Computer Associates 2007 Annual Report Download - page 23

CA Extended Support — This service addresses the needs of customers who require additional time to migrate or
upgrade to new CA releases, products or solutions. This service provides technical support for a specific CA solution,
product or release that has reached its End-of-Service or End-of-Life date.
CATechnical Support has also extended its support to include implementation partners.The CA Solution Deployment Support
offering is intended to help partners validate their solution approach, provide customized information and priority routing of
any issues during the project through an engagement-focused CA Technical Support representative. This customized
implementation support is focused on reducing the risk in project plans and improving the time to value for customers.
Separately, we offer support options for consumer and commercial products including chat, email and voice support. We also
offer both business hours and 24x7 support options, in addition to web-based self-help for our high-volume product solutions.
This combination of dedicated Technical Support staff, online services, custom offerings, and partner support programs drives
the post-sale customer and partner experience, as well as satisfaction with and loyalty to CA’s products.
Business Model
Customers face challenges when trying to achieve their desired returns on software investments. These challenges are
compounded by traditional software pricing models that often force companies to make long-term commitments for
projected capacities. When these projections are inaccurate, companies may not achieve the desired returns on investment.
Many companies are also concerned that, due to short product life cycles for some software products, new products may
become available before the end of their current software license agreement periods. In addition, some companies,
particularly those in new or evolving industries, want pricing structures that are linked to the growth of their businesses
to minimize the risks of overestimating capacity projections.
We believe we can service our customers better by offering more flexible licensing terms to help customers realize maximum
value from their software investments. In October 2000, we formalized this philosophy and refer to it as our business model.
Our business model offers customers a wide range of purchasing and payment options. Our flexible licensing terms allow
customers to license our software products for relatively short periods of time, including on a monthly basis. Through these
flexible licensing agreements, customers can evaluate whether our software meets their needs before making larger
commitments. As customers become more comfortable with their software investments, they typically license our
software for longer terms, generally up to three years.
Some customers prefer to choose cost certainty and sign longer-term agreements. Under our flexible licensing terms,
customers can license our software products under multi-year licenses, and most customers choose terms of one to three
years, although longer terms are sometimes selected.We often provide our customers with the option to change their product
mix after an initial period of time to mitigate their risks. We also help customers reduce uncertainty by providing a standard
pricing schedule based on simple usage tiers. Additionally, we offer our customers the ability to establish pricing models for
our products based on their key business metrics. Although this practice is not widely utilized by our customers we believe
this metric-based approach is unique in the software industry and can provide us with a competitive advantage.
As a result of the flexible licensing terms we offer our customers, specifically the right to receive unspecified future upgrades
for no additional fee, as well as maintenance included during the term of the license, we are required under generally accepted
accounting principles in the United States of America to recognize revenue from certain of our license agreements ratably over
the license term. For a description of how ratable revenue recognition has impacted our financial results, refer to “Results of
Operations” within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Sales and Marketing
We offer our solutions through a direct sales force, which is a combination of Account Directors, Account Managers and
technical experts. We also partner with global systems integrators, value-added and distribution partners and OEMs. (See
“— Growth Strategy — Strengthening Partner Relationships” above).
We made substantial changes to our sales organization and sales coverage model during fiscal years 2006 and 2007. In the
second quarter of fiscal year 2006, we expanded our “enterprise account” direct sales model in which Account Directors and
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