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Q&A: CA's Barrenechea discusses management reshuffle, rebuts IBM barbs

He fired back at IBM's Steve Mills, calling him 'the VP of afterthought'

By Don Tennant
April 23, 2004 12:00 PM ET

Computerworld - Mark Barrenechea, senior vice president of product development at Computer Associates International Inc., took issue with statements made about CA earlier this week by Steve Mills, senior vice president and group executive in charge of IBM's software business, in an interview (see story). Barrenechea spoke with Computerworld yesterday to rebut those comments and shed some light on the situation at CA in the wake of the ouster of CEO Sanjay Kumar (see story).
Sanjay got a lot of the credit for improvements in customer satisfaction at CA. Why shouldn't users be concerned that with him out of the CEO position, CA might slide back into its old ways? First and foremost, Sanjay is still at CA, very much in the Microsoft model, where he'll be freed up to be our chief software architect. That is a wonderful thing for customers. Sanjay is a brilliant, innovative, motivating individual. It's very much the Microsoft model of freeing up our best talent to focus on adding value back to customers.
We also have 16,000 employees who are working every day on software to deliver value back. We're just focused on software. Our Q3 results were phenomenal. The organic growth of our business increased 42%. Kind of unprecedented in software.
How would you characterize the mood at CA in the wake of Sanjay stepping down? I would describe the mood overall [in terms of] the market we're in and the opportunity. If you look at what happened in calendar year '03, there were more licenses purchases by CIOs in management [software] than in apps. In fact, it was bigger by 56%. I'll tell you, that motivates 16,000 people to stay focused on the business, because this is the hottest segment in software, and we are the leader in that segment. So I would describe the mood [by saying] that we're focused on business.
But specifically with regard to not having Sanjay in the role of CEO -- has that changed the mood in any way? I emphasize the positive. If I can get Sanjay's time every day to help me build product, it's a good day.
Has your role changed in any way as part of these management changes? No. I lead all of our development and customer support.
Do you expect it to change? No. I'm focused on building our products and providing the value.
Do you think it's important for Sanjay's replacement to come from within CA's ranks in order to keep the customer satisfaction momentum going? Not appropriate for me to comment on that.

Computer Associates' Mark Barrenechea
Computer Associates' Mark Barrenechea

Some IT and financial analysts have put Steve Mills on the list of potential replacements for Sanjay. What's your response to that? Let me put that in perspective from what I see. IBM in fiscal year '03 did $90 billion in total revenue. [IBM's] software business did just under $14 billion. So 16% of IBM's revenues are software. Software is an afterthought at IBM. It's all about global services and hardware. [Mills] is the VP of afterthought.
Mills suggested that CA isn't particularly innovative. What's your response? I've been here at CA now for close to a year [following a move from Oracle Corp.], and I find the organization one of the most skilled and innovative I have seen in the industry. When you look at our Q3 results, we grew 42% in subscription licenses. When you look at IBM's growth [for its first quarter] that they just announced recently, you [adjust for] currency, they grew at 3%. We are the world's leader in management software. We continue to innovate in security, operations management, life-cycle management, storage; and innovate in this new segment called IT service management, which is managing business processes and the financial administration of IT.
If you compare our innovation to IBM's, IBM has a long history of failed attempts. We can look at OS/2 not being a successful operating system. We can look at SNA losing out to IP. We can look at Lotus losing the e-mail, Word and Excel battle.
When I asked Mills about IBM's acquisition of Candle Corp., he said CA has a history of acquiring companies like Candle and "just wants to charge the customer a lot of money and not give them any incremental value." What's your response? Candle is a very interesting acquisition in IBM's history. The mainframe just celebrated 40 years of being in the marketplace, and after 40 years IBM couldn't get performance management right. So they had to go out and buy Candle. We've done wonderfully by automating some of the world's top data centers with CA-Sysview and CA-OpsMVS. We're very much recognized [for] and pleased with the value we provide our clients.
Did CA ever look at Candle as an acquisition target? No. The value we're bringing to clients today around Sysview and OpsMVS is unsurpassed. It amazes me. When you look at IBM, they own the hardware -- the mainframe -- they own the operating system, they own the compilers. They have 90% to 95% share. And after 40 years, they couldn't build performance management like [CA's Unicenter] NetMaster. So we never looked at Candle. We weren't interested, and we're still not interested.
Do you ever feel like you jumped from the frying pan into the fire when you moved from Oracle to CA? I've gotten used to walking on hot coals. When you have a vision and belief and you stick to it, some people call it arrogant. I call it passion. And I'm very passionate about the management segment, given the opportunity we see.


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