Computer Associates

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CA, Inc.

Type	Public (NASDAQ: CA)
Founded	1976
Headquarters	Islandia, New York, USA
Key people	John A. Swainson, CEO; Michael J Christenson, President & COO; Russell Artzt, Vice President & Cofounder; Nancy Cooper, CFO; Al Nugent, CTO; Jim Bryant, CAO; Don Friedman, CMO
Industry	Enterprise software IT Services
Products	See article
Market cap	$8.7 billion USD[1]
Revenue	▲ $4.3 billion USD (2008)[2]
Employees	13,700 (2008)[2]
Website	CA, Inc.

CA, Inc. (NASDAQ: CA) — formerly, Computer Associates, Inc. — is a multinational computer software corporation headquartered in Islandia, New York. More specifically, it develops and markets information technology (IT) management software, which it sells both directly via its sales team and indirectly via systems integrators, value-added resellers, and other service providers.

The company articulates its vision of how enterprises can harness the power of IT through what CA calls Enterprise IT Management (EITM). EITM divides into three broad categories across distributed or mainframe environments:^[3]

• Govern: Help make better decisions by giving enterprises insight into their IT investments and risk from a single place.
• Manage: Make it easier to manage technology so that high-quality IT services can be delivered at a competitive cost.
• Secure: Ensure secure access to the information, applications, systems and services needed to conduct business.

CA, which posted $4.3 billion USD in revenue for fiscal year 2008 (ending March 31, 2008),^[2] maintains 150 offices in more than 45 countries.^[4] The company employs 13,700 people (March 31, 2008) ),^[2] including 5900 engineers.^[2] The Software Top 100^[5] — an independent initiative — ranks CA as the seventh-largest^[6] software company in the world by 2007 revenue. CA holds more than 600 patents worldwide, and more than 1,000 patent applications are pending.^[2]

History^{[7] [8]}

See also: Charles Wang

See also: Russell Artzt

Inception and Early Years

In 1969, under regulatory pressure, IBM announced its decision to unbundle the sale of mainframe computers from computer programs and support services.^[9] (At this time, the computer industry was dominated by mainframes, principally from IBM.) The decision opened new markets to competition and provided an opportunity for entrepreneurs to enter the nascent software industry — an opportunity that Charles Wang and his friend and business partner Russ Artzt exploited by creating a company to develop and market mainframe software, and they developed several products for the mainframe market, with modest success. In 1976, they obtained the North American distribution rights for CA-Sort, which had previously been distributed by Pansophic Systems under the name PanSort. CA-Sort was originally developed by a Swiss company named Computer Associates, which had been founded by Sam Goodner and Max Sevcik several years earlier. CA-Sort had found success in Europe, but sales in North America hadn't kept pace. Wang and Artzt established a new venture (in partnership with the Swiss company), which they named Trans-American Computer Associates, and went to market with CA-Sort, along with their original products.

The CA-Sort program helped computers to sort data efficiently. Its superior performance, combined with the sales acumen of Charles Wang, led to rapid growth in the large and lucrative North American market. After merging with the original Swiss company in 1980, the new global venture (subsequently known as Computer Associates International, Inc.) was able to expand, hiring more salespeople and programmers and acquiring many smaller software companies in the following years. The acquisition in 1987 of Uccel Corp. made CA the largest independent vendor of mainframe infrastructure software. It also made Walter Haefner, who was half-owner of Uccel at the time, its largest individual shareholder, a distinction he still enjoys.^[10]

1980s

Following an initial public offering in 1981, the company expanded rapidly through a series of acquisitions, including software makers Capex, Information Unlimited Software, Johnson Systems, CGA Computer, and Uccel. Whereas CA’s focus during this time was on system utilities, the company also sought to compete in the applications market with firms such as Microsoft and Lotus Development Corporation through acquisition of companies that provided spreadsheet, word processor, graphics, and other application software. As the decade ended, CA became the first software company to exceed $1 billion USD in sales.

