Can They Deliver?

The new management team leading the charge--CFO and COO Jeff Clarke, Executive Vice President Gary Quinn and Senior Vice President of Worldwide Channel Operations, Sales and Marketing George Kafkarkou--is raising the stakes with a pro-channel compensation plan that marks a dramatic break from the 28-year-old company's direct-sales past.

>> CA executives travel to Las Vegas this week for the company's annual partner conference, hoping solution providers will embrace their expansive new go-to-market strategy, the 'One' Partner Program

The new "One" Partner Program, which will be detailed at CA World, pays CA's 1,100-member direct-sales force a premium (115 percent of the net for CA goes toward the salesperson's quota) for every sale that goes through partners buying products from CA's two-tier distribution partners. The new compensation structure is part of an aggressive plan to bring more enterprise partners and systems integrators into the fold. To show just how serious it is, CA is also addressing a longtime partner complaint by putting Unicenter, its crown jewel product, into the channel.

"The channel is the most important objective for CA this year," said Clarke, who joined CA last month. "We do well direct, but the strategy is to broaden."

To say that CA is at a crossroads would be an understatement. The Islandia, N.Y.-based company has put in place a new chairman, interim CEO and top sales executive in the past several months and fired nine employees from its finance and legal staffs in the wake of a federal investigation. What's more, CA, under the leadership of interim CEO Ken Cron, is still searching for a permanent CEO to replace Sanjay Kumar, who stepped down last month to take a smaller role as chief software architect as the CA board moves to put the federal investigation behind the company.

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Quinn, a 19-year CA veteran who is overseeing the partner initiative, says the pro-channel compensation change once and for all provides the impetus to get CA's direct-sales force to work with partners.

"The CA culture has always been a direct culture," said Quinn, who has been tapped a number of times to make tough changes at CA. "It is in our DNA. But you have to evolve to survive. ... This is a very big point in the company's history to evolve the business. It means going from a direct company to a company now that is looking to use any route to market to get customers our solutions."

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Leading the channel charge at CA (l. to r.): Jeff Clarke, Gary Quinn and George Kafkarkou

To help bring new partners on board, Quinn is in the midst of hammering out deals to add several new enterprise distributors to its current roster of one, Arrow Electronics. At the recent Global Technology Distribution Council Summit, Quinn met with enterprise distributors and expects to have new companies engaged by the end of the summer. At the same time, he stressed that CA is moving to beef up its commitment to the thousands of solution providers it has partnered with in the small- and midsize-business segment.

Dave Hall, CTO of CompuCom Systems, a $1.5 billion solution provider based in Dallas, said he is pumped up by the CA compensation plan changes and the Unicenter initiative.

"This is exciting because it incents the direct-sales team to partner more closely with the channel," he said. "What it really does is build stronger relationships in the field,not just on selective products, but broadly across the entire solution set. It is definitely the right approach."

Partners say the changes will not only get the direct-sales force and channel partners to work side-by-side in customer deals, but will move the conversation upward from a point product, break-fix mentality to more of a consulting relationship geared for the long term. "We want to broaden our horizons," Quinn said. "We need to adapt to the channel's business model and find a way for the channel to better interface with us. We don't just want to sell 40 modules of Unicenter. We want to ask about the customer and how we can serve them."

Part of serving customers better, executives say, is giving all of CA's partners for the first time equal access to the formerly exclusive CA Smart certification program. The result? More channel input to leverage under an all-encompassing partner program umbrella.

On the technology front, CA is moving for the first time to provide access to certain product APIs to foster greater interoperability with third-party products. Under the plan, third-party vendors could tap into the data repository that sits at the hub of CA's effort. CA is also forging ahead with new product suites. In addition to expanded integration of CA's BrightStor storage management, eTrust security and Unicenter desktop migration technology into more manageable bundles designed for specific IT needs, CA will extend its product ecosystem down into the SMB market, said Mark Barrenechea, senior vice president of product development (see sidebar).

Linux also plays a role in CA's makeover. CA intends to support all of its flagship products on an open-source platform and plans to introduce a number of storage-related products this week. "We are taking commercial software from CA and tying it to open-source components [that] enhance its value and produce a higher value for the marketplace," said Sam Greenblatt, senior vice president and chief architect of CA's Linux Technology Group.

