With a tough, evolving marketplace and big-buck IT contracts dwindling, replaced by smaller, more frequent, projects, CSC is in a make-it-or-break-it moment, where it is looking to focus on agility and innovation to push it further into the enterprise, CSC CTO Dan Hushon said in an interview with CRN.
CSC has been shrinking as a business, Hushon said, pointing out declining revenue numbers. At the end of January, CSC announced third-quarter net income of $141 million, a drop of 71 percent over the third quarter the year before. Revenue for the quarter was $3.23 billion, a drop of almost 9 percent over the third quarter the year before.
"We've been shrinking as a business -- look at our revenue numbers -- we've been shrinking," Hushon said.
"We, from the CSC perspective, have to recognize that those large billion-dollar projects are much fewer and further between," Hushon continued. "We need to figure out how we begin to contract in this new agile landscape. I think from our spending, we need to bring our organization forward in the marketplace in new and differentiated ways. We need to show how we can contribute to agility. We need to show how we contribute to innovation, and we need to reorganize the partnerships we have in the landscape to do that."
And that means and all-in approach going forward, Hushon said, adapting into what he called a "growth mode business."
"We're going to push it really hard ... I call it a Janis Joplin moment, when you've got nothing left to lose, and I really think that that statement, of having nothing left to lose, is really fitting here," Hushon said. "If we're really all in the boat around bringing innovation forward to our customers, and we pull the airbrakes off all of the work we've been doing before."
That means finding new partnerships and clients and transforming old ones into a more innovative model, he said. Just last month, CSC announced a new partnership with Amazon Web Services, despite traditional partnerships with Microsoft and VMware for cloud, because it was what customers were asking for, he said. Ultimately, it comes down to being a "true partner" to enterprises, he said, even if that means turning away from the channel.
"It's a difference of being a channel and a reseller and being a forward strategic business partner for this company. That's kind of the rescoping of some of the partnerships," Hushon said. "That works against us from an IT outsourcing business, which is a really large piece of our portfolio, and actually shifts some of the infrastructure demand into other channels. But it's what our customers are asking us for," he continued.
Other investments, such as CSC's October acquisition of enterprise cloud management company ServiceMesh, have driven "hyper demand," Hushon said. That acquisition, in particular, allows for agility and for CSC to bring forward scalable enterprise architecture standards to the developer community.
"I think the investments we've made in our portfolio to allow ourselves to innovate and bring us new agility ... we're going to be translating these conversations into a lot of really new and interesting customers for our enterprises, and we're bringing better business and technology together as you put this common message to the marketplace," Hushon said. "I think that’s going to hopefully translate to better sales in really interesting ways."
CSC is still partway through the transition, Hushon said, but it is having the conversation with all of its clients, whether they are new to CSC or older customers looking to engage in a different way. While it is still a "balanced approach" to its customers, Hushon said, due to long-term obligations, even some of those are changing. Hushon said CSC is working to proactively renegotiate some of those long-term contracts to put a larger focus on innovation.
"Innovation is really going to be the word in the next two or three years, and so we need to get the right processes in place that allow us to innovate with agility because in this marketplace, nobody knows quite where to go and so the quick answer is fail fast," Hushon said. "Hopefully fail never, but if you do, fail fast. It's going to be a lot of trial and error."
PUBLISHED FEB. 24, 2014