1990s

In the early years of the 1990s, CA was forced to address criticism of the company (specifically, a lack of strategic focus, incompatibilities between its disparate product line, a reputation for poor customer service, and failure to win a significant share in application software markets) as well as a sharp decline in its stock price, which fell more than 50% during 1990. The ensuing changes included a push into foreign markets (Japan, Canada, Africa, and Latin America), reform in how the company charged its customers for software maintenance, and improved compatibility with products from other vendors such as Hewlett-Packard, Apple Computer, and Digital Equipment Corporation. Meanwhile, CA continued to expand through acquisitions, most notably in client-server computing (Legent Corporation for $1.78 billion USD in 1995, at that time the biggest ever acquisition in the software industry) and data storage software (Cheyenne Software for $1.2 billion USD in 1996).

2000s

CA faced further challenges in the early 2000s including constraints imposed by the U.S. Department of Justice on acquisitions, the need to service and refinance large amounts of debt, and a proxy battle between the board and shareholders.^[11] The company also suffered from controversies regarding executive compensation, accounting methods, and insider-trading by its then CEO and chairman, Sanjay Kumar. Between 2004 and 2006, CA made sweeping changes among its board and executive team, including the appointment of a new (and current) CEO, John Swainson, plus new appointments in the roles of Chairman, Executive Vice President of Strategy and Business Development, CFO, COO, CTO, Chief Marketing Officer, Chief Administrative Officer, and co-General Counsel, most of which were outside appointments.

During this time, the company presented its Enterprise IT Management (EITM) vision to unify and simplify enterprise-wide IT^[12] and debuted the largest number of products in its history. Underscoring the message of a changed company, CA also unveiled a new global branding program to inspire the industry to “Believe Again” in the power of technology to support business.^[13] CA changed its name from “Computer Associates, Inc.” to “CA, Inc.” in 2006.

Software Products

CA offers a broad portfolio of software products and services for both distributed computing and mainframe environments in support of its Enterprise IT Management (EITM) vision.^[14] The portfolio spans the following product categories:^[15]

• Infrastructure and operations management
• Project, portfolio, and financial management
• Security management
• IT service and asset management
• Application development and databases
• Database management
• Application performance management
• Storage and recovery management
• Business governance

The company maintains product development staff in locations worldwide including the United States, Australia, China, the Czech Republic, Germany, India, Israel, Japan, and the United Kingdom.^[2] Most of CA’s products target large and medium-size enterprises, but some of its product line — for example, its anti-virus, anti-spyware, and personal firewall solutions — are for home and home-office users.^[16]

Controversies

CA has been party to a number of lawsuits over its thirty-plus year history, and particularly so during the period from the early 1990s to early 2000s. One of the higher-profile disputes was a 1992 suit by Electronic Data Systems (EDS), which was a CA customer. EDS accused CA of breach of contract, including misuse of copyright, and violations of anti-trust laws. CA filed a counter-claim, also alleging breach of contract, including copyright infringement and misappropriation of trade secrets.^[17] The companies reached a settlement in 1996.^{[7] [8]} Meanwhile, a hostile (and unsuccessful) takeover bid by CA in 1998 for computer consulting firm Computer Sciences Corporation (CSC) prompted a bribery suit by CSC’s (then) chairman Van Honeycutt against CA’s founder and (then) CEO, Charles Wang.^[18]

Further controversy followed in 1999 when Wang received the largest bonus in history at that time from a public company. Moreover, this receipt (a $670 million stock grant that dated to the vesting of a 1995 stock option^[19]) occurred while the company faced a slowdown in European markets and an economic slump in Asia, both of which had affected CA's earnings and stock price. In total, the company took a $675 million after-tax charge for $1.1 billion in payouts to Wang and other top CA executives.^{[20] [8]}

