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"I think Charles is brilliant,
by theway. He's done a brilliant job at Computer Associates." --Larry Ellison, chairman, chief executive, Oracle
Charles Wang was 32 years old when he started
something akin to a boiler-room operation that would later become the country's
second-largest software-only company.
His straight talking has won him friends, admirers and enemies.
HOW LONG AT
COMPANY: 1976-present
BORN:
Aug. 19, 1944
EDUCATION: B.S., Queens College
ACCOMPLISHMENT
Built CA from scratch into a $4.7 billion maker
of systems management software
Working with a skeleton crew, and out of a tiny office, Wang went to work at
Computer Associates in 1976 trying to sell a piece of software, CA-SORT, to
companies running IBM mainframes. CA-SORT did just that--it sorted mainframe
data in a way that made the big, lumbering IBM boxes run faster. Unlike IBM,
with its blue-suited sales force, Wang and only several colleagues cold-called
one company after another, pitching their software. To fund themselves in the
early days, Wang eschewed traditional bank lending or financing.
"We'd get an offer for a new credit card in the mail," Wang recalled. "We'd say,
'Great! What's the limit?' And we got by that way."
Wang's first year in business with CA netted the company a profit of $5,000. For
its 1998 fiscal year, it saw a profit of $1.2 billion on sales of $4.7
billion.
The story of Charles Wang--a straight-talking, "call-me-Charles" head of a
software industry mainstay--is much different than others who have come and gone
from the computer industry.
Although the CA time line shows Wang founded the company in 1976, he actually
bought into the company in 1974 when he purchased a 50 percent share of the U.S.
sales rights from an overseas software company, Computer Associates
International Inc., when he was 30 years old.
At the time, he had been working as a vice president of sales at Standard Data
Corp. Before that, he broke into the world of computer programming at Columbia
University's Riverside Research Institute.
But while Wang likes to brag about CA's own internal software development, the
company has earned the reputation as a buyer. Under his leadership, CA has made
more than 20 significant acquisitions of other companies, has rejected many
others and been spurned earlier this year when it tried to take over Computer
Sciences Corp., El Segundo, Calif.
He has drawn criticism from some and rave reviews from others for that strategy.
For example, during a recent public appearance in Orlando, Fla., Oracle Corp.
Chairman Larry Ellison pointed out what he believes is one major sign that a
software company is struggling. "They start writing checks instead of software,"
said Ellison, a co-inductee into the CRN Industry Hall of Fame. After a pause,
he mentioned there was one exception to the rule. "I think Charles is brilliant,
by the way," Ellison said. "He's done a brilliant job at Computer
Associates."
Under Wang's leadership, CA's acquisitions have included Legent Corp., a $2.1
billion deal that caused headlines when the U.S. Department of Justice initially
balked on antitrust grounds; Cheyenne Software Inc.; and UCCEL Corp., in which
Wang found his current top lieutenant, CA Chief Operating Officer Sanjay
Kumar.
Wang and Kumar are now somewhat of a mutual admiration society, with each
crediting the other for strong operational skills, leadership and a no-nonsense
approach. When they are both at CA's Islandia, N.Y., headquarters, they have
lunch together. That may be a good way for the two to communicate, since Wang
has never had an E-mail account.
And it took Wang's communications skills four years ago to convince CA's
direct-sales force to take a novel approach to selling CA software such as
Unicenter, Open-Ingres and Jasmine.
"I needed to prime the pump," Wang said. He gave them cash incentives to begin
selling through resellers--a critical moment in CA's survival. The move came as
Wang was attempting to move CA to distributed client/server systems, where the
channel had long been established, from selling most of its software on
mainframe platforms.
"We were 18 years into CA's existence at the time," said Mark Marron, CA's
senior vice president of channels, now based in Europe, and the company's first
top channel executive. "Charles had a good feel for the market, and where it was
going, and where we needed to go as an organization. By bringing in a third
party, you had that unknown variable that you needed to manage."
As CA was getting its channel programs up and running--a shocker for some
longtime CA watchers accustomed to the sales force Wang had built up--its
presence was making some of the biggest players in the industry take notice.
Microsoft Corp. and its chairman, Bill Gates, entered into a strategic alliance
with CA. So did Sun Microsystems Inc. and Ellison's Oracle. IBM, which had
half-heartedly competed with CA in past years, took a bold step. It paid more
than $750 million for Tivoli Systems Inc. and, essentially, declared war on
Wang's company.
Despite the new competition, CA's sales and profits continue to grow at 20
percent annually and, despite a drop earlier this year like many other high-tech
stocks, shares of CA continue to earn strong paybacks for investors. A $100
investment in CA in 1993 was worth $829 earlier this year, and Wang has been
compensated well: He was the highest-paid industry executive for several years
running, until 1998, according to CRN's annual Salary Survey. For fiscal 1998,
with salary, bonuses and awards, Wang earned $16 million.
One consultant, who assisted Wang and Computer Associates with one delicate and
major takeover several years ago, but who also has worked for competitors of CA,
said he walked over to Wang to say "hi" during a trade show and Wang started to
pick his brains.
"He told me, 'I only have a few minutes,' and he proceeded to ask me the most
direct, blunt questions," he said. "We finished the conversation in the men's
room and he didn't miss a beat."
Says Wang: "I don't believe in beating around the bush."
And that, he said, is one of the single biggest traits he would like his three
children--including a grown son and daughter and 3-year-old daughter--to keep:
candor.
So is the kid whose family fled China when he was a boy, and who grew up in
middle-class Queens in awe, in any way, when he drives up to CA's massive
headquarters complex off the Long Island Expressway--knowing that he built the
company with his own hands?
"No," he said. "I'm just doing a job here."
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