Requiem for a predator

Charles Wang's abrupt retirement late last month, after 26 years, is giving detractors a last chance to disparage his accomplishments by dwelling on recent boardroom battles and the current investigations that they claim will scar his legacy. Wang was never a media darling, and competitors hated him, but the fact remains that he built a US$3 billion company from scratch. Few companies, in any industry, have grown so successfully by acquisition as Computer Associates International Inc. Wang clearly did some things quite well.

Almost from the beginning, it was clear where CA fit in the software ecosystem: predator. Whether competing against IBM Corp. or other software companies, Wang played the game as a blood sport, not a pastime. He built his company through acquisition. His strategy was straightforward: wait for a competitor with less capital or business acumen to make itself vulnerable, and pounce. Many software start-ups were well versed technically but were naive, lacking a credible business plan or experienced management. Wang hunted on fertile ground.

CA climbed the food chain fast by taking the prime cuts and dispensing with the rest. Stories about rough-and-tumble business practices abound, but consider the context. When CA bought a company, its offer was always the best, but often the last resort. Wang shattered delusions as he tore into the acquisition to find the skeletons in the closet. Besides bloated compensation packages and lucrative perks, it wasn't unusual to discover many phantom employees -- relatives of top officers -- on the payroll. All this remained hidden, and laid-off workers, rather than blaming the people they worked with, naturally resented the New York interlopers who showed them the door. But to Wang, who spent much of his career in a Spartan office behind hand-me-down furniture running an ultralean company, their situation was a direct consequence of inept management and bad business practices.

Was CA's voracious appetite a help or a hindrance to most customers? A carnivore that grows by devouring competitors doesn't generate affection, but business is about mutual interest. New customers delighted in the innovative pricing and packaging that made otherwise inaccessible technology available. Installed customers complained of higher maintenance fees and degraded support.

CA kept programs on the market that otherwise would have gone completely unsupported and been untenable to own. IT managers faced with the Hobson's choice of a painful migration or paying through the nose usually chose the latter. That's why CA continued growing while the prior owners became food. Of course, it was often easier to point a finger at CA than explain how a department had painted itself into a corner. But the volume of complaints about shoddy CA support and sales practices can't be ignored either.

Wang's undeniable value to customers -- mainframe owners in particular -- was as an alternative to IBM. CA exploited the intransigence of Big Blue's pricing and business contracts. Whether they intended to sign or not, IT veterans invariably kept a CA coffee mug on the desk for leverage when the guys in white shirts came calling.

Predators keep an ecosystem in balance by thinning out the herd, but they also keep large rivals on their toes. Even if you don't admire Charles Wang, having him stalking through the software ecosystem was beneficial. Who else could possibly make an elephant dance? Lou Gerstner may have been Big Blue's mahout, but Charles Wang lurking in the underbrush provided the real motivation.

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