CA’s BTCS2.0: Change Is The New Normal

SANTA CLARA, Calif.: Determined to be the leading toolmaker for the software-enabled, data-driven, digital transformation business phenomenon that is reshaping the world, CA Technologies held its second annual to update analysts and journalists on where it is, and where it wants to go. At last year’s BTCS the venerable software developer (1976) detailed how it was transitioning from a $4-billion legacy software giant with relatively flat sales into a more agile and fast-growing vendor for the the rapidly emerging DT world.

Fast-forward 11 months and the company reported quarterly and annual revenue increases to $1.083 billion and $4.235 billion, respectively, and is forecasting relatively flat growth for the next quarter. In addition to its financials, CA also announced it would be laying off 800 (out of 11,000 employees) in restructuring, and adding another 500-600 staff with ‘different skills’. The company needs fewer employees with skills related to “legacy platforms” and more with skills related to software as a service, said CEO Michael Gregoire.

While the company’s roots are in the , which is undergoing something of a renaissance, it is and more specifically DevSecOps where it’s future lies.Depending upon your source, is a flourishing market, especially in the enterprise. Forrester Research declared 2017 to be the year of with 50% of organizations implementing it, and 2018 will be the year of enterprise DevOps. ‘DevOps has reached “Escape Velocity”’, noted Principal Analyst Robert Stroud, with momentum occurring within all industry sectors but with healthcare, banking, insurance and manufacturing sectors leading the charge.

In addition to forecasting a global DevOps software market in excess of $5.6 billion by 2021, IDC offered some interesting predictions that should sit well with CA’s DevSecOps ambitions, including:

-cognitive computing, artificial intelligence, and machine learning will become the fastest growing segments of software development by the end of 2018; by 2021, 90% of organizations will be incorporating cognitive/AI and machine learning into new enterprise apps

-by 2019, over 70% of routine development-lifecycle tasks will be automated, supported by AI fed from existing data streams, with an agile DevOps pipeline driving and incubating lifecycle and application development intelligence;

-by 2021, over 50% of CIOs will have appointed heads of delivery; integrated their dev, PMO, and ops groups; reduced silos; expanded their DevOps practices; and implemented shift-left testing to accelerate innovation; and,

-development without integrated and compliance will fail; progressive orgs have prioritized due to uptime and compliance concerns, accelerating the need for agility and a curated OSS-dev portfolio. -led development will be a priority for 90% of orgs by 2020.

451 Research (together with security software testing vendor Synopsys) provided another key factoid for CA, reporting in late April that security in DevOps is lagging. “While some DevOps teams are starting to incorporate application security into their CI/CD workflows, driven by factors such as improved software quality, compliance, and risk avoidance, there is ample room for improvement,” said Jay Lyman, principal analyst at 451 Research. “In many cases, security testing is not being integrated often or early enough in the process for organizations to fully benefit from reduced risk and rework headaches.”

Testing as a DevOps weak point was also reinforced in several other sources:

-the number one barrier to agile success is company culture at odds with core agile values, according to the State of Agile Report;

-according to Gartner 70% of the IT market is focusing on DevOps and another study found that 88% of organizations have adopted agile, but only 26% of organizations have broadly adopted test automation; and,

-software testing, while often underappreciated, is arguably the most crucial step to get right with Agile and DevOps, with testing taking more than 50% percent of the development time, with a huge impact on delivery speed, as well as an even bigger impact on quality, risk, and compliance.

Securing DevOps took a big step forward at this year’s RSA conference. “This is the first time that it felt that DevSecOps was real,” said Derek Weeks, vice president of Sonatype, a software supply-chain automation company. “People are integrating security teams and security practices into their development pipelines, and they’re doing it on a scale that I haven’t seen before in previous years.”

While the DevSecOps is attractive, it’s the business revolution that is known as DT that holds the biggest opportunity. Spending on digital transformation technologies (hardware, software, and services) is expected to be nearly $1.3 trillion in 2018, an increase of 16.8% over 2017’s $1.1 trillion. Spending is expected to nearly double by 2021 to more than $2.1 trillion, with a compound annual growth rate (CAGR) of 17.9%.

The benefits of DT and its related technologies — cloud computing, Internet of Things (IoT), big data and analytics (BDA), mobility, social media and security — are staggering, i.e. a 33% increase in speed to market; 40% increase in customer satisfaction; 37% increase in new business revenue; an expected increase in annual revenues by an average of 2.9%; an expected reduction in costs by an average of 3.6%; while “first movers” ‘are far more likely to be forecasting both revenue gains of more than 30% and cost reduction of more than 30% at the same time’. To put it simply, DT is an extinction-level event — it’s ‘go digital or die’, and that’s an incredible opportunity for CA.

In other CA-related developments, CA’s CTO and EVP Otto Berkes said there is “massive potential” to apply machine learning and machine intelligence ‘so that, not only do you have business and development processes that you automate, they get better over time without you having to manually program them to get better.” In an interview just prior to 2 he said the company has some “very pragmatic solutions” already in the market, and is doing a “lot of experimentation” on machine learning and machine intelligence.

Also happening now is the news that that a key competitor, BMC Software ($2 billion annually), is being sold from one investment group to another. Terms weren’t announced, but the current owners — which include Bain Capital, Golden Gate Capital and Elliot Management — took the mainframe software vendor private in 2013 after shelling out $6.9 billion, and it is expected that KKK will be paying out close to $10 billion to complete the deal next quarter. The new owners are expected to push the company into areas where CA is focusing — DevOps and cloud — in addition to their existing rivalry in the mainframe space.

In next week’s issue I’ll look at where CA is heading, and some insights into how they plan on getting there, including more details on the announcements made at this week’s event: new solutions to ‘unleash untapped value’ of the mainframe, some IoT and GDPR (General Data Protection Regulation) initiatives and other innovations for the Modern Software Factory.

DISCLAIMER: In addition to being a shareholder of CA (and ), the company looked after my travel expenses.

Author: Steve Wexler

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