CA changes tack to ride out storm

Michael Christenson: We have to plan for a two-year recession. It will be as bad as, or worse than, any other we have experienced

Software maker CA held its annual user conference, CA World, in Las Vegas last week. Among the key announcements were its decision to start offering some of its products as hosted services. In an exclusive interview, chief operating officer Michael Christenson tells Computing why enterprises are now ready to move to the on-demand model for their infrastructure software.

Before joining CA in 2005, you were retired from a 23-year career in investment banking. What was it about the role on offer at CA that attracted you?
I knew Lou Ranieri, who stepped in as chairman [at CA after the departure of ex-chief executive Sanjay Kumar], I knew Jeff Clarke, who was chief operating officer, and I knew Ken Cron, who was interim chairman. I saw the CA role as a great opportunity to do something different.

CA is a big company, not a startup or venture capital company. It has a broad base of technology. It was a big opportunity – ­ the firm just needed a little realignment. It was also great to be inside a technology company.

At previous CA Worlds, much of the focus has been on transformation and moving out of the shadow of past financial irregularities. That theme was not in evidence this year. Does that mean the transformation process is complete?
I have banned transformation from people’s vocabulary. But you can always do better, and we are not letting up in the drive to be more efficient. We have good business processes, now they just have to be executed.

Another change has been the shift away from merger and acquisition activity. Previous shows have been a chance to round up all the latest purchases and detail how they fit into the CA portfolio ­ again, CA has been very quiet on that front this year.
There were some clear deficiencies in the product portfolio when I joined the company, particularly around identity and access management, network management capabilities, and application management capabilities.

We had an offering but it was not market leading and the company had not acquired great technology. So we spent $18bn (£12.2bn) acquiring 15 companies, but there were three things that then caused us
to pause.

First, we needed to integrate what we had acquired. Second, we were in the middle of an SAP implementation and we didn’t want to overlap that with integrating acquired firms. Finally, we saw that there
was nothing out there we needed.
That said, we have not stopped looking. This is a good market to be a buyer, but we have to be much more careful.

Another sign of CA’s shift in focus has been promoting internal development and innovation at the firm, rather than always buying it in. Why is that?
We spend $500m per year on innovation. Our emerging technology team is always looking at developing new markets, but we are mostly focused on finding new opportunities to promote the problem-solving capabilities of our existing portfolio.

CA has recently started offering software-as-a-service (SaaS) products, including Clarity Project and Portfolio Manager On Demand. Why did CA make the move now?
Application software was where SaaS gained traction first, for example Salesforce.com. Now it is being applied to infrastructure software.

We have Clarity, which is very much an application, and we were delivering it as a service before this announcement. We have customers who get Clarity only as a service, and some who want a mix of both. We knew we could get some attention by announcing it at CA World, and we could also feel the demand from customers.

Now we are refining our strategy so we have a platform on which to deliver it, and we will be rolling
out other technology in the future as SaaS.

Do you see an end in sight to the current economic turmoil?
We have to plan for a two-year recession. It will be as bad as, or worse than, any other we have experienced. CA will be the beneficiary of lots of vendor consolidation. We tend to be one of the vendors that firms stick with because we offer a broad portfolio.

Technology that pays for itself, such as CA’s security and application management technologies,
will do fine. Big, complicated, service-oriented technology projects where the ROI is hard to quantify will struggle. It is a hard sell if a deal requires you to put hundreds of services people into an organisation. Hardware vendors will also be under pressure, as a three-year cycle turns to four years.