New Era at CA Gets Under Way

By Chris Gonsalves  |  Posted 2005-02-21 Email Print this article Print
 
 
 
 
 
 
 

Swainson embarks on mission to rebuild software maker by restoring credibility, focusing on system management, security.

After months of uncertainty sparked by corporate scandal, Computer Associates International Inc. earlier this month embarked on a new era, naming CEO-elect John Swainson to his official post as president and chief executive. A veteran of IBM's software division, Swainson said he comes prepared to restore credibility and accountability at CA by paring offerings to a few core technologies and remaking the culture of the Islandia, N.Y., company. Swainson sat down with eWEEK News Executive Editor Chris Gonsalves and Senior Writer Brian Fonseca before his appearance at LinuxWorld in Boston last week to discuss the job ahead.

How would you characterize your role at CA? Is it rehab, rescue, maintenance, other?

It sure as hell isn't maintenance. Maintenance implies I'm here to protect things. I don't think that's at all why the board brought me here or what people are expecting. Rescue may be overstated and overly dramatic, but it's more to the point.

CA has a troubled past. Companies don't voluntarily get themselves into this kind of dilemma where 15 of their senior executives are indicted or otherwise implicated in accounting fraud and various other nasty things, including trying to mislead the government. This is a company that has some serious problems to remedy, and, in that sense, I am coming in as part of a team that is doing that. It's not John, personally, is the savior of the world. It's me and the management team and the employees working together to fix some problems and to build a new CA.

Of late, we've seen companies such as Hewlett-Packard Co. get into trouble by being pretty good at a bunch of things and excellent at very few. How will CA, with its notoriously large portfolio, avoid that trap?

We'll concentrate on a small number of things that we can get really good at. In our case, it's two: system management and security. Today, we are the market leader in system management, and we're tied for leadership in enterprise security, so we've a got a decent starting place. We're going to build on that by acquisitions, as you saw with Netegrity [Inc.]. We're also going to build by investing in development of products in those segments. We're going to try to do those two things astonishingly well and use that to rebuild the franchise.

We have a very important install base of mainframe database customers, but I'd be quick to tell them that the mainframe database is not where we're going. We'll support them as long as they want us to, but we're not going to really fight that battle. It's yesterday's battle.

As CA has wrestled with its internal issues, its competitors have been making strides with products and customers. How concerned are you about the likes of the combined Symantec Corp. and Veritas Software Corp. challenging CA in what you've identified as a key area?

Symantec is strong in anti-virus and intrusion detection, but that's not core to our franchise, except that our enterprise customers need some way to protect their infrastructure. We have anti-virus products to do that. So we compete with [Symantec] around the edges. What they are missing is the core infrastructure. They are missing the ability to tie that stuff together, to record, to analyze for patterns. They don't have anything like we have in Unicenter.

I don't think the combination of Symantec and Veritas makes a whole lot of sense, but that doesn't make it into a weaker company. Veritas is [not] going to disappear off the face of the earth tomorrow.

One of the things I like is that the market is fragmented. We're the largest player in enterprise security, and we have less than 10 percent market share. Where's the rest? Spread out over a thousand guys. So I look at that as a huge opportunity. We're going to be very focused, and I think we can do very well. IBM is clearly a strong competitor, but they aren't as focused as we are.

With the market fragmentation, do you think the suite approach still works, or will CA have to find another way to package and deliver the solutions customers are seeking?

It's mostly fragmented in security because no one has put together a real end-to-end offering. I do believe a more integrated set of products that goes from desktop to the mainframe or big server is something that has been missing in security, and thus the fragmentations. I think we've put together pretty close to an integrated environment for security in the enterprise. Unicenter already had that from the systems management side.

Next Page: The wisdom of realignment and reshuffling.

What's the wisdom behind the recent realignment of the business units to focus on industries, along with the corporate reshuffling?

This is the way almost all commercial software companies organize themselves today. You have to recognize that CA did not have its development units organized in a terribly coherent fashion. They were a bit spread out; there were a number of different management models being used.

One thing I concluded very quickly was that we needed to bring development together under a single leader to create a more integrated structure that would include development, marketing and support. That would be a way of getting better responsiveness to the customer and get a better handle on the investment. It turns out CA had run a very effective experiment in this with the eTrust brand, which Russ Artzt had been running for a couple of years, and the experiment had been incredibly successful. I don't take any credit for the idea. When we looked to see what worked, there was proof.

I ran IBM's largest software business unit for seven years, so I've got more than a passing acquaintance with how this system works.

How confident are you that Artzt can repeat the success he's had with eTrust across the entire portfolio?

I don't personalize down to an individual. Russ and his team and the development organization in general can do this. He has the management team that also understands what needs to get done and is interested in winning in the market.

The movement of Mark Barrenechea and Yogesh Gupta has made for some confusing—and apparently overlapping—job descriptions. How do their positions work?

Yogesh works for Russ Artzt and has common technology, architecture and strategy looking across the business units. Mark Barrenechea works for me and looks across the company with a concentration of, strategically, where do we want to go as a company. What business do we want to be in? What acquisitions do we want to make? So his role is very much companywide with a technology focus but looking at repositioning the company. Yogesh's role is as the technology strategist inside Russ Artzt's organization. So they are very different roles.

Are more executive appointments coming soon?

There's still some things we have to figure out. We need a business development guy, and we're close to announcing that. We probably need a few more things in the finance organization. Senior VP level. That's about it right now.

How will you restore investor faith?

There was a whole set of things in our deferred prosecution agreement; most of those we offered as things that were necessary renovations to the CA infrastructure, [such as] putting in place an ERP [enterprise resource planning] system and replacing a rat's nest of old apps, built over 30 years and not well-integrated.

We've put in place a chief compliance officer, [former United Technologies Corp. executive Patrick] Gnazzo. [We're] putting two new independent directors on the board as part of the agreement. There's a lot of things. We are rebuilding the finance department to establish the right set of checks and balances that, frankly, never existed before; re-establishing a legal department, which had a series of problems in the past; and then honestly delivering on our promises in the marketplace.

Is there a culture change going on at CA?

I think so. CA didn't have a strong culture. It's a function being built by acquisition over the course of a relatively short period. IBM had a chance over 100 years to build a strong culture. One of the things I have to do is make sure we build a culture that is customer-focused—that is about being a trusted adviser to our customers. To be an ethical company in everything we do. That all needs to be inculcated into the body of the organization.

The good news is that our employees have seen firsthand what happens when a company loses its way. It's not as though you have to go out and convince them that something is needed. It's about showing them a vision of what the company can do and their role in it.

What parts of your experience from IBM are your bringing to the task at CA?

I'm not consciously trying to bring any parts of IBM culture to CA. IBM does a lot of good things around process and focus on customer. I'll bring those. On the other hand, one of the things I've learned from CA is the resourcefulness of the people, their entrepreneurship, their ability to endure almost any kind of [obstacle] management throws at them and be able to persevere.

 
 
 
 
 
 
 
 
 
 

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