During the company's 33-year history "CA" has been
said to stand for many things: "Change Always", "Constant
Aggravation", "Chicken Again" (for those who have enjoyed the poultry
catering at the vendor's yearly user conference), and even occasionally
"Computer Associates". Ironically it is the latter moniker that the
vendor seems frustratingly unable to shake off even after officially changing
its name in 2006 to simply "ca". At the vendor's industry analyst
symposium, held recently in Ottawa, even the happy reference customers shipped
in to share their stories of success and partnership seemed unable to remember
that their host's brand had been updated, referring to "Computer
Associates" more than once during their otherwise glowing descriptions of
the products and levels of customer service they now receive.
Branding issues aside, CEO John Swainson was keen to stress,
"This is not your grandfather's CA." Swainson and fellow execs
emphasised that the accounting scandals of the past are now a distant blip in
the rear-view mirror and that all eyes are towards the future. The various
reference customer stories would seem to support that claim, while CFO Nancy
Cooper presented financial performance numbers indicative of a smoother ride
through the turbulent economic waters of the past twelve months than many IT
vendors can boast. CA's unsecured debt rating has recently been upgraded by Moody's
Investors Service to "Baa3" from "Ba1", though Wall Street
(again) appears not to have noticed—the share price continuing to trade in
the $17 to $18 range.
With a credit rating now several grades above California's
(a state referred to in the US by the two letter code "CA") the
vendor is well placed to be able to bolster its solid cash position with better
interest terms for current debt as well as any potential new debt lines needed
to support future strategic market moves. The vendor continues to trim expenses
through headcount reductions, divestiture of a bloated property portfolio (a
legacy of the 50 or so acquisitions CA has completed), and modernisation of the
previously archaic spaghetti of internal processes and systems.
No successful company survives a recession however merely by
cutting costs; successful companies invest wisely during lean markets through
both organic growth and strategic acquisition. CA's exec's were predictably coy
on the subject of potential acquisitions, other than to say that any performed
would be designed to improve the performance of existing business units rather
than being intended to take the vendor into entirely new markets. So while
market investment remains a "wait and see", there is already
significant evidence of investment in internal sales and development.
Meanwhile, if there was ever an audience that can judge the
accuracy of Swainson's "Not your Grandfather's CA" claim it is the
mainframe management field. IBM's big iron platform, relied upon for its
performance, scalability and reliability, is hardly considered sexy and modern.
You're far more likely to find someone's grandfather dealing with the esoteric
systems management tasks for the environment than you are a twenty something
recent IT industry entrant.
While CA continues to be a major mainframe market player
over the last decade, it has allowed its attention to be diverted away from fully
supporting its substantial mainframe customers. As CA focused its attention during
the last two decades on building out its distributed systems plays it allowed
its mainframe toolset and staff skills base to languish and decline in size and
relevance. As a result CA's market share has been whittled away by competitors
like IBM and BMC, while vendors like HP and Microsoft have put much effort
toward attempting to shift customers off the platform completely.
There is much evidence however that CA has again remembered
the significance of the mainframe market and, today, CA's mainframe business
unit, headed by CA long timer and EVP Chris O'Malley, provides perhaps the best
evidence of the internal investment CA is making as it looks toward the future.
O'Malley describes the development investment now being poured into
reinvigorating CA's mainframe management play as being "the largest single
investment we are making in development effort." It remains to be seen
whether Grandad Sysprog can forgive CA for losing interest in them for so long,
however no one can rightly accuse O'Malley and his team of a less than sterling
Meanwhile SVP Dave Hansen's security management business
unit continues to address the occasional execution misstep of recent years
whilst nimbly and wisely striding into complementary markets by way of the
acquisition of DLP vendor Orchestria. Hansen's team is jostling for market
share in the identity management market with the likes of IBM and Oracle, even
as the latter continues to attempt to smoothly swallow Sun. Oracle perhaps
ought to look back to the effort CA made immediately after its 2004 acquisition
of web security vendor Netegrity to reassure a somewhat nervous user base of
its post acquisition product intentions.
While Sun's identity management customers consider what the
roadmap might be for them CA is launching an aggressive swapout program to
displace Sun security software with its own. Any customers tempted by CA's
offer do need to consider the services effort involved in the product exchange,
however the programme is worth a look if for no other reason than as a leverage
point in future pricing negotiations with Oracle.
Hansen's team is not without challenges of its own however.
CA's security information and event management (SIEM) capabilities, once on the
ascent in the market, have now languished for several years. CA's share of the
SIEM market has basically declined to irrelevance as products failed to deliver
on performance and functionality promises and development roadmaps failed to be
executed. Hansen seems well aware however of the need to revive the vendor's
performance in this space, and time will tell whether this time CA can succeed.
One suspects that they only have one more roll of the SIEM dice.
CA's overarching message, tying together systems and network
management, mainframe, security and its nascent governance product portfolio is
referred to as "Lean IT", which itself is described as a deliverable
of its EITM strategy. The lean economic times of late have made CA hungry for
success and in many areas there is evidence that the infrastructure management
vendor has got its missing mojo back. Granddad might not recognise aspects of
today's CA, which is not necessarily a bad thing. CA—perhaps it now actually
stands for "Consider Again".
attended CA's Industry Analyst symposium in Ottawa. The author worked for CA
until 2007, and today holds no financial interest in the vendor.