Computer Associates 2006 Annual Report Download - page 19

It became clear to me that CA needed to narrow its
focus, and concentrate on providing its customers with
the best possible software products to manage and
secure their heterogeneous software environments.
Another important thing we learned from our cus-
tomers was that they were having real problems
creating an integrated management infrastructure;
no one in the industry was providing them with a
complete solution. In November of 2005, CA unveiled
our Enterprise Information Technology Management
(EITM) vision, with the goal of helping enterprises
manage and secure their IT environments. Based
upon our 30-year heritage as the software industry’s
leading independent management and security com-
pany, EITM provides a way for us to communicate to
customers our value proposition, and how our prod-
ucts can help them lower their costs of IT, manage
their business risk, and better align their IT invest-
ments with their business priorities.
Although CA has long had the industry’s broadest
portfolio with our Unicenter, eTrust and BrightStor
brands of products, our offerings were neither com-
plete nor integrated. After an extensive analysis of
our portfolio, we concluded that we needed to build
and buy technology to create a broader, more com-
plete, integrated offering to deliver upon the promise
of EITM. Over the course of FY2006, we concluded
9 acquisitions of various sizes, including Concord
Communications, Niku and Wily. Each of these com-
panies was a leader in its own segment, and together
with the rest of the CA product line, gives us what
we believe to be the strongest and most complete
offering to manage and secure IT. We are seeing
strong growth in these acquired companies, along
with strong synergy with the rest of the portfolio. Our
intention in this coming year and beyond is to build
on this growth, while integrating the pieces to make it
easier for customers to upgrade from one part of the
portfolio to the next.
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Our third priority is to align CA’s people
and initiatives around a common purpose
or mission,
so we started by writing that down in the form of the
CA Charter. We then took our Enterprise IT Man age-
ment initiative as the framework for us to coordinate
our marketing, sales and development teams. We
created a set of cross-functional teams to look at the
business processes of the company and recommend
changes. Most importantly, for the fi rst time in CA’s
history, in Fiscal 2006 we produced both a strategic
and fi nancial plan, which we used to drive the Fis-
cal 2007 plan and prioritize our resources. In Fiscal
2007, we will continue these initiatives and use them
to improve our business processes.
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Our fourth priority is to expand our reach
using business partners.
Here again I can report success; with much done but
more to do. Our business is highly concentrated in
the world’s largest corporations and governments.
While there is more that we can do with these exist-
ing clients, they only represent about 25 percent of
the total addressable market for our products.
Reaching this broader opportunity will require the
help of our business partners. In enterprise custom-
ers, often the opportunity is part of a bigger business
process re-engineering solution, driven by Global
Systems Integrators like Accenture, Deloitte, Bear-
ing Point, E&Y, PWC, and Cap Gemini. Our business
with these partners — while off a small base — more
than doubled in FY2006, and we expect it to continue
to expand.
To extend our business outside large enterprises, we
need again to rely upon business partners, both to
represent us and to provide the services our custom-
ers need to implement these solutions. As we seek to
expand globally, we need to create a similar network
of partners. Both these initiatives are well underway,
with value added reseller revenue up 42 percent.
Finally, while our focus is the enterprise, we have
solutions that are relevant to consumers, especially
in security. To reach consumers, we rely upon a mix
of dealers and e-commerce channels. Our business
through dealers and e-commerce channels was up
64 percent. Another important, but still relatively
small channel for CA, is reselling through Original
Equipment Manufacturers (OEMs). Although our
sales through OEMs was up 8 percent, I think there
is much more we can do to embed our security and
management technology in the products of others.
While our business with channels grew faster than
the rest of the business, I am convinced that we can do
even better, and I am counting on our channels busi-
ness for a signifi cant portion of our future growth.
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