CA prepares to fly high again

Turbulence is something that the majority of travellers expect when taking a long-haul flight, but CA has experienced more turbulence over recent years than even the most bumpy flight across the Atlantic.

This ranges from the attempted overthrow of the CA board by Texan billionaire Sam Wyly six years ago, to the much documented accounting scandal in 2004 and the 12-year jail sentence awarded to former chief executive Sanjay Kumar last year.

So it was a slightly more battered and definitely humbled CA that appeared in front of delegates at the Venetian Sands Expo and Convention Center in Las Vegas last month – but one which was determined to give the message that it has finished licking its wounds and is focused on progressing onwards and upwards.

Chief executive John Swainson said in his keynote that rebuilding a culture based on integrity, accountability and honesty were a key priority for his team going forward (CRN Online, 23 April).

“As senior management we are obligated to lead by example,” Swainson said.

The biggest theme running through Swainson’s keynote, however, was the need to eliminate the complexity associated with IT and the importance of CA’s Enterprise Information Technology Management (EITM) strategy, originally launched in 2005.

“We need to address complexity and provide better value and return on investment,” he said. “We are at a critical time in the industry. If we don’t help customers we risk losing their faith and confidence.”

However, CA’s relationship with resellers has been almost as turbulent as its internal goings on. Despite constant assurances, the vendor has still not managed to fully shake off its predominantly direct image and has a long road ahead of it to build trust and confidence from its channel partners. This was not helped by Swainson neglecting to mention resellers in his keynote.

But to show it is sincere about the channel, the vendor launched its latest indirect strategy at the event, and also announced that it would be compensating its direct sales teams in the UK and across EMEA for the first time, for any sales driven through the channel.

Bill Lipsin, senior vice-president of worldwide channel sales at CA, said: “Hopefully we can show the kind of commitment partners have shown us. We are trying to make sure we have strong partnerships at an equal level.”

Lipsin said that the vendor is looking to step up lead generation to help partners ramp up business, and has bolstered deal registration facilities via its partner portal, as well as improved marketing resources and rewards schemes for partners.

It has also launched a Partner Symposium to give VARs and distributors the chance to put their views across, and interact with other CA partners in different regions.

“We realise the channel is critical to CA’s success,” Lipsin said, adding that the channel will see a major chunk of the $600m R&D investment planned for its next financial year.

“We want to minimise channel conflict as much as we can. We are fixing things internally and externally, but we are not going to stop. We don’t want to get complacent,” he said.

Similarly, to further cement its commitment to partners, the vendor unveiled its new mid-market unit, aimed at firms with 500-5,000 employees, which will be fulfilled exclusively through the channel.

Bob Davis, senior vice-president and general manager of mid-market and storage, will head up the unit, which the vendor has claimed will generate a $10bn market opportunity with 66,000 potential customers for partners to share worldwide.

“There will be no direct sales in the mid-market,” Davis said. “This is a partner-dedicated part of the business. The expectations of these end-user customers are the same as enterprises but they expect them to be delivered in a different way.”

The vendor is also planning a channel spring clean in EMEA to ensure only the most focused partners receive the right benefits (CRN, 30 April).

Ned Jaroudi, vice-president of partner marketing at CA, said: “A higher percentage of our business in EMEA is indirect. The general message was that we want to get 30 per cent of our business through the channel in the next three years, but EMEA is already there due to its fragmented geography.

“We are trying now to look to share best practices across the whole geography. Lots of pieces of the puzzle we have developed in EMEA will now be implemented in the wider global channel programme. It is a very exciting time for CA because it means we can deliver what we promise.

“We are going to do a deep dive in EMEA on the channel partnerships that we have. The goal is to move more partners up revenue bands, but also weed out the ones that have done very little business for CA,” he said.

There are also changes afoot in the UK. The vendor has hired former Dell executive Mike Feltwell to oversee its whole indirect route to market in the UK market (CRN Online, 1 May).

Mark Bridger, vice-president and regional manager UK and Ireland at CA, said: “[Feltwell] will have a single view of the whole indirect channel and he will be responsible for that area of the business, as well as the public sector in the UK. Between 75 and 80 per cent of our public sector revenue goes through system integrators and partners in the UK.”

Bridger admitted the vendor still has work to do where the channel is concerned.

“In the past our UK story has been fragmented, but now we have someone that will look after the UK side of the business,” he said.

“In the UK at the moment we are around 15 per cent indirect, but we are looking to increase that over the next two years. But we have to be pragmatic over how we achieve this and have to do it in sensible stages.”

However, the message from the other side of the fence was that the channel needs to see results, to convince it that CA can walk the walk as well as talk the talk.

Clive Longbottom, service director at analyst firm Quocirca, said Swainson had done a good job so far, but still has a steep hill to climb.

“John Swainson is only too aware of how the multiple clouds of CA’s history have been holding them back,” he said. “He has had to carry on restating revenues during his term in office, just to put right the problems that his predecessors created. This has led to a deep distrust in the market around what CA’s capabilities are and to the long-term future of the company. Swainson has put a lot of effort in facing down their perceptions with a deal of success.

“However, he also knows that CA cannot depend on its historic base for support – the mainframe community is now stable and has incumbents fulfilling their needs. To go only for large organisations also faces the problem of the high levels of penetration of incumbents. However, a high-touch model for the mid-market is a sure-fire way to go out of business, and so a channel approach is needed. Going hybrid is no good – the channel has been bitten too many times by that before. So Swainson’s main problem will be demarcating the line between what he sees as being the channel’s customer, and what will remain as a high-touch, direct CA customer.”

Dave Simpson, sales and marketing director at VAR Softcat, said: “CA is still a significant software vendor and anything it does that engages with the channel more is a positive thing. Historically CA has always had a mixed relationship with the channel, but anything that can move this relationship forward is welcome.

“We are definitely looking to re-engage with CA. It is one of our top 20 vendors and the fact that it is compensating its direct sales teams will definitely help the channel.”

Stewart Hayward, commercial director of WStore, said: “CA seems to have an announcement every year and I think this time the sentiment is right – that the channel has a role to play in its business. But it still has that direct push.

“We believe it should put a bit more focus into the channel rather than just trying to cut costs. The channel likes a consistent message and we would like CA to prove its channel sentiment over an extended period of time.”

CA launches first mid-market focused division