CA: A Lot Of Activity, Not Much Movement
LAS VEGAS: At last year’s event, in front of 4,000 customers, CA Technologies said it was tooling up for the application economy; before 5,000 customers — including 45% new customers — at CA World ’15, the company said the digital/application/API economy is here, and now it’s just a case of getting the laggards, i.e. the overwhelming majority, up to speed.
However, while CA retools for the digital economy, it doesn’t look like the digital economy is buying in at a fast-enough pace. For its most recent quarter (2QFY16, which ended September 30), the company reported $1.005 billion in revenues, with new sales up more than 40% year-over-year. That’s the good news; the bad news is that every major metric, including revenues and profits, were down YoY, and the outlook for the rest of the year is lukewarm.
From a product perspective, the mainframe is CA’s heritage, and still a strong contributor to its bottom line (over 50% of revenue), which should continue to be so for the foreseeable. After refreshing its Z Series, IBM’s revenues in the $250k-plus server segment shot up 66.1% in Q1. “People say the mainframe is dead,” said Vernon Turner, an analyst at IDC, “but we say, hmmm, that’s a $4.5 billion tombstone.”
According to IBM:
-more than 70% of enterprise data resides on a mainframe;
-71% of all Fortune 500 companies have their core businesses on a mainframe;
-92 of the top 100 banks use the mainframe;
-23 of the world’s top 25 retailers use the mainframe;
-10 out of 10 of the top insurers use the cloud on the mainframe; and,
-more than 225 state and local governments worldwide rely on a mainframe.
Identity-centric security is another core focus of CA, which was given a helping hand recently with the acquisition of Xceedium. The good news for CA is that security is broken, breaches are climbing and insiders are to blame for the majority of the problems.
Mordecai (Mo) Rosen, CA Technologies VP, Product Management and Strategy for Privileged Access Management, used the military term adopted by infosec, killchain, to describe the three-step process in cyber attacks: obtain access; elevate privilege; and wreak havoc. The industry’s traditional perimeter approach is largely to blame, he added.
“A tech refresh has to happen in security.” For most of the last 30 years, it’s been a case of building a perimeter and then letting everybody in. “Identity management… has to become an enormous priority”.
One area undergoing a change in direction is data center infrastructure management (DCIM). Rated as a leading vendor in this category just a year ago, the company has announced it will no longer sell its standalone solution, CA DCIM. The company plans to focus on end-to-end IT infrastructure monitoring, including network, middleware, databases and applications.
CA has been working on the next stage of DCIM, what 451 Research calls datacenter service optimization or DCSO. Last October Analyst Rhonda Ascierto noted that CA wanted to take DCIM higher by combining it with other management tools.
‘We and others believe this type of DCSO approach will become increasingly common for end-to-end datacenter service management, including costing and best-execution management. CA is developing these and other converged capabilities and interfaces as part of a substantial, multi-year investment. It is a strategy that is ahead of the market. CA could be early with an integrated DCIM-ITSM tool, but it is not likely to be alone.’
There is a lot to be positive about at CA, and CA World 2015 will showcase some of those developments. However, while this is an increasingly app-driven world, it’s also a quarterly results-driven world and it remains to be seen who will win if its comes to a showdown between the two forces.
DISCLAIMER: CA looked after airfare and hotel.