Computer Associates reassures customers

Computer Associates officials at CA World, the company's annual customer conference in Las Vegas, were keen to reassure customers...

Computer Associates officials at CA World, the company's annual customer conference in Las Vegas, were keen to reassure customers that CA is ready to move on from the accounting turmoil of the past few months.

"CA World 2004 marks the beginning of a new chapter for this company," said interim chief executive officer Ken Cron. "I'm here to tell you that I'm committing CA to the highest standards of fiscal discipline and integrity."

CA has recently been under an uncomfortable spotlight as the US Securities and Exchange Commission and Department of Justice neared the end of investigations into a multibillion-dollar accounting fraud at CA. The scandal's fallout has led to criminal charges against four former executives and the forced resignations of more than a dozen management employees.

Sanjay Kumar, who stepped down from his position as CEO last month, is now chief software architect, a position Cron described as an envoy to customers.

CA's technology strategy will be led by a group including chief technology officer Yogesh Gupta, senior vice president of product development Mark Barrenechea and executive vice president Russ Artzt. 

 "In his position [Kumar] can take information from the customers and bring it back, and with the other three create the [technology] team," said Cron.

Kumar reports directly to Cron and supervises no staff other than administrative employees. It is a position that will allow Kumar to continue carrying out the strategic plans he helped draft, executives said - but it is also one that leaves him organisationally isolated, an arrangement that could prove useful if CA needs to further distance itself from its former leader.

He claimed to be adjusting well to his new role: "I'm not the CEO of the company, that's very clear. A lot of people wonder, how do you make that transition? I care so deeply about this place - unless you understand how deeply I care, it can be hard to understand how I can kind of flip my hat and say, 'It doesn’t matter.' Ken will decide some things differently than I would have. That's perfectly cool with me."

In a wide-ranging interview, Kumar, Cron and chairman Ranieri portrayed CA as a company with a deep executive team continuing to carry out a steady product development and customer service plan. In the three weeks he has held office, Cron said he has met with 20 of CA's largest customers, all of which expressed satisfaction with the company's execution.

In general, customers were happy with the service improvements the company has made in recent years and supportive of the steps it has taken since the accounting scandal came to light, Cron said. No customers have asked for price breaks or more flexible licensing terms in light of the company's corporate turmoil.

Cron declined to comment on the timeline of the company's search for a new CEO, but reiterated earlier comments that he is not a candidate for the permanent job. CA is also searching for a new general counsel, to replace the one it ousted in connection with the accounting investigation, and a new CFO, to replace Jeff Clarke, who was promoted to chief operating officer soon after being recruited.

One partner attending the show, NIIT Technologies products and services head Jurgen Niegengerd, said CA has made great strides in the past year to improve its sometimes rocky relationship with its partners.

"I was wondering about the new CEO, but I think the good changes will be continued," said Niegengerd.

Several customers said they were curious to hear how Cron would address the accounting fraud and management overhaul. Joe Egger, of First Data, said he was pleased Cron dealt forthrightly with the issue. Egger came away with a positive impression of the new CEO, and of CA's corporate direction.

First-time CA World attendee Beatrice Sirchis, head of the computer security department at Israeli telecom Bezeq, said she appreciated hearing about the depth of CA's product portfolio and planning. The company's  accounting problems and management turnover did not concern her. "As long as everything is going okay with the products, we don’t mind any changes. It's an internal affair," she said.

Stacy Cowley writes for IDG News Service

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