CA aims to recover its former standing

Over the past few years, enterprise software vendor Computer Associates (CA) has worked to shake off the scandal of a high-profile financial reporting saga and rebuild its reputation.

Computing spoke to Jeff Clarke, CA's chief operating officer, about how the firm is getting itself back on track, expanding its European operations and building its share of the security market.

When you joined CA in April 2004 the company was in a difficult period, with the US Securities and Exchange Commission investigating financial reporting anomalies. Why did you join?

I had the choice of many firms but I wanted to be a reformer, and rebuild a company that has a great history, a great set of products and great customers. I came in as chief financial officer to a company where my predecessors have been charged with securities fraud. It is my responsibility, along with the rest of the board, to rebuild the organisation.

I wanted to take CA back to its glory years. This is a company that had seven consecutive years with a cashflow of more than $1bn (£576m) a year.

How is CA getting over the financial reporting scandal?

We now have a new chief executive and chief operating officer. We also have a new chief financial officer, chief information officer, chief marketing officer, and now a chief compliance officer and general counsel.

CA has built a management team with people from major backgrounds, with many years of experience. We have all worked at organisations such as Dell, IBM, HP and Philip Morris. We are looking to rebuild the company to its former greatness, and with a strong management team we are building strong controls in the sales environment to ensure this does not happen again.

The investigations have been complete for six months, but the government continues in its prosecution of former executives and we will do everything to assist it in this. We need to be precise and conservative in our reporting, and have moved to put in the correct sales and governance controls. We are fully aware of the problems of the past and have taken responsibility for this.

CA has momentum again and we are being aggressive in evaluating companies that we can add to our portfolio. We invest $700m (£403m) in research and development each year, and generate large cashflows.

Last month you acquired firewall security firm Tiny Software. Is acquisition a big part of CA's strategy?

We have started up the acquisition engine again. We have acquired anti-spyware firm PestPatrol, an identity and access management security company called Netegrity, business service management firm Concord Communications and Niku, which is a leading company in IT governance. Most recently we acquired Tiny Software, a personal firewall company.

We also want to do a better job by bringing more technology to market through the $700m (£403m) we spend on research and development.

Growth outside the US is also important. IBM has two-thirds of its business overseas, but CA only has 45 per cent outside of the US, so we are making a bigger investment in building our regional presence.

For example, we are very excited about our presence in eastern Europe and are recruiting 200 mainframe software developers in Prague.

The focus of acquisitions will be in our key areas of network and systems management, storage and security.

Most of your acquisitions appear to be in the security sector. Is security going to become a major focus?

CA has a strong and stable base in the mainframe market. We also have a wonderful emerging market in security. We are the largest enterprise security company in the world, and this is a market most people expect to grow 20 to 30 per cent a year over the next few years.

The leading enterprise security firms are IBM and us. Symantec and McAfee are two consumer security firms that have made acquisitions in this space but they are still trying to build their portfolios.

We see ourselves as an enterprise IT and infrastructure management firm.

The top five software companies in the world are Microsoft, IBM, Oracle, SAP and then CA, where we are leading in infrastructure management and enterprise IT. The only firm that competes with us in the top space is IBM.

We have the total protection suite that includes anti-virus, anti-spyware, personal firewall and PC DNA. It takes a picture of what you have on your PC, copies it and puts it on a central server. So if your PC is corrupted, stolen or lost, when you get a new one you can download all the settings and assets you had saved. There is also storage backup.

Companies want to reduce their cost and improve their security and that's what we are trying to do for them.

What challenges does CA face and how will you overcome them?

Our company results are outstanding and our balance sheets are the best they have ever been, but we need to grow at a faster rate. We are going to look at integrated product sets, acquisitions and improved customer service.