CA chief welcomes industry consolidation

LAS VEGAS, Nev. – Consolidation is good for the IT industry, said Sanjay Kumar, both for vendors and ultimately customers.

The president and CEO of Computer Associates made the statement both at his opening keynote for CA World 2003

here Sunday evening and that morning in a Q&A session with Canadian journalists. Kumar said there will always be room for small, innovative technology vendors, but that there’s little room for mid-market firms. He said the potential Oracle acquisition of PeopleSoft (which wants to acquire J.D Edwards) makes sense.

“”I’m a fan of consolidation. I think the industry has to and will consolidate. We’re going to be like any other industry.”” Kumar said the scope of the industry is changing and that integrated suites will be more important than ever before. “”Point solutions will play second fiddle.””

He said customers are telling CA they want simpler solutions and less complexity. “”The IT industry is really under pressure to perform,”” he told 10,000 attendees. “”You are being forced to justify technology investments with hard ROI numbers.””

Kumar said technology people have not done a great job in the past of explaining the payback of investing in IT. “”I think we are pretty weak at that.

“”To get new technology dollars, technology people are going to have to show alignment,”” he added. “”It’s good for the industry.””

While Kumar acknowledged times are still tough for vendors, he said the glory days aren’t gone; business models simply have to change. “”The IT environment is not going back to the way it was pre-2000.””

Kumar said CA has made big changes operationally, culturally and economically in the channel. In the past, CA functioned on a hybrid strategy of direct and indirect. Today, Kumar said the company works on a channel-preferred model.

At the show, CA will ask its channel partners to handle multiple product lines. One new product will be eTrust Vulnerability Manager, which was released here Monday. “”It is a great product but product that partners will be able to build services business around,”” Kumar said. However, one of his concerns is the lack of security-focused VARs in the market place. “”With the security channel business there is no hardware there. It is about expertise and services, which is something that is not a natural place for (VARs),”” he said.

CA is trying to help build this channel, he said, and eTrust Vulnerability Manager will be one product that is ready-made and pre-packaged for the channel.

“”Part of the strategy is to get people jump-started in that business. Partners are reluctant today to start in this business. They think they will end up competing with the Big 5 or the Big 8 consulting companies. They are very nervous about it, but what they don’t realize is that there is so much opportunity here,”” he said.

Kumar added that CA needs partners to cover this market place especially in the mid-market because the company does not have the resources necessary.

Also at CA World, Kumar said that the company would be more stringent in the way they deliver leads to partners.

“”We are going to get tougher in following up (leads). Today, we give you a lead and we don’t follow up. Tomorrow, we will give you a lead and call you and ask you if you want it. If you don’t respond we will call again and bug you. And, a week later we will call and if you don’t want it we will take it and give it to someone else. Those leads cost a lot of money. We are enhancing a lot of things for partner profitability because it is all about their bottom line.””

— With files from Paolo Del Nibletto

Comment: info@itbusiness.ca

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