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Computer Associates International, Inc.
(631)
342-6000
One
Computer Associates Plaza
Islandia, NY 11749
www.ca.com
Sales
$3.3
billion
Business Description
Computer Associates is one of the world’s largest providers of
management software. We commenced operations in 1976 and completed an
initial public offering of common stock in December 1981. We design, market,
and license computer software products that allow businesses to efficiently
run, manage, and automate critical aspects of their IT operations. Our
common stock is traded on the New York Stock Exchange under the symbol “CA.”
We have a broad portfolio of software products that are designed to operate
with all major business computer hardware platforms, operating systems, and
products marketed by other hardware and software companies. Our software
products include those that we have sold for many years, as well as newer
products designed to address our customers’ evolving business needs. Where
appropriate, our products are specifically designed to work well with our
other software products. Because the time, effort, and cost to make
different software products work together is high, customers place greater
value on software products that work well with one another.
We have a large and broad base of customers and estimate that 95% of the
Fortune 500® companies currently use our products. When customers enter into
a software license agreement with us, they often pay for the right to use
our software for a specified period of time. Upon the expiration of the term
of the agreement, the customer often must either renew the license agreement
or pay usage/maintenance fees, if applicable, for the right to continue to
use our software and receive support. We experience contract renewal rates
of approximately 80%. We believe that the existing relationships with our
customers provide us the opportunity to cross-sell new software products to
them.
We are considered an Independent Software Vendor (ISV). ISVs develop and
license software products that can increase the efficiency of computer
hardware platforms or operating systems sold by other vendors. Companies
that make the computer hardware and operating systems — including
Microsoft, IBM,
Hewlett-Packard (HP) and
Sun Microsystems — often encourage
and support ISVs. In some cases, these companies sell software that compete
with our products.
Products
In many cases, customers work with several vendors that provide different
hardware platforms and operating systems. Designed to work with almost every
commercially available computer hardware platform and with all common
software operating systems, our software products address our customers’ IT
requirements in the following areas: enterprise management, security
management, storage management, application life cycle management, data
management and application development, and portal and business
intelligence. Our products are supported by CA Common Services™ and Portal
Technology (described below), so that they can work alone or together with
other vendors’ software products.
CA Common Services is a term used to describe the common infrastructure that
allows our software products to work together with those from other
companies. We believe CA Common Services improves efficiency and reduces the
problems associated with running multiple software products. Our Portal
Technology gives customers a web-based, personalized workplace of our
software products.
Our Product Areas:
Unicenter® for Infrastructure Management — Our Unicenter products are
designed to improve the efficiency and responsiveness of our customers’
computing operations. These products identify and help resolve problems
within a customer’s IT infrastructure. These products also automate
time-consuming tasks such as software installation, tracking computing
assets, and managing customers’ databases. We offer Unicenter products
across the following three major solution areas:
• Operations Management — These products focus on the availability, health,
and performance of the entire computing system, from mainframe computers to
handheld devices. Products include Unicenter® Network and Systems
Management, Unicenter® NetMaster™, Unicenter® AutoSys® Job Management,
Unicenter® CA-7® Job Management, and Unicenter® Database Management.
• Service Management — These products manage and measure service levels to
help ensure that the IT infrastructure continuously meets business demands.
Products include Unicenter® ServicePlus Service Desk, and Unicenter® Service
Level Management.
• Resource Management — These products are designed to enable organizations
to discover, track, collect, maintain, and manage their IT resources.
Products include Unicenter® Argis® Portfolio Asset Management, Unicenter®
Asset Management, and Unicenter® Software Delivery.
eTrust™ for Security Management — Our eTrust solutions simplify security
management by providing an innovative, comprehensive approach to security.
The products protect information assets and resources; provide appropriate
system and information access to employees, customers, and partners; and
centrally manage security-related administration. We offer eTrust products
in the following three categories:
• Identity and Access Management — eTrust™ Identity and Access Management
Suite empowers IT organizations to manage growing internal and external user
populations; secure an increasingly complex array of resources and services;
and comply with critical regulatory mandates. Solutions include eTrust™
Access Control, eTrust™ Admin, eTrust™ CA-ACF2® Security, eTrust™ CA-Top
Secret® Security, eTrust™ Directory, eTrust™ Single Sign-On, and eTrust™ Web
Access Control.
