CA Aims to Reinvent Itself Around E-business

SAN MATEO (04/10/2000) - For Sanjay Kumar, Computer Associates International Inc. cannot move fast enough. The president and chief operating officer of the second-largest software company has been instrumental in growing CA over the years, primarily by acquiring companies. Now CA is looking to parlay its role as a corporate infrastructure provider onto the Web with its own technology for building e-business applications.

On the eve of the company's CA World user conference and a major internal reorganization, Kumar sat down with InfoWorld Executive News Editor Martin LaMonica, Senior Editor Eugene Grygo, and Reporter Brian Fonseca to discuss developing the "e" in CA's business.

InfoWorld: How will CA play more in the e-business and e-commerce worlds?

Kumar: A lot of people talk about those as kind of loose buzzwords. But in our business today, there are really two big chunks of technology and solutions that we are providing. The first is what I would consider just classic infrastructure, which is management software, security, and those kinds of things. We continue to do very well in that space. But more of that today than ever before is focused on the Web, essentially. But the speed at which we are delivering new products, the release rate, how we sell them, how we market them, who we market them to, what we can charge for them, essentially, and the price points that the customers are willing to accept today -- all that has changed in 12 months. From the time that we announced the [recently closed] Platinum [Technology] acquisition, it has completely changed, turned upside down. The other half of the business is what I call the application and information management infrastructure. That business has changed very dramatically, and I believe it is set for the most dramatic change that we [will see] in our business in the next six to nine months, especially with the new Jasmine that is coming out, the way that the Neugent technology has been taking off, and some stuff coming on board from Sterling [Software].

InfoWorld: Part of the reorganization brought your services people into the fold. Why is that?

Kumar: We are starting to kind of look at our business from the inside out, top to bottom, if you will, to make sure that, one, it is geared to the kind of service the technology and solutions markets that we are servicing -- both the infrastructure side of the business and information management and the application side of the business.

The second thing that is important for us is the ability for the sales force to sell uniformly across the board products and services together. As you know, we were not in the services business until 24 months ago. This will be our 25th month in the services business, essentially. We have gone from 300 people to 3,500 in that business. I think [we've done this] reasonably successfully. But nobody at CA would ever consider that it is just a product company anymore. In 24 months, that has changed. I mean it has been beat out of the system; the culture here is different. Most of our larger deals are driven by solution sales today. And we're collapsing, essentially, those two sides of the business together.

InfoWorld: When you say that the company will be different in 12 months, what are the product lines that are going to drive the change?

Kumar: I think the single biggest things that are going to drive change are Jasmine and Neugents. We focused at the very beginning on nothing but Unicenter for that technology. But we have realized the applicability in that technology is far greater in business than in any management tool that we can ever create, whether it is in insurance, finance, retail -- just huge applications.

InfoWorld: So are you going to end up in the business of making business Neugents?

Kumar: The InterBiz [applications unit] has a number of [Neugents] that they are working on for the business applications and the extensions to the applications that are there. But these are just solutions that we will build for customers.

For example, take a bank that comes to us and says, 'We have 15 years' worth of legacy data sitting around. We want to understand what kind of customer would be willing to buy what kind of product and [at] what kind of price. We want to build an application that, when the customer calls the call center, we want to decide on the fly what they should buy, what they should sell, or whether they are happy or unhappy, for example.' Perfect application, when needed. We go there, and we build a Jasmine app using the Platinum tools for housing repository tools. We get to use the Neugent core engines in there. That's the kind of stuff that we are building today.

So, I believe, in that sense, if it continues on the track record that it is continuing [on] right now, it will be a very different CA in a year.

InfoWorld: How do Neugents differ from your classic data-mining and -profiling technology?

Kumar: That works backwards. With data mining [and] profiling, you have to build all these rules. ... For a credit company to decide whether [it] should give a credit card to somebody, [you have to build] very complex rules. And to do it, and maintain those [rules], is very complicated.

With a Neugent, you build a very simple model. It's only a thing that runs on an NT server, essentially. You go, take two years' worth of data or a year's or 90 days' [worth] -- as long as the data is collected consistently and [is] highly repeatable, which is very important for the Neugent -- and you tell it, 'Here's the data and credit card transaction and health care transactions. And the following we know were fraudulent transactions. Build a model.' And you test the model against live data for some number of days. And then you tweak it on certain parameters that the Neugent looks at in correlation to get their set rate up. And then essentially as the data comes through, you ask it simple questions [such as], 'What is the chance of this being fraudulent?'

InfoWorld: There is a lot of talk about these business-to-business exchanges.

How do you see CA taking advantage of that?

Kumar: Well, here I think we made a mistake. We did a number of them and we are doing a number of them. But unlike the people who have really capitalized on them from a marketing point of view, ... we didn't insist that we become a part of the exchange, if you will, for our marketing perspective. We really screwed up on that. We have the constructive exchange going on. The architect exchanges, we're building.

We have huge amounts of technology invested in that space. But we completely screwed up in not getting out there with a message ahead of the curve, where the Oracles of the world just crushed it in that sense.

InfoWorld: You have been portrayed as a person who helps smooth out some of the rough edges that CA has had with industry partners.

Kumar: It's an overrated story.

InfoWorld: Are you consciously trying to be easy to work with?

Kumar: I'd say the focus of the company has been that it is our job to have good technology, good solutions. And it is our job to mold the company in a way that the customer or the partner wants to see us. Whatever that is, we have to be able to do it, and do it faster than anybody else. Part of our strategy is to get some of those other functions, which affect the overall perception of CA, down closer to the customer.

InfoWorld: What other themes are you going to be talking regarding e-business?

Kumar: That you can't only build. You have to build it, you have to deploy it, you have to support it, you have to manage it. This is where CA is all focused on. It is a very big thing.

InfoWorld: What's the main message you want to convey to your customers at the conference?

Kumar: I think they are going to find out that, in a year, the 'e' in our business [will have] grown dramatically. Everything that we are doing is focused on that. And while a number of people in the industry have done a good job marketing that, we haven't; and therefore, [our focus] is to some degree to catch up in terms of the market perception of how much 'e' is in our business and, second, to talk about what we are doing in the next year or year and a half in terms of technologies to support the things they want us to do.

InfoWorld: Are you concerned that nimble start-ups might outmaneuver you?

Kumar: Well, [Chairman and CEO] Charles [Wang] and I have a healthy level of paranoia for all things new. We are in a world in which the rate of change of technology means your success is no longer assured. It used to be that if you were successful product you were assured of a good five-year run. Maybe you got two years. The world is changing so rapidly in technology. And it is simply in the forefront of everything today. There is not a CEO who is not focused on technology today.

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