Computer Associates 2011 Annual Report Download - page 34

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, changes 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 Form 10-K and the Risk Factors included in Part I, Item 1A of
this Form 10-K as well as other cautionary statements and risks described elsewhere in this Form 10-K.
Business overview
We are the leading independent enterprise information technology (IT) management software and solutions company with
expertise across IT environments — from mainframe and physical to virtual and cloud. We develop and deliver software and
services that help organizations manage, secure and automate their IT infrastructures and deliver more flexible IT services.
This allows companies to more effectively and efficiently respond to business needs.
We address components of the computing environment, including people, information, processes, systems, networks,
applications and databases, regardless of the hardware or software customers are using. We license our products worldwide.
We service companies across most major industries worldwide, including banks, insurance companies, other financial services
providers, government agencies, manufacturers, technology companies, retailers, educational organizations and health care
institutions. These customers typically maintain IT infrastructures that are both complex and central to their objectives for
operational excellence.
We are the leading independent software vendor in the mainframe space, and we continue to innovate on the mainframe
platform, which runs many of our largest customers’ most important applications. As the IT landscape continues to evolve,
more companies are seeking to improve the efficiency and availability of their IT resources and applications through
virtualization, which enables users to run multiple virtual machines on each physical machine and thereby reduce operating
costs associated with physical infrastructure. Virtualization is essential to the evolution of cloud computing, the on-demand
access to a shared pool of computing resources that can be configured and used as needed. At the same time, the
consumption of IT assets is evolving through the adoption of Software-as-a-Service (SaaS), where customers can obtain
software on a subscription, “pay-as-you go” model.
As more companies begin to adopt virtualization and cloud computing, data centers are becoming more complex, with
mainframes, physical servers, virtualized servers and private, public and hybrid (a combination of public and private) cloud
environments. As a result of this heightened complexity, we believe it is essential for companies to effectively manage and
secure all of their various computing environments.
We have a broad portfolio of software solutions that address customer needs, including mainframe; service assurance; security
(identity and access management); project and portfolio management; service management; virtualization and service
automation; and cloud computing. We deliver our products on-premises or, for certain products, using SaaS.
Our strategy is to help our customers manage, secure and automate IT and to make us their strategic partner as they deploy
new technologies and maximize their investments in current systems and applications. This strategy emphasizes accelerating
our growth by continuing to build on our portfolio of software and services to address customer needs in the above-
mentioned areas of focus through a combination of internal development and acquired technologies. We believe this strategy
builds on our core strengths in IT management while also positioning us to compete in high-growth markets, including
virtualization, cloud and SaaS. We are also seeking to expand our business beyond our traditional core customers, generally
consisting of large enterprises, to reach what we refer to as “emerging enterprises” or “growth accounts” (which we define as
companies with revenue of $300 million to $2 billion) and customers in “emerging geographies” or “growth geographies”. We
are increasing the number of our relationships and expanding existing relationships with various types of service providers,
particularly global outsourcers, regional managed service providers and communication network operators.
To enable us to execute our growth strategy more effectively, we have:
•Completed several key acquisitions during fiscal 2011 in an effort to expand our product portfolio, including Arcot
Systems, Inc. (Arcot), Torokina Pty Ltd, and Hyperformix, Inc.;
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