The corporate realignment at Computer Associates International was aimed more at stoking Wall Street's tepid interest in the firm than at initiating sweeping changes on the customer front, analysts said.
In a widely expected move, CA last week announced that founder Charles Wang was stepping down as CEO. President and chief operating officer Sanjay Kumar was named to the post. Wang will continue as chairman of the company.
CA also announced plans to spin off some of its software and services business into independent companies.
The first unit being spun off will be called iCan-ASP. It will be aimed at providing software technologies for application service providers. CA also announced plans to sell some of its desktop technologies but gave no deadlines.
The moves came a few weeks after CA announced a 69 per cent plunge in profits for its latest quarter and were seen by analysts as an attempt to bolster Wall Street's confidence in the firm.
"This reorganisation is at least in part being driven by a feeling that CA's stock price does not reflect the true value of the company," said Michael Dortch, an analyst at Robert Frances Group (US).
Spinning off some of its businesses into independent units will give the company a new way of "extracting that value," Dortch said.
"I think they want people in the investment community to know they have a plan in place to increase shareholder value," said Paul Rodriguez, managing director at New York-based C.E. Unterberg, Towbin.
"But I was hoping they would get a little more aggressive" in terms of spinning off more business units, Rodriguez added.
Kumar is taking the helm as $US6 billion CA attempts to shrug off the consequences of delayed mainframe software contracts and weak sales in Europe.
Those resulted in first-quarter profits dropping to $US84 million from $US272 million a year ago.
Despite the fall in profits, analysts said they don't believe that CA is in any financial trouble yet. Instead, the company's real challenge will be to shake its image as a vendor of just mainframe technologies, Dortch said.
CA sells a wide range of software, including security and customer relationship management technologies, but it's still mostly known for its enterprise products.
"They could definitely leverage their product lines better," Rodriguez said.
"But I think they are working on it."