Q&A: CA CEO John Swainson

Las Vegas in mid-November is unseasonably warm, with the temperature touching the high 20s out on The Strip.

The spectacular site of Caesars Palace and the few dingy remnants of the city's mob-ruled past may remind more perceptive visitors that even the mightiest empires can crumble, or simply outstay their welcome.

For the past three years this city has played host to CA World, the annual conference of the company known until today as Computer Associates – now officially CA, as most people have know the company for some years.

At times during that three-year spell, riddled with hostile takeover talk and accounting scandal, you could have been forgiven for thinking CA was another empire-of-sorts running into more than its fair share of trouble. But in the belly of the Venetian Resort and Convention Centre, silicon.com caught up with CA CEO John Swainson, presiding over his first conference, who told us the days of such speculation are now finally in the past.

silicon.com: Around this year's CA World you've announced a new management team, a raft of new products, the spinning off of Ingres, new regional structures and even a new name and logo. To what degree are you saying that everything to date has been wrong?
John Swainson: That's not what we're saying at all. We've used this event to highlight our new products many of which were in development before I even got here.

We're attempting to set out a vision for what we're doing and we're trying to communicate that to our customers and our partners.

As for Ingres, we simply weren't able to dedicate the energy to Ingres which we thought it deserved. As such we've put it in the hands of a company who can do that.

And the new logo and new name? There are inevitably going to be suggestions that it's symptomatic of style over substance.
It's symbolic and as such I admit it's not hugely important. We could have delivered on our vision and enjoyed the success I envisage with the old logo and name but it's symbolic of a new start.

I'm sure you'd rather focus on the future but do you think you'll ever be able to move away entirely from talk of hostile takeovers, and latterly the SEC investigation, which have dogged CA over the past four or five years?
We're trying to concentrate on our customers and not get hung up on any of that stuff. It is part of our past and there's no hiding from that but time always helps. Clearly, demonstrating a different set of behaviours and living up to that will help.

How long did it take you to identify what the problems were at CA that needed to change?
The first 90 days were spent really in a heads down mode – looking at the company and the processes and talking to our customers. During that period from November [2004] to February [2005] I got a picture of where the company was.

By working with the organisation to find out what people thought needed to be done and listening to people, taking on their ideas and helping them articulate them we were able to make this a bottom-up process.

You've made some major personnel changes and a clear pattern has emerged. How conscious has the effort been to bring in former IBM staff? [CA chief marketing officer Don Friedman and Andrew Dutton, head of EMEA, head a long list of senior CA execs for whom IBM features very prominently on the CV.]
The management team had already been gutted by the board before I came along but it's not been conscious at all. There have been people like Don Friedman who had actually retired from IBM before coming to CA but there are a number of people who have worked at many top level IT companies, including Compaq, Dell and HP as well as IBM. It's not true to say I've consciously been back to IBM.

We have heard that CA will continue to make strategic acquisitions and continue to plug holes in its technology portfolio. In what areas do you expect to see such activity and how active is CA going to be on the acquisition trail?
Well I'm not going to give much away. But of course we're looking at our core areas such as enterprise services management, business services optimisation and security management and I think we will continue to see a number of mid-sized acquisitions and a number of larger deals each year.

You also seem to have a new-found desire to partner – what takes priority out of build, partner or buy?
I don't see build, partner or buy as part of the same equation. I don't believe in partnering for technology.

So it's telling that many of the partnerships you are announcing are with the integrators and consultants, such as Accenture and EDS, rather than pure-play technology vendors?
It's become essential to us to work with those companies. There are customers out there who are going to want a solution and they aren't going to think CA, they are going to go to Accenture or Bearing Point.

And how important is your relationship with Microsoft? It appears to be strengthening, judging by a glowing on camera endorsement from Steve Ballmer during last night's keynote?
Microsoft is one of the technology leaders in the marketplace. They are an extremely important platform for us to support and we're very interested in making sure our products are compatible with their platform.

It's become apparent that you are aware of the need to grow sales outside of the US and to catch up with other technology companies who now turn over more than 50 per cent of revenue outside the US. How difficult will this be?
It's true. Historically we've had that bias and we still do more than half our revenue in the US while a lot of other companies in this market do more than 50 per cent of their revenues outside the US. So we're looking at developing a stronger presence in emerging markets in Asia and eastern Europe as well as focusing on areas which are already strong for us.

And how big a part does China play in that strategy?
China is a territory that everybody wants to be involved in but it is also a very difficult country to do business in. For a start the infrastructure isn't very good and there has not been an acknowledgement of the important role of management and security solutions. But our go-to-market strategy wasn't very good either.

We have a small team there now and it's not a big operation.

You say you are now focusing on areas of the market which you can lead. Do you want to clarify what you mean, because these are some pretty competitive markets?
If you look at any technology market then there is always a disproportionate amount of profits which always go to one or two players. And I am looking at markets now where we can occupy those first or second spots, or perhaps a close third. If you want to do something then you want to do it well.

If you don't identify what you want to do well then you will end up doing a lot of things very badly. We've been far too diffused for too long, so we have narrowed our focus to four core areas.

For example our security business was the fastest growing part of our business last year. It grew by 50 per cent so that is one area we want to concentrate more effort on.

But security is an incredibly competitive market. Do you really believe you can occupy that first or second spot?
We've identified an area within the security market which we believe we can lead and that is identity and access management. Of course there are areas such as antivirus and intrusion detection and we have products in those areas but identity and access management is incredibly synergistic with the rest of our management offering.

Is it important that that's an area Symantec has publicly said it is not looking to get involved in?
Symantec can do what it likes. We've identified this as somewhere we can lead and the Netegrity acquisition has already given us the back end.

And finally, you're the third different CEO at three consecutive CA World events. How important is it that you now bring some consistency and longevity to the management of this company?
Technically I'm only the second. The other guy [Ken Cron] was only an interim but I take your point. Part of the credibility we are trying to deliver relies upon us showing consistency and an ability to live up to the vision we are setting out now.