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CA narrows strategy and sells off apps

Computer Associates disclosed that it has sold most of its manufacturing and business applications to SSA Global Technologies, a long-struggling company that previously was known as System Software Associates.

The deal includes the supply chain, finance and human resources product lines from CA's interBiz division.

CA officials would not comment in detail or disclose the purchase price. But chief executive officer Sanjay Kumar foreshadowed the deal during a February interview, saying that the interBiz applications needed "more critical mass" in the market than CA had been able to achieve.

The sell-off could benefit companies that use such interBiz products as ManMan, Masterpiece/Net and PRMS, users and analysts said.

Warren Smith, IT director at the Victor Reinz division of car parts manufacturer Dana, said CA has had trouble focusing on its core software products while also trying to maintain the ageing interBiz applications.

Victor Reinz, which makes vehicle engine components, has used the ManMan manufacturing software since 1986, long before CA bought the interBiz applications in a series of acquisitions.

The sale to SSA "will be a good thing for us," said Smith, who is also president of the Computer Applications for Manufacturing Users Society International, a user group.

Bob Anderson, an analyst at Gartner, said that interBiz never really fitted with CA's overall strategy or its other product lines. The applications should "be a substantial part of SSA's business going forward", he said. "They were kind of on the back burner with CA."

SSA, which was bought two years ago by a turnaround firm, said it hopes the interBiz applications can help it regain the lead in vertical industries such as automotive and consumer goods.

The company expects to lay off about 325 of the 725 interBiz employees who are being shifted from CA as part of the deal, said SSA CEO Mike Greenough. But he said SSA is making a "very clear" commitment to extending the life of investments made by interBiz users.

CA said revenue for its fourth quarter ended 31 March will total about $770m (£53m), in line with earlier predictions, but that it will report a sixth straight quarterly loss.

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