• Threat Management — These products are designed to help customers identify
and eliminate internal and external threats such as harmful computer
viruses; unauthorized access into computing systems; and security weaknesses
associated with operating systems, databases, networks, and passwords.
Solutions include eTrust™ Antivirus, eTrust™ EZ Armor™, eTrust™ Intrusion
Detection, eTrust™ Secure Content Manager, and eTrust™ Vulnerability
Manager.
• Security Information Management — These solutions help to integrate and
prioritize security event information created by CA and third-party security
products and enable customers to increase operational efficiencies, help
ensure business continuity, adhere to regulatory compliance, and mitigate
risks. Solutions include eTrust™ Network Forensics, eTrust™ 20/20™, eTrust™
Security Command Center, and eTrust™ Vulnerability Manager.
BrightStor® for Storage Management — These products are designed to enable
companies to centrally manage enterprise storage, while helping to ensure
continuous availability and integrity of data. This increases storage
efficiency and mitigates risk.
BrightStor solutions help control escalating costs, increase the
effectiveness of storage resources, and support business continuity and
regulatory compliance. Solutions include BrightStor® ARCserve® Backup,
BrightStor® Enterprise Backup, BrightStor® ARCserve® Backup for Laptops &
Desktops, BrightStor® SAN Designer, BrightStor® SAN Manager, BrightStor®
Storage Resource Manager, BrightStor® CA-Vantage™ Storage Resource Manager,
and BrightStor® CA-1® Tape Management.
AllFusion® for Application Life Cycle Management — These products are
designed to automate the life cycles of systems and applications, from
design and development to deployment and maintenance. These products
integrate with existing environments and infrastructures, and provide
management of the software development process for any platform, from the
mainframe to the Web. Products include AllFusion® ERwin® Data Modeler for
application and data design, AllFusion® Harvest Change Manager for
distributed platforms, AllFusion® Endevor® Change Manager for mainframe
platforms, and AllFusion® Gen for application generation.
Advantage™ for Data Management and Application Development — These products
are designed to help customers store and manage large amounts of data; and
automate, standardize, and improve the processes they use to build and
maintain vital company information. Products include Advantage™ EDBC®,
Advantage™ CA-Datacom®, Advantage™ Ingres®, and Advantage™ CA-IDMS®
Database.
CleverPath™ for Portal and Business Intelligence — These solutions enable
businesses to centralize information access; refine, analyze, and sort data;
create and distribute informative reports; and develop executive dashboards
that mirror their business processes. Products include CleverPath™ Portal,
CleverPath™ Aion® Business Rules Expert, and CleverPath™ Dashboard Option.
Business Model
Customers face challenges when trying to achieve their desired returns on
software investments. These challenges are compounded by traditional
software pricing models that often force companies to make long-term
commitments for projected capacities. When these projections are inaccurate,
the desired returns on investment are not achieved. Many companies are also
concerned that, due to short product life cycles for some software products,
new products may become available before the end of their current software
license agreement periods. In addition, some companies, particularly those
in new or evolving industries, want pricing structures that are linked to
the growth of their businesses to minimize the risks of overestimating
capacity projections.
We believe we can service our customers better by offering more flexible
licensing terms to help ensure they realize maximum value from their
software investments. In October 2000, we formalized this philosophy and
refer to it as our Business Model.
Our Business Model offers customers a wide range of purchasing and payment
options. Under what we call “FlexSelect LicensingSM,” customers can license
our software products for relatively short periods of time, including on a
monthly basis. By offering more flexible licensing agreements, customers can
evaluate whether our software meets their needs before making larger
commitments. As customers become more comfortable with their software
investments, they typically license our software for longer terms, generally
up to three years.
Some customers prefer to choose cost certainty and sign longer-term
agreements. Under FlexSelect Licensing, customers can also license our
software products under traditional one-, two-, or three-year licenses. We
provide our customers with the option to change their product mix after an
initial period of time to mitigate their risks. We also help customers
reduce uncertainty by providing a standard pricing schedule based on simple
usage tiers.
