Computer Associates weathers the upsets

By Stephen Ballantyne

Friday 30th July 2004

The year started badly for Computer Associates: an innocuous-sounding reorganisation of its financial reporting methods a year or so ago culminated in an embarrassing boardroom meltdown, with resignations at the top, an investigation by the US Securities and Exchange Commission and shareholder groups suing for the return of substantial sums.

When John Ruthven, Sydney-based senior vice-president in charge of sales in the Asian Pacific and Japan region, visited Auckland recently, he reckoned these ructions at head office had had little effect on the company's business in this part of the world.

"There have been significant changes in our central management and this has had some effect on local operations, both at a structural level for us, in as much as we are now reporting to a new executive vice-president of worldwide sales, Greg Corben, who has come to the company with very strong credentials from IBM."

New chief executive Ken Cron has directed increased funding to software R&D, apparently in an effort to emphasise CA's intention to move forward and put the turmoil of the recent past behind it as rapidly as possible.

"Both the board and the new management team have worked very hard and very quickly to ensure that processes, practices and procedures are in place to prevent a repeat of anything like recent events," Ruthven said.

"Regionally, we're in the second year of a fairly aggressive growth plan. We're putting a very strong focus on customer and employee satisfaction.

"In the Pacific we've seen 25% year-on-year growth, plenty of new business and excellent retention of existing customers." Within New Zealand growth over the past six months has taken the local head count up to 25 employees.

"We're the management software experts and we think that's given us a uniquely strong position in the market. If you look at the stages in the evolution of computing, going from mainframe to client-server to web, it's our belief that we're now in the age of management software today's CIOs are struggling to manage highly complex, highly distributed environments as efficiently as possible. We're very sure that the only way to do that is with sophisticated management solutions such as we provide.

"We're offering the ability for technology within a system to be self-healing, to detect its own faults and diagnose potential points of failure. We're also doing some pretty smart things in network forensics at CA World we demonstrated a product we're developing that can map a wireless network on a perimeter basis, so that stepping in and out of their perimeter would automatically give users access or deny them according to their pre-assigned access level. When that's completed we'll be able to offer wireless branch networking secure enough for banks to use."

Indeed, CA's software holds out a promise of close monitoring and optimum utilisation of every least CPU cycle on every machine throughout an organisation and it doesn't have to be a huge organisation to benefit, either.

"We haven't segmented the market in terms of size. Rather, we've looked at it in terms of who has the business problem.

"The value proposition we push is that if you have a business problem you can actually do something about it today, with management solutions that are not necessarily highly complex or difficult to implement. With minimal investment, organisations can get the benefit immediately making the best use of the hardware you have can reduce the need to spend money on more equipment, and that's an obvious benefit.

"We don't see it as being constrained to a set minimum size organisation; rather, it's applicable to any organisation with a sufficiently complex environment."

CA's New Zealand country manager, Tony Armfield, offers engineers Beca Carter and service provider GDC as two local examples of businesses that have benefited from CA's technology. In both cases they were attracted to CA's offerings by the company's flexible charging system.

"GDC went with us because they offer an ASP-style model to market and they needed some flexibility in the way they were billing their customers. Our ability to license our software month-by-month based on their immediate requirements made us an appropriate solution for them

"Likewise, Beca Carter went with us because they wanted to improve the application of technology in their environment by implementing Unicenter service desk and they wanted to do it on a flexible basis until they had determined the right level for their business.

"Both those organisations would be classified as medium-size in a New Zealand context. Our ability to engage with medium-size companies is a major contributor to our recent success in the New Zealand market."

Ruthven is also keenly aware of the importance of small businesses and entrepreneurship in this country: "I've seen figures that indicate New Zealand is second only to Italy in per capita numbers of people who want to run their own businesses."

One of the more significant challenges CA faces is convincing non-technical managers of the usefulness of their products. Convincing CIOs of the benefits of more efficient system management is easy compared to convincing other C-level managers with less technical savvy.

"It's a generic problem for IT vendors. In our favour is that, because we don't have to implement in a single big bang, IT departments can embark on introducing some of our technology without having to have detailed strategies before they start.

"Also, if it's presented the right way, without jargon and obscure acronyms, simply as a way of managing the IT environment with tools that work flexibly across that environment, the benefits of being able to right-size IT on a daily or even hourly basis can be clear and compelling even for non-technical management. The prize for getting it right is cost saving through efficiency."

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