Q&A: IBM's Steve Mills on CA, the Sun/Microsoft pact, outsourcing

The head of IBM's Software Group calls CA's legal problems 'pretty serious'

By Don Tennant

April 20, 2004 12:00 PM ET

Computerworld - HAWTHORNE, N.Y. -- Steve Mills, senior vice president and group executive in charge of IBM's $14 billion software business, spoke with Computerworld yesterday about recent developments on the competitive landscape, including the government investigation of rival Computer Associates International Inc. and the accord between Sun Microsystems Inc. and Microsoft Corp.
Excerpts from the Mills interview follow. A later interview with CA's Mark Barrenechea, senior vice president of product development, is also available online (see story).
What do you make of CA's legal problems, especially now that CEO Sanjay Kumar is under scrutiny? All of these things are focused on individuals. If there's a management change, I would suspect they would continue to deliver the products they're delivering now. That's not likely to change in any way. The question is, Will the players change? That's anybody's guess, but it obviously appears pretty serious.
Would a change of players have an impact on IBM in any way? We deliver a very rich set of products to replace CA products, so customers who were losing confidence in the company could certainly turn to IBM for alternatives.
Are you using CA's legal problems as a sales tool to lure CA users to IBM? CA does enough on their own, independent of what the government is doing, to create opportunities for us. We don't need the Department of Justice to help us build that business. CA has a very mixed reputation with customers. CA tends not to make new investments in any of these mainframe-based products. There's a lack of add-ons and features and updates -- they don't keep pace particularly well. We find many businesses want to get off of CA tools.

Steve Mills, head of IBM's Software Group

Do you think you beat CA to the punch by acquiring Candle Corp. (see story)? Candle is a major provider of tooling on the mainframe. The disposition of so many companies that were started up in this area has not necessarily favored IBM. They'd get acquired by Computer Associates, and Computer Associates just wants to charge the customer a lot of money and not give them any incremental value. We've watched this movie replay itself over and over again. So we have a lot of concerns about what happens to some of these modest-size independent providers of tooling for the mainframe.
We've been increasing our mainframe-related software spending, in some cases to provide an alternative to those vendors that were overcharging customers for a utility-type function. So the Candle acquisition obviously very much falls into that

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