Computer Associates 2010 Annual Report Download - page 32

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Item 7. Management’s discussion and analysis of financial condition and results of
operations
Introduction
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) is intended to provide
an understanding of our financial condition, change in financial condition, cash flow, liquidity and results of operations. This
MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to
Consolidated Financial Statements appearing elsewhere in this Report and the Risk Factors included in Part I, Item 1A of this
Report as well as other cautionary statements and risks described elsewhere in this Report. References in this MD&A to fiscal
2010, fiscal 2009, fiscal 2008 and fiscal 2007 are to our fiscal years ended on March 31, 2010, 2009, 2008 and 2007,
respectively.
Business overview
We are the leading independent enterprise IT management software and service company with deep expertise across IT
environments — from mainframe and physical to virtual and cloud. We develop and deliver software and services that help
organizations manage and secure their IT infrastructures and deliver more flexible IT services. This allows companies to more
effectively and efficiently respond to business needs. We address virtually all of the components of the computing
environment, including people, information, processes, systems, networks, applications and databases, regardless of the
hardware or software customers are using. We have a broad portfolio of software products that address our customers’ needs
with a specific focus on service management and assurance; mainframe; project and portfolio management; security (identity
and access management); virtualization and automation; and cloud computing. We deliver our products on-premise or, for
certain products, via Software-as-a-Service (SaaS).
We license our products worldwide. We 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. These customers typically maintain IT infrastructures that are both
complex and central to their objectives for operational excellence.
We offer our software products and solutions directly to our customers through our direct sales force and indirectly through
global systems integrators, managed service providers, technology partners, value-added resellers, exclusive representatives
and distributors and volume partners.
CA’s business model
We generate revenue from the following sources: license fees — licensing our products on a right-to-use basis; maintenance
fees — providing customer technical support and product enhancements; and service fees — providing professional services
such as product implementation, consulting and education. The timing and amount of fees recognized as revenue during a
reporting period are determined in accordance with generally accepted accounting principles in the United States of America
(GAAP). Revenue is reported net of applicable sales taxes.
Under our business model, we offer customers a wide range of licensing options, including the flexibility to license software
under month-to-month licenses or to fix their costs by committing to longer-term agreements. Licenses sold for most of our
software products permit customers to change their software product mix as their business and technology needs change and
include the right to receive software products in the future within defined product lines for no additional fee, commonly
referred to as unspecified future software products, as well as maintenance included during the term of each license. In some
instances, we sell certain products without the right to receive unspecified future software products.
Performance indicators
Management uses several quantitative and qualitative performance indicators to assess our financial results and condition.
Each provides a measurement of the performance of our business and how well we are executing our plan.
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