Sanjay Kumar, the CEO of Computer Associates International Inc, and the man who this week was also made chairman after founder Charles Wang announced his retirement, said that his appointment to the role had been planned for some time. In an exclusive interview with ComputerWire, Kumar gave a sneak peek at the systems, security and storage management giant’s product roadmaps, and also said that major acquisitions are highly unlikely in the next 12 months.
Kumar said that on the product development front, there will be a service pack upgrade to the company’s flagship Unicenter systems management suite in the next few months, which will add support for a range of emergent web services standards, and also dramatically extend the suite’s support for the management of wireless devices.
Of his appointment to the chairman role, Kumar said: Anyone who knows Charles [Wang] knows that once a decision has been made it stays made. He wanted an orderly transition and this is what we have been doing since I became CEO in 2000. He said that there was no particular reason for Wang’s choice of timing, but that he had himself been flying solo for a year-and-a-half already, running the company operationally and defining its strategy.
Kumar denied that Wang had resigned his post as chairman because of the stresses the company has been put under in the last year. CA is the focus of investigations by the Securities and Exchange Commission and US Attorney’s Office into its financial accounting. It also only narrowly avoided a second consecutive proxy battle with the $10m pay-off of dissident shareholder Sam Wyly, the former CEO of Sterling Software Inc, which CA acquired for $4bn in March 2000.
While Kumar conceded yesterday that the pay-off of Wyly was controversial and had been questioned from a corporate governance standpoint, he maintained that the decision was in the interests of shareholders since the $10m paid to Wyly was considerably less than the cost of the first proxy battle – $15m – to CA. Corporate governance means at every opportunity and turn, the company, its board and I do the right thing for shareholders. Good governance doesn’t mean everyone has to agree with me, he said.
Kumar also said that acquisitions on the scale of its $4bn Sterling Software buy and its $3.25bn June 1999 acquisition of Platinum Technology Inc are extremely unlikely in the next 12 to 18 months. He said that the company is focused on serving its existing customers, and that large acquisitions steal too much limelight from the company’s product developments.
He also said that large-scale acquisitions give critics the chance to claim that CA cannot grow organically. It’s been two years, nine months and six days since we made a major acquisition, and look, we’re still growing, said Kumar. In its latest quarter ended September 30, CA posted sales up 5% over the year-ago period to $772m. But a continued lack of major acquisitions is a step-change for CA, which has grown through a plethora of large company purchases during its 26 year history.
As well as the upgrade to Unicenter expected in the next few months, Kumar said the company is likely to be able to bring forward the launch of its eTrust Security Command Center, which was originally only going to ship at the end of March 2003. Kumar said the product is already in beta testing and should be available early. He described it as a single console, or portal, for administering all security operations across an enterprise, including the administration of identity, threat and access management.
Kumar joined CA via the 1987 acquisition of database company UCCEL, and rapidly became Wang’s right-hand man. Wang founded Islandia, New York-based CA in 1976 with an initial staff of four people and a single product. The company now has over 1,200 products and a valuation of over $8bn, after countless large acquisitions. In 1994 Kumar was promoted to chief operating officer and president, and became the nominated successor to former CEO Wang. That position was attained in August 2000 in an accelerated promotion. While the timing of Wang’s retirement was unexpected, the confirmation of Kumar as his replacement could not have been a surer bet.