Kumar: Why users fear Computer Associates

At the CA World user conference in April, Computer Associates (CA) plans to introduce a customer relationship strategy that...

At the CA World user conference in April, Computer Associates (CA) plans to introduce a customer relationship strategy that company president and chief executive Sanjay Kumar says will "make or break careers in our company". In a candid discussion Kumar gives an insight into the customer relationship problems he is determined to fix once and for all.

To what do you attribute CA's long tradition of having such a combative relationship with its customers?

Number one, from acquisitions. They have been a great thing, and they have also been a thing that has introduced its fair share of contention. Why? You're the end user. You bought [a product from a CA competitor]. You grew to like the salesperson, you grew to like the company, you grew to like the support person - you made a choice, and you told your manager this was better.

Out comes CA, [which] didn't ask you whether it was OK to buy the company. One weekend, two guys did a deal, and the next thing you know, the product that you chose over the other guy's is now owned by the other guy.

Number two, we have had a longstanding policy of restructuring the acquired company immediately. I think it's the right thing to do. I don't like the idea, of going around the building and telling the acquired company, "Everything's going to be OK," and then cut a little. Tell them, "Everything is going to be fine," and cut a little. We have taken the big bang approach - we cut upfront, and [we're] done.

We have never had a second cut in any acquisition. But, let's face it - in one day, there are hundreds of people who have left the company. Some don't have nice things to say about you; some go to work for competitors. Competitors hire them en masse to create a force to compete against CA. That's how Legent was created. And Legent went around and said, "We're the alternative."

Well, it didn't work out that way [CA acquired Legent]. That wasn't a hostile deal. It was a friendly deal - they wanted out. Platinum [which CA also acquired] was the same way.

Platinum Technology International was an interesting case, because some Platinum customers actually had it written into their contracts that they would be paid up to three times the value of their contracts if Platinum was ever acquired by CA.

We didn't pay a single person - not a single one. The reason is every customer has come to us and said that's not the basis on which they want to do business. [For] one of them, the amount was over $75m [£52m]. Admittedly, we've had a few discussions - not every one has been an easy thing.

What, in your view, is the concern that these companies had about an acquisition by CA in the first place?

It is the momentum that people create. You have Legent going out and saying: "CA buys the products, they milk them, they don't enhance them, they fire everybody." Platinum comes in and says, "We're the alternative to CA, we're kinder, we're gentler, and we're different."

It's the perception you paint in the marketplace. And let's face it - we were not very savvy and not very smooth in how we dealt with the press and with the market.

Do you think there has been a shift in CA's culture and attitude since Charles Wang stepped down and you took over as chief executive?

I think we've all grown up. I think if you talk to Charles today about the company, I think he would see things very much the way that we're talking about them. He would say: "Often we were very black and white about things." You often hear about CA holding to the letter of a contract [at the expense of working more cooperatively with the customer]. I think it's that kind of behaviour [that caused problems]. At one time, we had many, many pieces of customer litigation. We didn't lose any.

CA is talking more about partnering now. Is it your strategy to partner rather than acquire as a means of avoiding the problems you've had in the past?

I've said for a year and a half there will be no big deals. You can never say never as a public company - there may be an opportunity that comes up that's so strategic that you've got to do something. But it is a conscious strategy shift to partnering and internal growth

The other dark side that people don't talk about - take, for example, Platinum. Platinum had technology they were selling for which there were no software developers working on them. The products were frozen. So we pick them up, we publish a nice little white paper because everybody wants to know what's happening. I point out in the white paper that the product ain't going anywhere. And people go: "That son of a bitch". This is what happens. That's a tough hurdle.

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