Computer Associates (CA) has today announced a corporate reorganisation involving a change of chief executive and a plan to spin off parts of a business it has spent years - and billions - bringing together.
The software vendor's current president and chief operating officer, Sanjay Kumar, has been named as the new president and chief executive officer, while Charles Wang, CA's founder, will step down as chief executive officer but will remain company chairman.
The move follows disappointing first quarter results, which were blamed on weak mainframe software sales and a poor performance in Europe.
The change of leadership has been accompanied by a corporate realignment, which will focus CA on what it has identified as its "core businesses". These include security and storage management; networking, event and performance management; and application development and business intelligence, which includes CA's Neural Network Agents (Neugents) technology.
"This announcement reflects our emphasis on driving CA to be more efficient and customer-focused, and to heighten awareness of CA's core strengths and innovations," said Kumar.
Mitul Mehta, managing director of independent analyst Tekplus, said the vendor is repositioning itself from offering legacy products to a business model better suited to the delivery of software as a service, which involves building partnerships.
Jim Fagan, chairman of the CA Unicenter User Association, said that the reorganisation around three technology divisions does not detract from CA's strategy of delivering a complete software infrastructure, tied together by a management framework.
"Effectively, CA have tried to create some focus to their business, which is particularly needed with the number of acquisitions they have made," said Fagan. "However, having had this reorganisation they have failed to inform the user community about how it will help them."
In a turnaround in strategy after years of acquiring businesses, CA has announced that it will spin off companies whose technology it judges would thrive better as part of an independent firm.
As the first step in this strategy, CA today announced the formation of iCan-ASP to service the application service provider (ASP) infrastructure market. The vendor plans to ultimately spin off its desktop accounting business, ACCPAC, and other businesses over time.
CA has retained investment bankers Credit Suisse First Boston and Morgan Stanley Dean Witter to advise on these activities.
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