New software services, particularly in the security realm, will also drive CA's transformation, Barrenechea said. And though he declined to outline new products in detail, efforts by CA to leverage around-the-clock, automated security support plays favorably to the limited IT resources of SMBs. "We'll use our 24x7 content team that covers every software patch that comes out, and we'll do patch updating for customers," he said.

Customer support will be paramount, executives say, and CA will use a program called Self-Service Support to give customers and partners the freedom to log on to a portal and download antivirus software and patches and access other services online.

And there's more. To strengthen its channel partner network,and its service, product education and sales lead aspects,CA plans to recruit top channel partners to oversee specific market geographies. The company will also add as many as 200 new employees skilled in channel relations. Sales leads will help CA partners, its direct-sales team and telesales break into new accounts. The details of a CA deal-registration program are also being finalized.

CA's call centers in Tampa, Fla., Phoenix and Barcelona, Spain, are being revved up to drive multilingual telesales and lead inquires. These call centers have both dedicated telesales employees who query existing CA customers, as well as "tele-leads",employees who query new customers and prospects, said CA's Kafkarkou. In addition, each tele-lead call is done by specific discipline, be it storage, security and so on, he added.

Also being rolled out is an expanded system builder program to add incentives for bundling select editions of BrightStor, eTrust and Unicenter in custom systems.

Unveiled last week, the program enables white-box builders to either preinstall certain CA software, soft-bundle it with hardware for install later, or offer software as a separate download option on a 30- or 90-day trial basis. CA's eTrust Antivirus, BrightStor ARCserve Backup for Windows, BrightStor ARCserve Backup for Laptops and Desktops, Unicenter Desktop DNA, and consumer software products eTrust EZ Antivirus and eTrust EZ Armor are available for hard or soft bundling. Trial downloads are also available for eTrust EZ Antivirus and eTrust EZ Armor.

Even select consumer retailers will be given a certain percentage on yearly license renewals for CA products they sell, said Kafkarkou, who added that such retailers would be chosen on a case-by-case basis.

In all, the sweeping changes are designed to tackle the partner relationships Kafkarkou pointed to as needing "the greatest improvement." These are solution providers, VARs, OEMs, value-added distributors and system builders. Enterprise VARs capable of driving solutions around CA products are also a key target.

Upon hearing CA's channel ambitions, Mark Demeo, vice president of consulting at CA partner Pomeroy IT Solutions, Charlotte, N.C., said CA's plan to bundle product solutions and integrate more third-party technology gave CA no choice but to provide greater channel support to partners, particularly smaller partners that may not have someone on staff certified in every aspect of a more complex, multiple technology solution.

Courting the channel has come into fashion for many of CA's competitors as well. On the security front alone, Symantec and Network Associates are in the process of rolling out channel strategies similar to CA's in their quest to add partnering incentives, product integration and SMB options.

Still, VARs say they are concerned about the ongoing federal investigation into CA's past accounting practices. Embarking on an aggressive channel strategy while in search of a new CEO and seeking an end to the federal probe could dampen CA's sales efforts, said Michael Held, managing director of CenturionSoft, a CA partner in Marco Island, Fla. "The legal issues don't provide customers with a solid feel for CA," he said.

But the long-term performance of CA's channel strategy is what partners such as Brian Deeley, owner of Graymar Business Solutions, Timonium, Md., say they will use to judge CA's success. "So many vendors are going back to the channel, you have to ask why did they ever leave?" Deeley said. "From my vantage point, I'm looking after my customers, many of which I've had for over 10 years."

Kafkarkou said he wouldn't state exactly what percentage of CA's business will ultimately flow through the channel, but said: "Our view is that we cannot be successful in our corporate objectives and our corporate goals without having a continuing healthy channel partner business. ... We will continue to grow our market share at the expense of our competitors, and we cannot do that without the channel community."

CompuCom's Hall, who has watched CA's channel strategy improve significantly in the past year, is confident that CA can deliver on its channel cultural transformation. "They set the stage for their comeback last year," he said. "They delivered what they promised and now are strengthening the program. We are definitely happy with the changes."

STEVEN BURKE contributed to this story.