Business Today Net Special

Down, But Not Out

New partnerships, new branding, and an aggressive focus on marketing---a new Computer Associates, call it version 2.0, was in full view at the CAWorld 2001 at Orlando, Florida. The world’s fourth largest software company, currently facing a battle for control, wants to tap the entire enterprise for e-business. BT’s Ashutosh Kumar Sinha reports.

If you are dressed in anything but formal attire at a business conference, chances are that you will be picked as the odd man out. But into its first evening, employees of Computer Associates (CA) attending the CAWorld 2001 at Orlando, chose an attire that was a perfect fit for the Romans from the Julius Caesar era. Just that there was one thing missing: there was no sign of Brutus! But for all the keen eyes, the sight didn’t go unnoticed. So, it was not long before a journalist, one of the over 200 who had converged from all over for the 4-day conference, walked up to a senior CA executive and popped the inevitable question. "Perhaps, he is in Texas," came the reply, tongue firmly in cheek.

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He could not have been joking. For the $6-billion, 1,200-products company that claims that its software manages e-business, is facing a serious takeover threat from a Texas billionaire, Sam Wyly.

But as CA braves the takeover threat, counters a variety of allegations, and musters support among its shareholders, it is quietly working out the most significant change in its business model in 25 years of its existence. The most important transition is that its software in several markets is already available as a service. So, the company selling software, which, for example, managed the network of the enterprise, is now telling its customers that the software could be licenced to them for a month or a year, depending on their convenience. Says CEO Sanjay Kumar, the affable 39-year-old, "We want to be flexible to match the business of our customers. We want to grow with them essentially."

It has been a tough task to market the products of the company, particularly since Kumar himself says that CA does the plumbing work (for e-commerce). The idea now is to create brands around Unicenter, the flagship enterprise management software from CA. But the task is cut out for a company that has historically focused on development of products and has been anything but a good marketing company. Compare CA with another 25-year-old company, Microsoft Corporation, which now dominates the desktops as the preferred operating system around the world. With annual revenues of over $25 billion, it is not difficult to say which has been a company more focused on marketing. Kumar is not shy of admitting that Microsoft as a terrific marketing company. "We can learn a lot from them," he puts.

One part of the task for Kumar, and CA Chairman Charles Wang (pronounced Wong), is a child’s play. Unicenter, its enterprise management software (which helps manage the systems and network of large multi-location companies), is almost accepted as the de facto standard in the industry. Now the effort is to introduce branded products around Unicenter. While bundling of the products may not be easy since CA does not dictate the market like Microsoft, that will help the new products ride the success of Unicenter.

Hence, for storage comes a solution called BrightStor, with close partnership with EMC, one of the largest storage companies in the world. That will address the market for the fastest growing commodity in the business. Similarly, eTrust for Security is an effort to address the security needs of the enterprise as more and more business goes online. Similarly, other products will address the market for portal management.

While all these products attend the needs of large enterprises, there is still a concerted effort to go down the ladder---to address the small and medium enterprises. Hence, the software is becoming modular and instead of buying the entire piece for portal management, for instance, companies can buy smaller chunks of the software. Or just buy a part of the software for managing the storage backup. Now, getting this message across to small enterprise is where the challenge lies.

"Historically, we have had bigger chunks of software, now due to the popping up of facilities like wireless services the network has become more distributed, customers are doing things more distributed than ever before, they want the smaller chunks. So, we are having to innovate constantly to make it smaller," says Kumar.

Small looks attractive, no doubt. But can it add to healthy revenues that will keep the shareholders happy and predators away? Now that’s a million-dollar question.

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