Time for Oil Change: New CTO for CA

Today CA announced a new CTO – an internal replacement. Alan F Nugent will be filling the office of CTO starting today.

He joined CA about a year ago; before joining CA, Alan held the role of a CTO at Novell. He had joined Novell in June 2002 where he was focusing on open-standards, cross-platform technologies, to name a few focal points.

His interview during his last days at Novell revealed some important insight into what he thought of Computer Associates before joining and his views on consolidating hundreds of products CA had at that time, about his views on using single database, on-demand computing.

Most of his works at Novell seemed relevant to what CA products were involved in, in the past few years and I can see the hype that the market has created about on-demand computing and simplicity of Enterprise management software. Recently, we have noticed a strong push towards supporting applications on Linux.

We all see major consolidation taking place in the market; companies choosing divestiture strategies all over to concentrate on just a few core competencies where they hope to be a leader in the market and maybe keep a cash cow that can keep funding the next rising star. The IT industry is getting competitive by the hour. Who knew with globalization the economies would get so intertwined and so interlinked that rising gold prices in one country, when the scientists at the Wall Street are sleeping, could affect NYSE the next day? This is leading to excessive pressure on the visionaries of large corporations to maintain a lead in their arena. Smaller players are as big a threat to them as the major competitors are.

Anyhow, coming back to this event, Alan’s appointment as CTO of CA, what does it imply to do an internal replacement for such an important post – a Chief Technology Officer for an IT company? How do you interview for such a post? What kind of questions do you ask? “What do you think about the SOA hype”? “Can you make us market leaders in Network Management”? I am wondering that because, we get very tough questions in our interviews… “What kind of data structure would you use for …?”; and one of the most irritating question that we usually get asked, “What is a virtual destructor?”

But in all honesty, I have respect for the position of a CTO – this one guy can change the future of a company and so many people associated with it in a small time span. He is the one who influences decisions relating to acquisitions, divestitures, mergers, strategic alliances, etc. I wonder what it takes to get there… I sure would like to work with that kind of responsibilities under my belt.

But what does it take to become a CTO for a company? What benefits does an internal replacement bring? I would think this means a better understanding of our present products portfolio – their strengths and especially, weaknesses – which are harder to analyze when you come from outside. This could also help when you are looking to consolidate and working towards your vision to consolidate many CA products via the EITM vision. What a CTO can bring from outside could be a better understanding of how the market perceives your products, your strengths/weaknesses and your company as a whole.

In all, hope this change is one of the last ones for the top executives. I hope the administrators do not have to change the “About Us” page for a long time to come now. The Wall Street didn’t like this change for some reason, though (the stock was red today), but I am hopeful that this change will do us some good in the long term and with this oil change, CA is good to go for another year without major overhauling.

Associate This!

Why do we believe in GOD? Maybe because somewhere inside, there is a part of us who hopes that he/she is looking after us and making sure we see a fair mix of good/bad times.

My belief in GOD has started to wear down... working for CA (or Computer Associates, as it used to be called before some executives on the sixth floor of the corporate headquarters of this prestigious company figured a name change would do Computer Associate’s image some good), one of the largest software companies on planet Earth, you just hope that your patience isn’t tested every day when you come to work!

There was a small period of time when it seemed like the mess that our ex-executives created won’t haunt us now; but there seems to be some sort of voodoo on this company… its one bad news after the other (rather, news that appears bad to the Wall Street and to the media who need to spice up their columns with *hot* news).

I wonder what else can you, as a CEO do? You write down a not-so-vague vision statement for the company; streamline your management; provide a product-suite to the customers that’s hard to beat; grow products organically and by strategically acquiring products to fill voids; manage synergies between the companies and most importantly, execute these strategies well. There has been a huge change in management style since the former execs have left the CA building for good. But all the work that our CEO is doing for CA’s turnaround seems to be taking us no where. How long should you wait?

This begets the question – were our former execs that bad? There is some part of me who doesn’t blame our ex-CEOs for what they did. As I see it, the quarter to quarter reporting system creates the systemic greed. Who came up with these 4 quarters system – presenting numbers to the rocket-scientists on the Wall Street? Huge social losses are incurred when long term strategic projects are sacrificed to meet quarterly numbers. I tend to believe it puts more pressure on the execs to cook some numbers - especially when their bonus is closely tied to their ability to make those numbers. Plus, they tend to put a lot more energy on making these numbers meet than on future plans for the company, products, etc. That includes bell labs getting worried about quarter to quarter... can you ever invent transistors and mobile phones on a q2q basis? Forget it. That's why many small and medium sized firms end up remaining private even today - to reinvent themselves.

Several pundits argue that the financial architecture of Japanese companies allows them to invest in long term projects vis-a-vis American firms. It also allows Japanese firms to recover from bankruptcies without causing massive public pain. The other side of the story is of course the much touted Schumpeter's creative destruction. Pundits must not forget however that Japanese financial architecture can't survive in American Social architecture.

The Wall Street is a concentrated reflection of American society - driven, everyone to themselves, achievement oriented (which means money in America; in not-so-capitalistic-yet countries like India, it has more social dimensions), premium on youth, speed ... all of it. It isn't the CEOS that are greedy, it's everyone else too. Democracy is about awareness. As long as common junta like us remain passive and do not take active voting interest in electing quality directors, CEOs will continue to fleece them. Investors have delegated voting rights to institutional investors which allows CEOs to create sucker boards. It's amazing how much corporate dictatorship there is in an otherwise democratic country, all thanks to the "burger and gas and who cares what else" mindset.

Is this one of the hidden prices you pay for being in an aggressive capitalistic society? Anyhow, I think I will touch upon this later, someday.

For now, I feel CA needs to invest a lot more in R&D than it does currently. Microsoft, Oracle and CA spend about 24%, 20% & 20% of their operating expenses on R&D, respectively (based on 12 month data ending 05/31/2005). Looking at this, it might seem that we are on par with industry standards but to gain an edge in this market, we can not rely on older technologies and can not ride on old horses that have been keeping CA’s hopes to be a leader, alive. We need a, what they call in strategy classes in business schools, leap-frog approach to tackle the recent fiascos in CA’s management and to make up for the greed and unethical acts of some former CA execs (for which a lot of people have to pay).

CA has been doing the right things; we have hope from our management; we are acquiring the right companies – filling up voids in our product suits by offering relevant products to customers (more of this will come in news soon); can this CA management re-instate my belief in GOD?

The question I ask myself (and I hope you can answer), if you did not have the social/psychological investments with this company & the surrounding social framework (as I have), would you want to associate yourself with this company?