CA World 2013 Asks CIOs: What Have You Done For Me Lately?

LAS VEGAS: It’s a brave new (CA) World (2013) out there, and CIOs have to ask themselves, “Will I drive the change, or will I be driven by it?” said new CA CEO Mike Gregoire in his keynote Sunday night. The software giant’s annual four-day event has brought together more than 5,000 customers and channel partners from around the world, and they need to understand that “IT’s value today is all about providing the innovation, speed, insight and security the business needs to gain a competitive advantage – using resources from both inside and outside your company.”

There’s a changing relationship between the CIO and the business, between the CIO and the CEO, he said. “It really comes down to what have you done for me lately?”

This creates a huge opportunity for CIOs and other IT leaders to act as a catalyst and enable modern business models and methods – to not only transform IT, but to transform the business, he said. Gregoire also challenged his audience to embrace disruptive technologies such as cloud, mobile, social and big data management analytics to transform business and drive competitive advantage.

CA is focusing on four technology trends — DevOps, mobility, Software as a Service (SaaS) and Big Data analytics management — that will enable its customers to deliver and orchestrate IT with greater impact on business, he said. The benefits of DevOps – the communication, integration and collaboration between software application developers and IT operations professionals – are not trivial, said Gregoire. “We believe our solutions can help you achieve as much as a 30 to 50% reduction in time to market … an 80 to 100% improvement in quality …and a 20 to 30% reduction in infrastructure costs.”

Mobile management is a big challenge for IT organizations, he said, and the discrete products currently available to manage devices do not help manage the content and applications being deployed. “True enterprise mobility management requires a comprehensive approach that extends beyond device management to include mobile application, content and services management. That’s why we’re launching a comprehensive solution for enterprise mobility management here at CA World, and extending our existing solutions to support the mobile enterprise.”

CA will invest in SaaS delivery by product segment, with the ultimate goal of providing a suite of management and security functions delivered as a service, said Gregoire. “Ultimately, SaaS is a business model that enables us to provide better quality code faster, deliver continuous innovation, meet your needs more rapidly and accurately, and help you deliver better business results in a public cloud, private cloud or behind a customer’s firewall.”

After 8 years at Taleo, SaaS is something Gregoire has a lot of experience with. In an earnings briefing shortly after he joined CA, he said it’s not just a technology play, it’s a model play, which means it affects marketing, affects sales, it affects services, it effects partner channels. At Taleo they went through all of the growing pains of figuring out those models.

“When I take a look at CA, they started that evolution, but there’s things that I think I can bring to the table here that will accelerate that evolution so that we can get there faster with stronger products, with quicker releases and also have a customer relationship that is based upon the relationship a company has with a SaaS company, which is somewhat different than a perpetual license company.”

Big Data by itself is useless, said Gregoire. “Analytics will become the killer app for Big Data.” Which should be good news for CA and its customers because this is something we’ve been doing for years for some of the world’s largest companies, he said.

Gregoire joined CA in January after seven years leading Taleo Corp., a cloud-based talent management software company that was acquired in 2012 by Oracle for nearly $2 billion. Before that, he spent four years at PeopleSoft, Inc., as the executive vice president of its 4,000-strong services group, and 12 years at EDS Corp.

After just three weeks on the job, Gregoire explained to analysts’ at CA’s Q3 2013 results briefing why he joined the company. He said it had three core business fundamentals that provide the company with a clear advantage.

The first is addressable market. “The total addressable market is large enough and growing fast enough to support our aspirations… I think we have an opportunity to be the leader in a market that industry analysts expect to be more than $75 billion.”

The second is intellectual property. “CA knows more about managing heterogeneous IT environments, applications, data and identities than any other company… [has] more than 6,000 engineers… more than $600 million invested per year in organic innovation… more than 700 patents and close to another 800 under review… [and] much of this IP is focused on where the market is going and is of the utmost relevance. And we have key positions in markets like Mainframe; Application and Network Performance management; Identity and Access Management; Project and Portfolio and Service Management, as well as Service Virtualization.”

The third fundamental is distribution. “To get all of that technology to market, CA has a global distribution network that is difficult to replicate and I believe can be a big differentiator for the company. CA has relationships with the largest companies in the world. With the right focus on innovation and new markets, we can really increase our growth trajectory in our Enterprise Solutions business.”

Gregoire followed up the fundamentals with three early observations: the need to accelerate the company’s innovation curve; the need to improve cost of sales, its cadence for getting things done and the intensity in which it goes after its objectives; and finally, it has a great balance sheet and needs to use it prudently and as a competitive differentiator by making smart investments. His vision of what the company really needs to become is clear: a very strong software company that does great engineering and has fantastic customer relationships.

As for the financials, revenue was $1.2 billion, down 4% in constant currency and 5% as reported. In Mainframe Solutions, revenue was $622 million, down 8% in constant currency and 9% as reported. Enterprise Solutions revenue was $476 million, flat in constant currency and as reported. Services revenue was $97 million, down 5% in constant currency and 6% as reported.

DISCLAIMER: CA is not a client, but they did look after transportation and accommodations.

 

 

 

Author: Steve Wexler

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