We also offer software licenses to customers based on the value created from
our customers’ business processes by linking our pricing structure to the
growth of our customers’ businesses. For example, an airline company may
choose to license our software based on the number of passenger miles flown
during a defined period. Although this practice is not widely utilized by
our customers, we believe this metric-based approach is unique in the
software industry and can provide us with a competitive advantage.
As a result of the flexible licensing terms we offer our customers,
specifically the right to receive software in the future within defined
product lines for no additional fee, we are required under accounting
principles generally accepted in the United States of America (GAAP) to
recognize revenue from our license agreements ratably over the license term.
For a description of how ratable revenue recognition has impacted our
financial results, refer to “Results of Operations” within Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations (in the CA 10-K).”
Our Business Model is one aspect that exemplifies our commitment to helping
our customers receive ongoing value from our software. In addition, our
professional services organization offers customers a single point of
contact for all their installation, integration, and ongoing maintenance
needs. Customer Advocates maintain customer relationships, identify possible
areas for additional education or services, and help ensure that customers
maximize the benefits of the licensed software. We have begun adding Sales
Specialists (sales persons who focus on a single product area, such as
storage management or security management) and Account Directors (single
persons responsible for overall account management of specific customers) to
enhance the sales and customer satisfaction process.
We compensate many of our employees based upon improvements in customer
satisfaction, as measured by independent customer satisfaction surveys.
In addition to investment in research and development, we support our
customers through the following means:
• CA Technical Support — We have highly skilled customer response
specialists who provide quality assistance online or over the phone, 24
hours a day, 365 days a year.
• CA CustomerConnectSM — Customers can order and download software products,
update their account information, and obtain support or assistance at any
time through our website, customerconnect.ca.com. We have approximately
15,000 registered users on CustomerConnect. As part of CustomerConnect, we
offer “SupportConnectSM,” which provides web-based problem diagnosis,
program fixes, access to our customer support databases, and other sources
of information.
• CA Technology Services™ — Our pre-sales technical and post-sales
professional services organizations were combined in April 2003 to form the
CA Technology Services organization. The CA Technology Services organization
offers customers a single point of contact for a broad range of pre- and
post-sales services, from education and training to consulting and
implementation. Our post-sales service engagements focus on our software
products, helping us to ensure that our customers receive the highest level
of satisfaction.
• CA Education — Our education programs are designed to help our customers
gain better value from our software. These programs are available at
customer sites, CA Learning Centers, and through computer or web-based
programs.
Competition
The markets in which we compete are marked by rapid and substantial
technological change, the steady emergence of new companies and products,
evolving industry standards, and changing customer needs. Some of the
factors with which our products compete include, but are not limited to:
performance, quality, breadth of product group, integration of products,
brand name recognition, price, functionality, customer support, frequency of
upgrades and updates, manageability of products, and reputation.
We compete with many established companies in the markets we serve. Some of
these companies have substantially greater financial, marketing, and
technological resources, larger distribution capabilities, earlier access to
customers, and greater opportunity to address customers’ various information
technology requirements than us. These factors may provide our competitors
with an advantage in penetrating markets with their products. We also
compete with many smaller, less established companies that may be able to
focus more effectively on specific product segments or markets. We believe,
however, that the breadth and quality of our product offerings provide us
with a competitive advantage in the marketplace. We compete with many
software providers across our six product areas. Some of our competitors
include:
• Infrastructure Management: BMC, HP,
and IBM
• Security Management: IBM, Network
Associates, and Symantec
• Storage Management: EMC, IBM, and
VERITAS
• Application Life Cycle Management: Embarcadero, IBM, Serena, and Sybase
• Data Management and Application
Development: Compuware, IBM, and Oracle
• Portal and Business Intelligence: Business Objects, Cognos, IBM, and
Oracle
Ticker
CA
Asset Management Software - Category
Directory
Data Management Software - Category
Directory
Data Management Software Companies in the Directory
BMC
Computer Associates
Veritas
Asset Management Software Companies in the Directory
Altiris
Computer Associates
Datastream Systems
MRO Software
Peregrine Systems
Remedy
Security Software Companies in the Directory
Check Point Software
Technologies
Computer Associates
Cyberguard
Internet Security Systems
McAfee
NetIQ
Secure Computing
Symantec
Trend
Micro
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