One Year After Arriving At CA, Swainson Gives Company New Image

John Swainson never thought remaking Computer Associates would be easy. Having arrived at CA one year ago this month after a 26-year career at IBM, he took over as president and CEO at a time when the company was beleaguered by pending criminal charges against his predecessor and other key executives, along with tarnished relations with customers and partners. Nevertheless, Swainson has done anything by take baby steps.

In 12 months' time, Swainson has made several key acquisitions, reorganized the product-centric company into one focused on holistically addressing business-process management (and the IT components that go along with it: systems management, security and storage) and has put in place a seasoned management team. In addition, Swainson is now formally changing the company's name to CA, which comes with a new branding campaign, called "Believe Again."

Despite those changes, CA's stock price has moved little since Swainson's arrival, though it certainly hasn't taken the punishment of one of CA's key rivals, Symantec, which is 50 percent below its 12-month peak--in great part as a result of its $13.5 billion acquisition of Veritas. On the other hand, another key rival, EMC, is trading closer to its 52-week high of $15.09 a share.

Swainson, who openly admits he gives little consideration to CA's stock price, insists rebuilding CA will not happen overnight. "It will take us a couple of years to get to the internal things we have to get done at CA," Swainson recently told a handful of editors from CMP Media, which publishes VARBusiness, in a New York City conference room overlooking Ground Zero.

Swainson didn't seem to be trying to lower expectations; clearly, his goal is to create inertia for CA that will allow it and its partners to grow over the long term. In expanding CA's product portfolio, Swainson is also moving toward broadening the customer set the company now serves.

Today, 70 percent of CA's business comes from a few thousand customers. "We believe there are a series of middle-market customers who have very similar wants and needs, albeit different buying patterns and different channel partnerships than our enterprise customers do, and we're actively seeking to reach them," Swainson said, noting he also is looking to expand the company's geographic reach into high-growing areas such as the Middle East, Eastern Europe, China and India.

Partners are cautiously optimistic. "I think he's making some good moves, but it's too early for me to say Swainson has made his mark," says Todd O'Bert, president of Productive, a Minneapolis-based CA partner.

Product Investments

To reach a broader constituency, CA is investing $650 million to organically grow flagship products Brightstor, eTrust and Unicenter. The latter is the key component of the company's Enterprise IT Management blueprint. Not only is CA releasing a new version of its Unicenter systems management for distributed systems that has a new unified architecture, but the company is going to market with the new release through select midsize enterprise partners.

That's a key shift for CA, which for the past four years has opted to sell Unicenter direct only. Because the new Unicenter r11 has a common database, user interface and is supported by a single management console, Swainson is confident that CA has a competitive edge. The common data repository, called the CA Infrastructure Platform, will make it simpler for partners to go in and assess a customer's needs and integrate disparate systems under a common-management interface, accessing what the company calls a master database, Swainson said.

"All the information, from alerts to asset-management information, can be stored in one place, and it is query-able and accessible by a variety of tools," Swainson said. With the common-user interface, he added, customers will be able to manage storage and security information from the same command-center console.

The CA Infrastructure Platform and its master database link various components--such as workflow, security (common authentication and authorization) and presentation--via the GUI and management.

"It's important that the component pieces all adhere to the CA Infrastructure Platform because that means they can be integrated into overall solutions," either from CA or from third parties, says John Pincomb, vice president of product marketing.

Two key new products that fall under the new Unicenter r11 umbrella are Unicenter NSM (Network and Systems Management) for monitoring heterogeneous networks, and Unicenter ASM (Advanced Systems Management), which provides status information on performance of servers and virtualized clusters. Both will start shipping next month, initially available on Windows 2003 and Linux servers.

During the next six months, CA will introduce additional modules, primarily focused at business-process optimization.

"We will continue to provide more integration between the pieces, more automation of rolls and functions, [and] tie security more tightly into the environment," Swainson said.

And because it is now based on a modular services-oriented architecture, Unicenter will also provide easier integration with third-party solutions, notes Yogush Gupta, CA's chief technology officer.

"Having a common management database not only allows CA technology to work together, but it allows third-party products to integrate into it," Gupta says.

The process of rolling this out to the channel will be incremental. So far, only two major integrators and 20 regional partners are signed on to sell the new Unicenter. For others to become certified to sell it, they have to be recommended either by a customer, another partner or someone within CA, says Gale Persil, a company director of product management. That said, Persil says Unicenter r11 should prove to be a very channel-friendly offering.

What's Good For Unicenter...

In addition to Unicenter, CA is looking to bring integrated solution packaging across all of its product lines and customer segments. The company's recently released Protection Suite r2 for SMBs combines storage (backup and recovery), security, systems management and data-migration tools in a common package.

"It is one integrated interface for configuration, one integrated interface for management, one license to track and manage, from one vendor," says George Kafkarkou, senior vice president of CA's SMB and consumer-channel sales.

Swainson likes how CA stacks up against his rivals. Symantec's breadth is limited by the fact that it doesn't address overall systems and network management, he said, while EMC's focus remains storage and data protection.

"We say [security and data protection] are important, but not nearly sufficient," he said.

Swainson said he's focused on CA as an independent supplier of heterogeneous software. Meanwhile, the acquisitions of antispyware supplier Pest Patrol, network management vendor Concord, IT governance supplier Niku, and e-mail archiving ISV iLumin, among others, promise to broaden CA's software bench. Whether Swainson's message gets partners and customers to "believe again" remains to be seen.

While it may take years to play out, the numbers should give a good indication in 2006.