CA remaking itself in IBM"s internal image

Von Matt Hamblen

John Swainson, who was brought in to run Computer Associates International Inc. two months ago, is restructuring the software maker along the same business-unit lines used at IBM Corp., where he worked for 26 years before joining CA.

Swainson, CA"s president and CEO-elect, revealed the restructuring in an e-mail to employees on Jan. 21 and discussed it in a conference call with financial analysts last week, after CA reported its third-quarter results.

The business-unit structure "has proven itself as an industry model for how to distribute products," Swainson said. The internal changes will "make us more effective from a development point of view and more aligned with marketing and sales," he added.

Few details of the new structure have been revealed, although a CA spokeswoman said that the reorganization will give product development executives responsibility for profits and losses companywide. The new units would focus on a broader range of products instead of just a single software brand, she said.

The business units will presumably create packages of products and ensure that the bundled software can work together, said Mark Ehr, an analyst at Enterprise Management Associates Inc. in Boulder, Colo.

"Conceptually, different parts of CA would work together as a team, while right now, very little cross-collaboration goes on," Ehr said. "From my personal experience, you can have a salesperson go really into detail on their own brand with very little visibility into other things CA sells. This will break down the fiefdoms."

The business-unit concept sounds like a positive development, said Jeff Jenson, an information systems analyst at United Defense LP in Arlington, Va. "Since IBM has been around a long time and has done really well, maybe it makes sense," he said.

United Defense uses CA"s Unicenter Desktop DNA software and is doing research on some of the vendor"s other products. Joe Loobeek, lead information systems analyst at United Defense, said in a separate interview that having CA"s product units working in better harmony could only be advantageous for users. "If the business units are friendlier and not as cutthroat, it would be good for customers," he said.

But Harry Butler, support center manager at electronics supplier EFW Inc. in Fort Worth, Texas, is less concerned with the reorganization than he is with CA"s products and customer service. "They can change everything they need to in their corporate world, and if they keep providing me quality products and extreme quality of service, that"s my bottom line," he said. "If they don"t provide that, I"ll find another vendor."

In his e-mail to employees, Swainson said CA co-founder Russell Artzt was named executive vice president of products as part of the reorganization. Artzt has been running CA"s eTrust security software unit, and he will continue serving as head of that operation. But all product development units now report to Artzt, Swainson said.

Mark Barrenechea, who had been CA"s top product development executive, was named executive vice president of technology strategy and chief technology architect. Swainson said Barrenechea will work with him and Chief Operating Officer Jeff Clarke to "take the lead role in driving CA"s technology and merger and acquisitions activity."

Ehr said Barrenechea"s new job indicates that CA "is moving into an acquisition role" more so than in the recent past, when it was dealing with an accounting scandal that led to the ouster of former CEO Sanjay Kumar.