In 2000 a shareholder-based class-action lawsuit accused CA of misstating more than $500 million in revenue in its 1998 and 1999 fiscal years in order to artificially inflate its stock price. An investigation by the Securities and Exchange Commission (SEC) also followed, which resulted in charges against the company and some of its former top executives. The SEC alleged that from 1998 to 2000, CA routinely kept its books open to include quarterly revenue from contracts executed after the quarter ended in order to meet Wall Street analysts’ expectations.^[21] The company reached a settlement with the SEC and Department of Justice in 2004, agreeing to pay $225 million in restitution to shareholders and to reform its corporate governance and financial accounting controls. Eight CA executives since pled guilty to fraud charges — most notably, former CEO and chairman Sanjay Kumar, who received a 12-year prison sentence for orchestrating the scandal.^[22] The company subsequently made sweeping changes through virtually all of its senior leadership positions.^[7]

Acquisitions^[8]

CA has a long history of acquisitions in the software industry.

• 2006: MDY Group (undisclosed amount)^[23]
• 2006: Cendura (undisclosed amount)^[24]
• 2006: Control-F1 Corporation (undisclosed amount)^[25]
• 2006: Cybermation Inc. – $75 million USD^[26]
• 2006: XOsoft, Inc. ^[27]
• 2006: Wily Technology – $375 million USD^[28]
• 2005: Niku – $350 million USD(renamed CA Clarity)^[29]
• 2005: Concord Communications/Aprisma Management Technologies^[30]
• 2005: iLumin Software Services
• 2005: Tiny Software ^[31]
• 2004: Netegrity
• 2004: PestPatrol (undisclosed amount)^[32]
• 2004: Miramar (undisclosed amount)^[33]
• 2003: Netreon (undisclosed amount)^[34]
• 2003: SilentRunner (undisclosed amount)^[35]
• 2000: Sterling Software – $3.91 billion USD^[36]
• 2000: Cayenne Software
• 2000: Applied Management Systems Inc.
• 1999: Platinum Technology International – $3.5 billion USD^[37]
• 1999: CMSI (Computer Management Sciences, Inc.) – $435 million USD^[38]
• 1998: QXCOM (undisclosed amount)^[39]
• 1998: Viewpoint DataLabs International, Inc.^[40]
• 1998: Realogic, Inc.
• 1997: AI Ware, Inc.
• 1997: Avalan Technology, Inc.^[41]
• 1996: Cheyenne Software – $1.2 billion USD^[42]
• 1995: Legent Corporation – $1.78 billion USD
• 1994: The ASK Group, Inc. – $311 million USD^[43]
• 1992: Nantucket Corporation
• 1991: Access Technology
• 1991: Pansophic Systems, Inc. – $290 million USD
• 1991: On-Line Software International Inc. – $120 million USD
• 1989: Cullinet – $289 million USD
• 1988: Applied Data Research – $170 million USD
• 1987: Uccel – $830 million USD
• 1986: Software International – $24 million USD
• 1986: Integrated Software Systems Corporation (ISSCO) – $67 million USD
• 1985: Top Secret (from CGA for $25 million) USD
• 1985: Sorcim – $27 million USD
• 1985: Arkay Computer (undisclosed amount)
• 1984: Johnson Systems, Inc. – $16 million USD
• 1983: Information Unlimited Software – $10 million USD
• 1983: Stewart P. Orr Associates – $2 million USD
• 1982: Capex Corporation – $22 million USD
• 1977: Viking Data Systems, Inc.

References

External links

• CA Homepage
• CA, Inc. Announces $250,000 Contribution to Sponsor The National Foundation for Teaching Entrepreneurship (NFTE) Biz Camps
• CA Reports First Quarter Fiscal Year 2009 Results
• Top IT Professionals Vote CA “Best” for Ninth Straight PPM Summit
• CA Delivers Enhanced Records Management Solution

Competitors

• Compuware
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• Oracle Corporation
• Symantec
• CITTIO
• Hyperic HQ
• FireScope BSM
• Nagios
• OpenNMS
• PacketTrap
• Zabbix
• ValCom
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