CA to pause to digest acquisitions

Acquisitive CA foresees no major purchases in the near future, but the firm may still snap up small fry

CA has said it has no plans to continue the aggressive acquisition strategy that has seen it purchase 15 firms in the last two years, according to an executive panel speaking at the CA World user event in Las Vegas this week.

Mike Christenson, chief operating officer at the software management vendor, said that CA had a very ambitious acquisition programme over a two-and-a-half year period to help the company fill gaps in its portfolio, including the purchase of Netegrity for identity management and Concord for network management. “But we don’t have gaps like that now, and we have all the products we need to successfully achieve our EITM [Enterprise Information Technology Management] vision,” he explained. “The last significant acquisition - Wily Technology - was just over a year ago. I don’t anticipate any $300m or $400m acquisitions in the near-term, I think we’re in very good shape.”

Christenson said that CA is still looking at smaller companies to fill small gaps, but any acquisitions would be less frequent. “We’ll continue to keep our eye on technology developments that might be important for us, though, and are already looking ahead to the next 36 months and beyond that,” he added.

Christenson also highlighted the firm’s interest in the ongoing development of another recent acquisition in the technology sector - that of testing and compliance software specialist Mercury by HP. “Mercury was a tough competitor for us,” he said. “HP absorbing them into the larger HP was always going to be a challenge and we’ll have to see if we can take advantage of that in the marketplace.”

Also at the executive panel debate, chief executive John Swainson outlined the importance of India for the future growth of CA. “We have 1,300 people in our development centre in India, which is almost 10 percent of our worldwide headcount and you’ll see that continue,” he explained. “We’ve also started building relationships with the biggest five or six Indian outsourcing companies. We see this as increasingly important for our worldwide business.”

CA also plans to form partnerships with consultancies such as Deloitte and Accenture to help support enterprise customers carrying out business process transformation projects. Swainson said that firms are moving away from the approach of buying a piece of technology to solve a particular problem, and then integrating it themselves. “By and large people are now talking about buying a solution to a problem or buying an outcome, such as more security, more robustness for the business or better controls. As such, they’re looking for a different class of partner than simply a technology partner,” he argued.