CA and CSC sign truce, renew ties
- 11 October, 1999 12:01
Computer Associates International and Computer Sciences Corp (CSC) publicly buried the hatchet last week, calling off pending lawsuits against each other and announcing an expansion of their global software licensing agreement.
The lawsuits stemmed from CA's attempt last year to create an experienced professional services division by acquiring El Segundo, California-based CSC.
CSC fought off the takeover in a bitter and litigious battle with the Islandia, New York-based enterprise management software giant.
The new agreement is an expansion of a 1995 strategic alliance between the companies. It brings to CSC and its customers the fruits of CA's June acquisition of Platinum Technology. CSC can now license Platinum's tools, which include sophisticated database and systems management software.
Analysts said it's a win-win situation. "It stops sapping resources that could be better used to develop software and support," said Michael Dortch, an analyst at Robert Frances Group in San Francisco.
CSC's agreement with Platinum included few tools, a CSC spokesman said. "Now we can offer the whole range. It's one more arrow in our quiver."
But customers might not know the difference. Operations that oil company Conoco in Houston outsources to CSC are completely handled by CSC, said Brent Meyers, a Conoco information technology manager.
Still, some IT managers may reap tactical rewards.
"If I'm a CIO who's been looking at CSC to do some outsourcing but holding back because I'm using CA tools, this has got to knock out those final objections," Dortch said.
The year-and-a-half-long drama is not unlike the battle that followed CA's takeover attempt of Electronic Data Systems in 1991, said Jonathan Eunice, an analyst at Illuminata, a consultancy in New Hampshire. When the dust from those suits and countersuits settled, the two companies "came together and did some really good work around (CA management and application development software) Unicenter TNG and Jasmine," Eunice said.
Such dramas "are fun to watch, but companies make more money working together", he said.
The suits had been trickling to an end. In August, the US District Court in Los Angeles dismissed claims brought by CSC against CA, finding no evidence that CA had used confidential CSC information in its takeover attempt. The court also dismissed CA's counterclaims against CSC for interference with the tender offer.