Computer Associates Board member Ken Cron, who stepped down as interim CA CEO this week and handed over the reins to former IBM software executive John Swainson, spoke with CRN Editor News Steven Burke about the progress CA has made since he took the interim CEO post 10 months ago and other issues. Below are excerpts from the interview.
CRN: Talk about the state of CA when you took the job and the state of CA now?
Cron:: I think that CA has obviously gone through a challenging period. It is a testimony when you look at the results over the past year, a testimony to the employees, the board of directors, and to the management team. With this challenging period, the company was actually able to improve results to post three solid quarters, make two strategic acquisitions in the form of PestPatrol and Netegrity to stregthen our leadership in security. In addition to that we brought in a whole new management team.
When you really draw a whole picture what you see is a whole new management team is in place and then you top that off with the announcement that John [Swainson] is now the leader of this team as CEO then you see that that the company is poised for success. Those were just some of the accomplishments.
Last but not least there is the resolution of the government issue (a $225 million settlement with shareholders to avoid criminal prosecution). That was a significant change in terms of moving the company ahead and one of the first things that got accomplished. The most formative issue with that was to replace uncertainty for investors and customers ad employees with certainty. With the government resolution the company was able to then start quickly moving ahead and that was when you saw the new management team starting to grow, the acquisitions come on stream, and the solid results as an advent of customers saying now we are comfortable making the investments in CA technology. When you look back what could have been a challenging year leading to major challenges. It turned out to be a year where there was significant accomplishments and solid results. I think everybody feels just great and the employees and all the people on the management team should feel absolutely great about themselves.
CRN: What is the status of the channel effort at CA? Has there been any progress made?
Cron:: One of the things that is certainly true is that the channel area has been of real focus and tremendous investment for the company. [CA COO] Jeff Clark coming on board had tremendous experience with HP and Compaq with the channel. John Swainson in his years at IBM has been a tremendous supporter and grower of the channel. You know my background in the channel as well (Cron was a former top executive of CMP Media, which publishes CRN). in the channel as well. So you have some people that understand building channel is important at CA which is a company that has been predominately a direct sales organization. Almost 90 percent of our sales is direct, but the opportunity to take that 10 percent and really start to grow it in a much more balanced approach which our competitors are. It is a unique opportunity in front of CA. It will take time. It will certainly take investment and will take continued development of specific product sets to meet some of the partner's expectations. That is the focus and the investment and the energy behind making the investment that the channel is going to be a big part of CA's business. We have our enterprise solution provider program and a number of programs under Partner One that are continuing to be funded and grow. I expect that John will make this one of the areas of his focus.
CRN: Is the Board of Directors behind that channel push?
Cron:: There is no doubt about that. I spoke today about that. The support for the channel is throughout management team up to and including the board of directors as well.
CRN: What is biggest challenge the company faces at this point from the board of director's perspective?
Cron:: The board's responsibility is to always grow shareholder value. I think the board has done a tremendous job of being decisive in what was a challenging period. The challenges now are opportunity based so the board will work closely with management to make sure we take full advantage of the opportunities the industry affords us and to do that to grow shareholder value.
CRN: Talk about how this company is positioned vis-a-vis IBM and Hewlett-Packard?
Cron:: John has a great depth of knowledge and experience in the product and technical areas. But in addition to that over the last couple of months I have got an opportunity to work closely with John and see that he has both strategic and tactical strengths and he is able to really paint a vision for the company and that vision is what is going to carry the company forward. Competitively CA is in the same genre as IBM and HP as it relates to management software.
Our leadership in management software and our Enterprise Infrastructure Management software position and our leadership there is where we are going to be focusing. The core areas in systems and network operations, storage, lifecycle management and security are going to be the areas we continue to focus on. Managing infrastructure is really what we do best. I think we have a suite that is second to none. We will be competing in that marketplace with the likes of IBM and HP and I think strategically we are well positioned for the future.
CRN: What do you see in terms of the product strategy going forward?
Cron:: John is big believer in product business units. You have seen that with some of recent reorgs and moves that he has made. With regard to specific product and technical decisions I am going to let John play that out. That is really what he is working on now and spending obviously a great deal of time on as he take a look strategically at our portfolio.
CRN: What is biggest sales obstacle for the direct sales force and the channel as you try to grow sales?
Cron:: I think the biggest customers recognize how valuable CA's software is. CA's software is to use the term sticky is correct. It is very sticky software. It allows I think the company to really infuse its software into an organization and become fundamental to its success. I think the solutions we provide for the channel and the reseller community can do the same as we work to build that channel out so that solution providers can meet the needs of both large enterprises, medium and smaller enterprises developing the same types of management solutions that larger companies have and deliver that through the channel. To me more of it is opportunity based than challenges. We have an opportunity to really be very aggressive in delivering CA solutions. I think customers are responding to the new CA in terms of our strength and activity. I think channel partners feel that momentum as well.
CRN: What do you think of Carly Fiorina's departure at HP?
Cron:: I am really not going to comment on Carly's departure.
CRN: How difficult is it to be a board member in this environment?
Cron:: Great boards of directors have always been great boards of directors. They continue to really help management increase value for shareholders. Sarbanes [Oxley] adds layers to that. But I think ultimately the charter for boards has not changed. CA's board is committed to doing that.