The Resurgence of CA

outsourcing intrusion prevention

Under the terms of the pact, 370 CA employees, including developers, quality assurance and technical support, will be transferred to India-based HCL's balance sheet. The employees, however, will not have to move to India. CA would not break out the annual savings from the deal, which is expected to be finalized by the end of the year. The final terms of the deal remain to be worked out.

The deal, however, does include an unusual provision that ties the annual payout to HCL to revenue growth at the $100-million-plus CA threat management business organization, which was formed only a month ago. The new unit is headed by 26-year CA veteran and former CA Channel Chief George Kafkarkou, who is widely respected by CA partners for his proactive channel commitment and ability to establish tight solution provider relationships.

Kafkarkou, senior vice president and general manager of the threat management business, said it would be foolhardy to view the HCL pact as an outsourcing deal. Rather, it represents a new aggressive investment to drive market-share gains for CA and its security channel partners.

"The way our partner HCL makes money is based on our revenues," Kafkarkou said. "HCL has as much skin in the game as we do. That is why this is a win-win. This is not an outsourcing deal. This is a strategic relationship." He characterized the deal as a breakthrough in the industry where such pacts are usually driven by a cost-cutting mentality.

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Next: The Future Of The Threat Management Business Unit Up until the creation of the new threat management business unit, CA had never established an organization that had sales and marketing control all under one umbrella with a product business. Instead, CA has traditionally relegated sales and marketing to an overlay organization that included CA's direct sales organization. One reason for the breakthrough: As much as 99 percent of sales from the new threat management group goes through the channel.

Kafkarkou said he's determined to drive CA from the dead-last No. 7 spot on CRN sister publication VARBusiness' 2007 Annual Report Card ranking of security companies to the top of the list. He noted that it was only three years earlier that CA achieved the top ranking in VARBusiness' Annual Report Card ranking. "It hasn't missed me that we were No. 7 out of seven," he said. "Partners know what I stand for and what CA stands for. We are going to fix that. We treasure the relationship with partners and look forward to stepping on the gas and making it even better for the partner community."

Todd O'Bert, president of Productive, a security, storage and infrastructure software solutions company based in Minneapolis, said he's excited about Kafkarkou taking the reins at the security threat management group and the pact with HCL. He said the deal marks a new sharper focus at the business unit. "George is very entrepreneurial," O'Bert said. "To me, as an entrepreneur, he is speaking my language. And the fact that he can tie product development to the revenue of that division makes me very excited, because now development interests are aligned with developing products that customers want to buy and resellers want to sell."

The strategic alliance creates more of a "pragmatic development environment" rather than one where "cool" features are added for technology for technology's sake, O'Bert said. Kafkarkou takes the helm at the new security threat management business unit after driving a turnaround of sorts at CA's consumer business, which is primarily made up of security products. During his tenure at the consumer unit, Kafkarkou improved the look and feel of the products and added much-needed marketing pizzazz, including a $10,000 payment guarantee in the event of an identity theft occurrence or hardware damage caused by a virus. "That's the kind of stuff that builds trust in the marketplace," O'Bert said.

The three biggest CA work sites affected by the deal are U.S., Australia and India, Kafkarkou said. For Kafkarkou, the deal represents a chance for a security channel partner resurgence that will show up in market-share gains and higher partner satisfaction scores for CA. "We are back!" he exclaimed. "We are back for our partners."