Computer Associates CEO John Swainson, who officially took the helm at the enterprise software giant in February, spoke with CMP Media editors including CRN Editor Heather Clancy and CRN Editor/News Steven Burke about CA's channel strategy, competing in the security-storage market against Symantec-Veritas, EMC, managed services and the company's acquisition Monday of message archiving compliance software maker iLumin. Below are excerpts.
CRN: Talk about the Symantec-Veritas merger and how it has affected the channel and the dynamics of the market.
SWAINSON: I don't see much impact frankly upon us from that. They seem to be pretty consumed with the intramurals that go on inside any corporation when you take two large companies and smash them together. I am reminded obviously of Compaq-Hewlett Packard and others. We don't see much market impact except in the following way. As Symantec-Veritas goes out with the story about why it is important to integrate security and management together, they actually serve to validate some of the things we have been saying in the marketplace for a long time and that is that security and systems management are actually two sides of the same coin. Unlike Symantec-Veritas, who actually don’t have any products really in the systems management space, they threat protection to keep the bad guys out and they have storage stuff, and reorganize data. They don't actually have any of the pieces in the middle that would allow you to effectively create end-to-end infrastructure management. We actually have all those pieces. The ironic part of their going out and talking about it is that it is creating demand for us or at least validating the category.
CRN: What are you doing to compete with Symantec-Veritas?
SWAINSON: The irony is we are not trying to compete with Symantec in their key areas. We have a threat management product and we think it is very good. We have antivirus and antispyware and it is a growing market and we will continue to participate in it. Our focus in security is around the management of people, identity access, the permissions they have, the federation of those roles and the tie back into security of the whole system. And that ties back into how you manage the assets, network assets, storage assets as well as physical assets. The areas that we are focused on are areas they kind of ignore.
CRN: Who do you worry about as competitors?
SWAINSON: Hewlett-Packard certainly competes with us in the network management space and the server management space. So I worry about them. I worry about IBM. They probably apart from CA have the broadest offering of products with the Tivoli brand. I worry about EMC. I worry about everybody. I worry about all these guys first of all because I think it is very important to understand what your competitors are doing and also because some of them are also good at telling a compelling story. I would be the first to tell you that a good story is only half the battle. Eventually you have to make a good story work. Customers are not just interested in a good story. They are interested in someone who can come in and show them a solution that works in their environment that solves their business problems. So the era of marketechture and gloss and glitter is sort of over particularly in the management space.
CRN: A lot of our readers are becoming a managed service provider of some sort. How do you see that community coming out and using your tools and what is CA doing to provide licensing that makes sense for them?
SWAINSON: Our top 10 customers are all managed service providers whether it is CSC, EDS, IBM Global Services, ADP. This is the business we are in essentially. We are in the business of providing tools to help people run IT departments and the people who care most about running IT departments efficiently are people who do it for a living. Those tend to be our biggest and most advanced users. You are quite right there is a trend in the marketplace toward more provisioning of software as a service and applications as a service. Our goal is to be a software provider to those people to help them manage those infrastructures securely with a high degree of compliance. It is not to be a provider of that service ourself. This is very big difference between us and some of our competitors frankly, The lines have gotten very blurred about whether they are in their customer's business. We are not in our customer's business. We are a pure software development, sales and marketing shop. Our customers are people who either do this for themselves or provide this as a service for others.
CRN: Talk about the iLumin acquisition and how it will impact channel partners?
SWAINSON: iLumin was interesting to us because it was at the intersection of our core products. It was something that was very relevant from a market point of view. And was very additive frankly to each of our portfolios particularly to our BrightStor portfolio. If you look at the storage market generally and see the amount of Tbyte shipped going up this year by I think 60 percent. The market as it continues to grow is commoditizing some of the base technologies and we needed to find a way of adding more value than our traditional backup and recovery business. We have almost a $500 million business in storage most of it is backup and recovery. We recognize the need to provide things like continuous data protection, various levels of quality of service related to the storage and recovery of information, and almost a special case of that has become the email archiving market where things like Sarbannes [Oxley] and NYSE rules now require people to retain document emails.
iLumin's customers today have primarily been large enterprises. We expect that to continue, but we are also looking at opportunities to take this into our channels where we sell a great amount of storage software with our ARCServe brand. We think this is a natural addition and we will be looking for opportunities to find ways to make this channel friendly so that we can bring our channel partners this additional capability.
CRN: Right now 10 percent of CA's sales go through the channel. How do you see that developing?
SWAINSON: Your overall characterization of 10 percent of the [sales] volume we ship through channels is about 10 percent. It is a little different in storage. In storage we have about one third of that business on the mainframe and two thirds of it distributed and of the distributed part almost half of that goes through the channel. So it is a quite heavily channel distributed set of product particularly in Asia.
CRN: What is your message to CA partners who are comparing the company's product and channel strategy to Symantec-Veritas and EMC.
SWAINSON: I think we have a very different offering. EMC is essentially all about storage and secure management of storage devices. Symantec-Veritas is all about threat management and tying that into obviously storage management as well. Both of those are important but not nearly sufficient. There is this whole area of how do you manage people and security is really all about managing people, their identity and what they have access to. There is the whole area of how do you manage the physical assets themselves in case you get hit with a hammer. And there is the whole area of managing the applications. None of our competitors do any of those things. We are the only person in the industry who has sort of an end-to-end strategy on that stuff. Our message to our partners is one of completeness, one of choice. We don’t expect everyone to use everything from us. Our architecture is modular enough so they don’t have to. But we provide them with the most complete road map of product in the industry frankly that is designed to be partner friendly both in terms of the way it is priced and in terms of way it is delivered to the marketplace, and in terms of our business model of not being a competitor. That is what it is all about. It is not a message that appeals to everybody. If you are a guy who goes after very small business, this is probably overkill. On the other hand if your customers are midsize and larger companies then I believe you have it all: management, security and simplification. I think for those people this will be a very compelling offering.