February 16, 2005 10:35 AM PST

Seeking focus, CA will mothball some products

BOSTON--Computer Associates International intends to de-emphasize hundreds of its products and pick up the pace of acquisitions, said CEO John Swainson.

Swainson, who came to CA last fall and took over full CEO and president responsibility earlier this month, said the company needs to drastically winnow down the number of products it focuses on.

"Of the 1,000 or so products we have, probably more than half of them are not really current products any more," Swainson said in an interview Tuesday at the LinuxWorld Conference & Expo here.


John Swainson
CEO, CA
The remaining products have large existing customer bases and are important to the company, he noted. "But just because they're important doesn't necessarily mean they are strategic," he said, adding that those de-emphasized products will move to a maintenance revenue model. He said CA will also divest from a limited number of products.

Instead of trying to keep a portfolio of 1,000 products up-to-date, CA will focus on 300 or 400 products in the security and systems management area. They will receive continued internal investment and be augmented by acquisitions, he said.

CA grew during the 1980s and 1990s largely by buying other companies. That has left the company with a sprawling product line, covering everything from mainframe databases to antivirus software.

"This is one of the harder things I need to work through, both with my teams as well as actually with my customers," Swainson said. "We are taking the core of the company and focusing on that. The other pieces we're going to manage in a noncore way."

CA intends to pick up the pace of acquisitions in security and systems management as a way to fill gaps in its Unicenter and ETrust product lines. The company is shopping for small or medium-size companies, as indicated by its purchase of Netegrity, which sells identity-management software.


The Ingres database is an example of a product that is not strategic, Swainson said. Instead of competing head-to-head with market leaders Oracle, IBM and Microsoft, CA has chosen to create an open-source version in an effort to build community around the software.

Swainson's first major change as CEO was to reorganize the product groups to give them more autonomy to pursue acquisitions and make development and marketing decisions. He also shuffled the top product managers, placing CA co-founder Russell Artzt, who had been running the security product group, in charge of all product groups.

CA is still in the process of fixing a damaged image. In the past, the company has had antagonistic relationships with its customers, and its top executives, including former CEO Sanjay Kumar, have been indicted on charges of fraud relating to improper accounting practices during 1999 and 2000.

The company's board has overseen a complete change in top leadership, including a new chief operating officer, general counsel, chief financial officer and CEO, all of which have come over the past year.

On Wednesday, CA hired Michael Christenson as executive vice president, strategy and business development, to direct alliances and acquisition activities. He is reporting to Chief Operating Officer Jeff Clarke. CA also plans to hire some more staff in its finance department, Swainson said.

Separately, CA intends to bring back its CA World customer conference, which it had decided to suspend this year. The company will hold the conference again, but the get-together will have a more focused message on systems management and security, Swainson said.

 

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