Computer Associates 2011 Annual Report Download - page 19

Our 5,600 engineers are primarly in Beijing, China; Prague, the Czech Republic; Hyderabad, India; Herzliya, Israel; and the
United States. In the United States, product development is primarily performed at our facilities in Redwood City and
San Francisco, California; Lisle, Illinois; Framingham, Massachusetts; Ewing, New Jersey; Islandia, New York; Pittsburgh,
Pennsylvania; Plano and Austin, Texas; and Herndon, Virginia. Our engineers work collaboratively in both physical and virtual
labs, increasingly using an agile development methodology. Among other things, agile development is intended to enable the
incorporation of new customer insights throughout the development process, which in turn strengthens our ability to bring to
market leading-edge innovations that deliver real business value to our customers.
Our research and development activities also include a number of efforts to support our technical community in its pursuit of
leading solutions for customers. We continue to use CA Technologies Labs on Demand to strengthen our relationships with
research communities by working with academia, professional associations, industry standards bodies, customers and partners
to explore novel products and emerging technologies. Our CA Council for Technical Excellence leads innovative projects
designed to promote communication, collaboration and synergy throughout our global technical community. The CA
Architecture Board helps us ensure a strong central architecture that supports our growth strategy and our Distinguished
Engineer Board encourages and recognizes excellence in engineering.
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 industry standards organizations and take the lead on many issues. Our professionals
are certified across key standards, including ITIL», PMI and CISPP, and possess 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 ISO’s 9001:2000 Global Certification. In addition, our Global IT
Operations have attained ISO/IEC 20000-1:2005 and ISO/IEC 27001:2005 certifications. These certifications demonstrate our
leadership in IT service management and information security.
We have charged to operations $471 million, $468 million and $479 million in fiscal 2011, 2010 and 2009, respectively, for
product development and enhancements. In fiscal 2011, 2010 and 2009, we capitalized costs of $170 million, $188 million
and $129 million, respectively, for internally developed software.
Intellectual property
Certain aspects of our products and technology are proprietary. We rely on U.S. and foreign intellectual property laws,
including patent, copyright, trademark and trade secret laws to protect our proprietary rights. However, the extent and
duration of protection given to different types of intellectual property rights vary under different countries’ legal systems. In
some countries, full-scale intellectual property protection for our products and technology may be unavailable, or the laws of
other jurisdictions may not protect our proprietary technology rights to the same extent as the laws of the United States. We
also maintain contractual restrictions in our agreements with customers, employees and others to protect our intellectual
property rights. In addition, we occasionally license software and technology from third parties, including some competitors,
and incorporate them into our own software products.
Our patent portfolio includes more than 500 issued patents and 700 pending applications in the United States and the
European Union. The patents generally expire at various times over the next 20 years. Although the durations and geographic
coverage for our patents may vary, we believe our patent portfolio adequately protects our interests.
The source code for our products is protected both as trade secrets and as copyrighted works. Some of our customers are
beneficiaries of a source code escrow arrangement that enables them to obtain a contingent, limited right to access our
source code.
Although we have a number of patents and pending applications that may be of value to various aspects of our products and
technology, we are not aware of any single patent that is essential to us or to any of our principal business product areas.
Product licensing
Our licensing model offers customers a wide range of purchasing and payment options. Under our flexible licensing terms,
customers can license our software products under multi-year licenses or on a month-to-month basis, with most customers
choosing terms of one-to-three years, although longer terms are sometimes negotiated by customers in order to obtain
greater cost certainty. We also help customers reduce uncertainty by providing a standard pricing schedule based on simple
usage tiers. With respect to licenses sold for our mainframe products, we offer our customers the right to receive unspecified
future software products for no additional fee, and we include maintenance during the term of the license. With respect to
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