Computer Associates 2004 Annual Report Download - page 34

Project 360°, a company-wide initiative designed to integrate development and marketing efforts and improve
communications, builds on our Software Development Methodology to further enhance our product life cycle. By driving
better teamwork among departments, we believe we can deliver innovative, customer-focused software products to
market faster than ever before.
Product Development
We continue to invest extensively in product development and enhancements. We anticipate that we will continue
to adapt our software products to the rapid changes in the computer industry and will continue to enhance our products to
help them remain compatible with hardware changes. We expect that we will continue to be able to improve our software
products to work with the latest hardware platforms and operating systems.
We have several programs designed to involve customers throughout our software product development process. The
Development Buddy™Program gives customers direct access to our development resources and provides us with feedback
to help produce new software products. Our beta software program involves delivery of new software products to selected
customers for testing before we make the products generally available. Our Product Advisory Council of experienced IT
professionals acts as an independent adviser for software design and development. We also work with approximately
250 recognized worldwide user groups, comprised of licensed customers, who actively communicate with each other
and with us about our software products. Each of these programs provides us with valuable information that we use to
develop and enhance our software products.
We also pursue “next-generation” technologies that we believe our customers need to enhance their businesses. Our
research and development efforts, across all of our product areas, include emerging technologies such as:
•Linux — We continue to support all enterprise software product technology platforms available to our customers,
including the Linux operating system. Linux is a UNIX-compatible operating system developed by volunteers on the
Internet and distributed freely in electronic form. We offer Linux-based software across all of our solution areas for
distributed (desktop or server environment) and mainframe computing systems.
•Wireless — We have extended our software products to help customers manage, secure, and provide information
access throughout a wireless environment. Our products are designed to help customers integrate enterprise
management capabilities, secure wireless networks, increase performance and productivity, and improve service levels.
•Web services — Web services allow communication over the Internet regardless of the operating system or
programming language. Our software products are designed to help customers build, manage, secure, and
integrate Web services into their computing systems.
In the United States, product development is primarily performed at our facilities in San Diego, California; Lisle, Illinois;
Framingham, Massachusetts; Mount Laurel, New Jersey; Princeton, New Jersey; Islandia, New York; Pittsburgh,
Pennsylvania; Plano, Texas; and Herndon, Virginia. Internationally, we also perform product development in Australia,
China, France, Germany, India, Israel, Japan, and the United Kingdom.
Some of our software products were acquired from other companies and individuals. We continually seek to complement
and improve our software portfolio through acquisitions and strategic partnerships. The purchase price of acquired software
products (purchased software) is capitalized and amortized over the estimated useful life of such products over a period
not exceeding seven years.
Proprietary Rights
Certain aspects of our products and technology are proprietary. We rely on U.S. and foreign intellectual property laws,
including patent, copyright, trademark, and trade secret laws to protect our proprietary rights. As of March 31, 2004, we
have received 280 patents worldwide and have more than 1,345 patent applications pending worldwide for our software
technology. However, the extent and duration given to different types of intellectual property rights vary under different
countries’ legal systems, and in certain countries, full-scale intellectual property protection for our products and technology
may be unavailable, or the laws of these other jurisdictions may not protect our proprietary technology rights to the same
extent as the laws of the United States. We also maintain contractual restrictions in our agreements with customers,
employees, and others to protect our intellectual property rights. In addition, we license software and technology from
third parties, including some competitors, and incorporate them into our own software products.
The source code for our products is protected both as a trade secret and as a copyrighted work. Some of our customers
are beneficiaries of a source code escrow arrangement that enables the customer to obtain a contingent, future-limited
right to access our source code. If our source code is accessed, the likelihood of misappropriation or other misuse of our
intellectual property may increase.
CA 2004 FORM 10-K | PAGE 6