CA Inks Security Development Pact With India Outsourcing Giant

CA's newly formed threat management security unit has inked a strategic pact with India outsourcing giant HCL.

The deal effectively hands over all development, research and quality assurance of CA threat management security products to HCL. CA will retain sales and marketing responsibilities for the offerings. Among the products covered are CA anti-virus, anti-spyware, anti-spam, firewall, integrated threat manager (ITM), host-based intrusion prevention system (HIPS), and secure content manager (SCM).

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.

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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, he said, 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," said Kafkarkou. "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.

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 is determined to drive CA from the dead last No. 7 spot in the 2007 VARBusiness 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 the 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 live everyday to make our partners prefer us. We treasure the relationship with partners and look forward to stepping on the gas and making it even better for the partner community."

NEXT: What do CA Partners Think?

Todd O'Bert, president of Productive, a security, storage and infrastructure software solutions company based in Minneapolis, said he is 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. The fact that George is running the whole business top to bottom is awesome. 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, said O'Bert. 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 after proper installation of the CA products.

"That kind of classic marketing offering insurance protection if someone gets brought down by a virus is putting your money where your mouth is," said O'Bert. "That is the kind of stuff that builds trust in the marketplace. Kafkarkou is great at positioning products in the marketplace and he is great with partners. If you invest in him he'll invest in you."

O'Bert said he is confident he will double or triple his CA threat management security business next year from the current $1 million mark. "CA is creating an organization that is focused to succeed, adapt and adjust to the market," added O'Bert.

The three biggest CA work sites affected by the deal are U.S., Australia and India, said Kafkarkou. He said he expects all the details to be ironed in time for the job transfers to take place early in 2008 unless prohibited by local laws.

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."