Computer Associates 2009 Annual Report Download - page 15

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•Technology Partners are leading platform and application vendors who enable strong product integration and
technical collaboration by helping us ensure that CA products and our partners’ products deliver comprehensive
solutions for our customers’ IT environments. Some of our valued partners include Microsoft, SAP and VMware,
which help us adapt and respond to the emergence of new technologies and trends, such as virtualization and cloud
computing.
•EITM Value-Added Resellers combine our software products with specialized consulting services and provide
enhanced, user-specific solutions to a particular market or sector.
•Distributors and Volume Partners enable us to broaden our reach to the Small and Medium Business market segment
and provide efficient personalized local delivery, service and support to our customers in that market.
Customers
We have a large and broad base of customers, including the majority of the Forbes Global 2000. Most of our revenue is
generated from customers who have the ability to make substantial commitments to software and hardware
implementations. Our software products are used in a broad range of industries, businesses and applications. We
currently service companies across most major industries worldwide, including banks, insurance companies, other
financial services providers, governmental agencies, manufacturers, technology companies, retailers, educational
institutions and health care institutions.
When customers enter into software license agreements with us, they often pay for the right to use our software for a
specified period of time. When the terms of these agreements expire, the customers may either renew the license
agreements or pay usage and maintenance fees, if applicable, for the right to continue to use our software, receive
support, and/or receive future upgrades. Our customers’ satisfaction is important to us and we believe that our flexible
business model allows us to maintain our customer base while allowing us to cross-sell new software products and
services to them.
No individual customer accounted for a material portion of our revenue during any of the past three fiscal years. As of
March 31, 2009, three customers accounted for substantially all of our outstanding prior business model net receivables,
which amounted to approximately $240 million, including one large IT outsourcing customer with a license arrangement
that extends through fiscal 2012 with a net unbilled receivable balance of approximately $232 million. Refer to “Business
Model” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further
information.
Research and 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 IT industry and will continue to enhance our products to help
them remain compatible with hardware, operating system changes and our customers’ needs.
Our research and development activities include a number of efforts. We established CA Labs in 2005 to strengthen
relationships between research communities and us. We formed the CA Council for Technical Excellence in 2006 to lead
innovative projects designed to promote communication, collaboration, and synergy among CA’s global technical
community.
To keep us on top of major technological advances and to ensure our products continue to work well with those of other
vendors, we are active in most major standards organizations and take the lead in many. Many of our professionals are
certified across key standards, including ITIL», PMI, CISPP, and have built knowledge and expertise in key vertical
markets, such as financial services, government, telecommunications, insurance, health care, manufacturing and retail.
Further, we were the first major software company to earn the International Organization for Standardization’s (ISO)
9001:2000 Global Certification.
We have approximately 5,600 engineers globally who design and support CA software and have charged to operations
$486 million, $526 million and $557 million in fiscal 2009, 2008 and 2007, respectively, for product development and
enhancements. In fiscal 2009, 2008 and 2007, we capitalized costs of $129 million, $112 million and $85 million,
respectively, for internally developed software.
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