CA Technologies

CA Technologies
Type Public company
Traded as NASDAQ: CA
NASDAQ-100 Component
S&P 500 Component
Industry Enterprise software
IT services
Founded 1976
Founder(s) Charles Wang
Russ Artzt
Headquarters Islandia, New York, U.S.
Key people Arthur F. Weinbach (Chairman)
William McCracken (CEO)
Products Computer software
Revenue US$ 5.082 billion (FY 2011)[1]
Operating income US$ 1.57 billion (FY 2011)[1]
Net income US$ 870 million (FY 2011)[1]
Total assets US$ 12.838 billion (FY 2011)[1]
Total equity US$ 5.312 billion (FY 2011)[1]
Employees 13,800 (March 2011)
Website CA.com

CA Technologies (NASDAQ: CA), formerly CA, Inc. and Computer Associates, Inc., is a Fortune 500 company and one of the largest independent software corporations in the world.[2] Headquartered in Islandia, New York, the company supports software which runs in mainframe, distributed, virtualized and cloud environments and which a majority of the Forbes Global 2000 has installed. In 2010, CA Technologies announced its cloud computing management strategy at its CA World user conference, and its new CA Cloud-Connected Management Suite of products that address the emerging challenges presented by the cloud.

Although the company sells anti-virus and internet security programs for consumer personal computers, it is primarily known for its mainframe computer and distributed computing applications and solutions used by businesses with CA Technologies claiming that its software is used by a majority of the Forbes Global 2000 companies.[3]

CA Technologies, which posted $4.4 billion US$ in revenue for fiscal year 2010 (ending March 31, 2010),[4] maintains 150 offices in more than 45 countries.[5] The company employs 13,200 people (March 31, 2010),[4] including 5900 engineers.[4] CA holds more than 400 patents worldwide, and more than 700 patent applications are pending.[4]

In 2010 the company acquired eight companies to support its cloud strategy including: 3Tera,[6] Nimsoft,[7] NetQoS,[8] Oblicore,[9] Cassatt,[10] 4Base Technology,[11] Arcot Systems,[12] and Hyperformix.[13][14]

On October 22, 2010, the company was ranked among the greenest companies by Newsweek magazine’s Green rankings.[15]

On January 28, 2010, CA Technologies announced that William E. McCracken would be its chairman of the board and chief executive officer.[16]

On May 6, 2010 Arthur F. Weinbach was appointed as Non-Executive Chairman.

Contents

History

See also: Charles Wang and Russell Artzt

Sources:[17][18]

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.[19] (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 (mostly on the DOS/VSE platform), 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 Corporation (flagship products UCC-1, UCC-7, UCC-11) made CA the largest independent vendor of mainframe infrastructure software and dominant vendor of OS/MVS security software with CA-Top Secret and CA-ACF2. It also made Walter Haefner, who was half-owner of Uccel at the time, its largest individual shareholder, a distinction he still enjoys.[20]

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 after Microsoft 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.[21] 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 CEO, John Swainson, plus new appointments to the positions 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. On September 1, 2009, CA announced CEO John Swainson's decision to retire by December 31, 2009.[22]

During this time, the company presented its Enterprise IT Management (EITM) vision to unify and simplify enterprise-wide IT[23] 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.[24] CA changed its name from Computer Associates Inc. to CA Inc. in 2006 and to CA Technologies in 2010.[25] Most recently, the company announced its support for Lean IT through an announcement of 13 new and enhanced EITM products.[26]

2010s

CA Technologies embraced the Cloud Strategy by launching the unique concept of IT Supply Chain, allowing a company to manage and secure dynamically both physical and virtual environments and to deliver more flexible IT services.

In 2011 CA sold its antivirus properties to Updata Partners, which spun the division off as 'Total Defense'.[27]

Software products

CA offers software products and services for distributed computing, mainframe environments, as well as virtualization and cloud. The portfolio spans the following product categories:[28]

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.[29] 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.[30]

CA Services

CA Services is a services organization within CA Technologies employing over 1200 consultants.

With a presence in over 25 countries, CA Services works with businesses of all sizes to develop implementation, technology roadmap, and education plan. The organization posted US$280M in revenue for fiscal year 2010 (ending March 31, 2010).

CA Labs

CA Labs was established in 2005 to strengthen relationships between research communities and CA. CA Labs has been working closely with universities, professional associations and government on various projects that relate to CA products, technologies and methodologies. The results of these projects vary from research publications, to best practices, to new directions for products.

Through a variety of University Relations programs, CA is working with many universities to enable and promote innovation—including funding university research projects in specific areas, working with faculty to enhance curriculum, and providing opportunities to interact with CA research and development experts.

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.[31] The companies reached a settlement in 1996.[17][18] 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.[32]

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[33]) 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.[18][34]

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.[35] 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 pleaded guilty to fraud charges – most notably, former CEO and chairman Sanjay Kumar, who received a 12-year prison sentence for orchestrating the scandal.[36] The company subsequently made sweeping changes through virtually all of its senior leadership positions.[17]

Acquisitions

Main article: List of acquisitions by CA Technologies

CA has a long history of acquisitions in the software industry.[18]

See also


References

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