation.

Clabby recently attended CA’s industry analyst symposium in Rye, NY. The mood at that confab was different than those of the past, Clabby indicates. "CA shared in-depth product plans and roadmaps and sensitive sales deployment data with the group of fifty or so visiting IT analysts. Several CA customers spoke off the record on what it was like dealing with the company during the bad old days—and how their relationship with CA has lately changed," he says.

CA president and CEO John Swainson kicked things off, addressing the company’s recent regulatory disentanglement, which ended last month when CA successfully concluded its deferred prosecution agreement with the U.S. Attorney’s Office. From there, Clabby says, Swainson was all business. He outlined a plan to change CA’s direction, recover the good will of customers, and increase stockholder value.

"Swainson comes off like a no-nonsense, focused, highly informed chief executive officer. He’s clearly hands-on, strongly committed to driving the company’s strategy, changing the company’s culture, recovering customer good will, and running the company ‘properly,’" Clabby comments.

One upshot of both Swainson’s ascendance and CA’s legal disentanglements is an altogether new corporate direction. CA no longer wants to be known as just a management company, Clabby points out. Instead, officials insist, it’s a developer of software products that help businesses define their expectations and measure their performance. In other words, it’s a provider of IT governance solutions.

To be sure, CA still plans to flex its management muscles, albeit in a more services-oriented context—i.e., as a provider of tools that emphasize the management of people, processes, and technologies. Ditto for CA’s security assets.

Elsewhere, Clabby points out, the new CA aims to be a more partner-friendly player. "CA continues to provide services and support for its products—but it does not conflict with its business partners by selling high-level business consulting services," he indicates. "This approach should increase CA’s appeal to major professional services firms that all too often find themselves in direct competition with their systems partners."

Finally, Clabby observes, the new CA promises to be more customer-friendly: "CA is making a concerted effort to recover from the worst of its past sins; the alienation of customers. CA now wants to earn the right to become a trusted advisor." To a degree, he suggests, the company already appears to be making good on this promise. "A CA customer panel showed us that the company is actually recovering from sins of the past. Four customers expressed their pleasure in dealing with the new CA—and all plan to buy more products, indicating that the company’s new strategic focus is on the right track."

There are other changes, too. CA has a reputation as the "industry safety net," a phrase coined by industry veteran Mike Schiff, a principal with BI consultancy MAS Strategies. According to Swainson and other CA execs, that’s no longer the case. Clabby explains that CA is no longer a place where ailing companies go to die—or to subsist on life support (maintenance).

Not that CA is getting out of the acquisition game; not by a long shot. "CA continues to acquire companies that will help it drive its product and service strategies. Most notable has been the Clarity acquisition, which provided the means to tuck many CA products under the Clarity graphical user interface and dashboard. In essence, Clarity is an integration umbrella for launching integrated governance, management, and security applications," Clabby says.

All in all, he concludes, industry watchers seem won over by CA’s pitch—though they may still have a reservation or two.

"Part of the beauty of these symposiums is that analysts talk amongst themselves about what a vendor has said," he points out. "Most analysts found CA’s product set to be both broad and deep. Some, however, expressed concerns about what the company is working on and what is really available today."

As a result, Clabby stresses, customers should request demos or do proof-of-concepts before buying CA products. "That said, most analysts left the conference believing that CA is indeed a new company; that CA has an excellent product and sales strategy; and that CA had repaired some of the damage done to its installed base by previous administrations. Further, CA’s executive team impressed every analyst that I talked with."