Sterling to be Swallowed by Even Bigger CA

News of the $4 billion bid by Computer Associates International Inc. to acquire Dallas-based Sterling Software Inc. took some Sterling users by surprise, but most are taking a wait-and-see stance.

"You can put me in the 'shocked' category," said Colt Johnson, director of technical support at J. Crew Inc. in Lynchburg, Va. "It's CA. It's good; it's bad; it's the big fish eating another smaller fish."

Switching vendors, if not tools, is a familiar experience for the catalog retailer. Software it uses to link SNA and TCP/IP systems came from Interlink Computer Sciences Inc., which was acquired by Sterling last March.

Overland Park, Kan.-based Universal Underwriters Group uses Sterling's Cool:Gen application development tools. "Other than the obligatory contract renegotiation, we don't expect sweeping changes," said R. G. Eaton, director of the solution support center at Universal Underwriters.

Users of tools from Islandia, N.Y.-based CA and Sterling could benefit from the merger, said Rich Ptak, an analyst at Hurwitz Group Inc. in Framingham, Mass.

"I just don't see any red flags for users on this," he said. "CA has a more complete product set (to offer Sterling users), while Sterling fills in some holes for CA."

Sterling and CA both tout storage, network management, application development and electronic-business tools, and analysts confirmed CA's claim that little overlap exists.

The CA development juggernaut will quickly integrate most of the tools.

"We want to get to CA World (the company's annual user conference in mid-April) with the integration done and the (applications) rockin' and rollin'," said Sanjay Kumar, CA's president and chief operating officer .

Look for integration of CA's neural network technology into Sterling tools, said Ron Wexler, an analyst at The Robert Frances Group in Westport, Conn. "Neugents are a key part of the CA strategy in whatever software" the company is developing or acquiring, he said.

Copyright © 2000 IDG Communications, Inc.

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