Another Kumar may get some news again tomorrow...
One-On-One With Computer Associates CEO Sanjay Kumar
Kumar takes aim at Veritas
By Richard Cirillo, VARBusiness
7:18 PM EST Mon., July 09, 2001
CA is preparing to spend a large amount of cash promoting its new BrightStor family of solutions as part of an effort to overtake Veritas in the lucrative enterprise storage market. In an exclusive interview with industry editor Rich Cirillo at CA World in Orlando, president and CEO Sanjay Kumar outlines this idea and other plans.
"We, being number two in that marketplace, will absolutely focus on spending marketing dollars, marketing development funds, seminar partnership dollars and things like that to further our message there," says Kumar.
Kumar believes the storage market is currently one of the fastest growing segments in the IT sector. That's why it's important that CA now has the BrightStor product lineup to compete effectively against companies like Veritas in the enterprise storage space. He also believes the new offerings give solution providers and partners an unparalleled opportunity to provide clients with cross-platform, integrated solutions for managing critical data.
Specifically, Kumar says CA is prepared to spend $100 million this year on marketing campaigns for its products, though he did not say exactly how much of that will go directly to the BrightStor line. "That's a lot of money," says Kumar. "And that money is something that partners can ride on, because every time we advertise BrightStor, a BrightStor value partner and a BrightStor channel partner can piggyback on that."
VARBusiness: So how's business at CA? Any indications the economy has bottomed out yet?
Kumar: My general take is that the U.S. economy is pretty tough still. And I'm not sure anybody knows where bottom is. That's because you have two things going on as far as the technology business is concerned. One is the economy itself, and second is the fact that the technology business independent of the economy is going through some growth rate reduction. So the two things combined are putting a lot of pressure on the technology business. In the beginning of the year I think a lot of people thought that the bottom would be the end of the first half and the second half would be okay. Now, of course, the second half still looks tough for a lot of people. I think it's really tough to tell.
VB: A lot of the messages at CA World this week are around new product developments and releases around the CA brand names, including a new Unicenter suite of offerings, eTrust for security and BrightStor for storage. What's your feeling on where CA products are positioned right now in relation to the marketplace?
Kumar: The 'three-by-six' strategy that we put in place last year is there to really simplify our interactions with customers. It's to provide the kind of focus that we have talked about providing, and to provide the depth, if you will, to the 1,200 products that we have. It helps to provide some structure. And the four brands are the creative execution against those six focus areas. That's to give further definition when it comes to customers and the media and those things to help them understand. Then there's the way it will help us with customers. When we compete with an IBM, it's clear CA has to compete with IBM. But when we compete against a Veritas or someone like that, people have to identify readily the components of CA that are applicable. And the BrightStor brand is applicable. Of course CA is applicable as a whole because we can offer much more than Veritas has to offer. We can offer storage and enterprise management technology and security technology and things like that. But for the channel partners and solution providers we have, it's meaningful to them to say 'BrightStor' or 'eTrust' because they can easily categorize things, especially when it comes to external communication, for which the channel and solution partners are really critical for us in the coming year.
VB: Take us through that process of how the 'three-by-six' strategy developed. What was the impetus?
Kumar: Most of it came from an internal review of our business to figure out if it was easy for somebody to navigate the CA business. So we asked the question whether or not somebody on the outside--whether a customer, a partner, an analyst or a stockholder--could easily tell that we are focused on security. Or storage? Or enterprise management? For enterprise management the answer was generally, 'yes.' People knew us for that part of our business really well. But we found that other than enterprise management, people knew about CA but not necessarily the real definition that we wanted them to understand underneath it. That's the biggest reason we came around to this. Also, customers kept asking us to tell them where we are focused on for new development and new technology. They want to know repeatedly where we are focused on. To get people repeatedly focused on the six areas was good for us.
VB: Let's talk about channel partners. CA has obviously made some big changes to its partner programs this year, but tell me on a higher level exactly how the philosophy on partnering has evolved since you've been CEO.
Kumar: I think it has evolved over the years. We were a completely direct sales force at one time, other than maybe our accounting software, AccPac. We are one of the few direct sales software companies that have grown a partner business on the software side, and pretty extensively as a percent of revenue. So we've grown it pretty well. But if you looked at our partner business and talked to partners to say, 'Can you help us?' and 'Where can we help you?,' they can help us because they have relationships. They can help us because they are doing integration work in many customers. The traditional definition of partner has also changed because it's no longer an intermediary who is moving product effectively. They are delivering solutions and are adding value in a different way. So we evolved with that whole change, because customers are now looking for partners to come in and spec out technology changes or spec out opportunities to differentiate themselves. So it's very, very important for partners to understand all the different things we're doing and to focus on the six areas we are focused on so we can provide clarity. The new business model is also another area that we are focused on for partners, because now we have made it easier than ever before for partners to sell our products. They are in smaller, friendlier chunks than ever before, so it is much easier to sell this technology. Of course with new innovations like Unicenter 3.0, it's even easier for partners to implement. So partners can specialize in one or two pieces of Unicenter without having to specialize in all of it. In the past partners had told us that Unicenter was big and broad and they wanted to specialize in only one or two components. Now they are finally able to do it.
VB: During the press conference on Unicenter earlier today you had touched on that idea that this could potentially open up new markets for partners, specifically smaller businesses and companies looking for specific solutions
Kumar: The SMB marketplace is one that effectively, given the CA resources, we would never be able to cover like we need to. We just won't. Traditional partners and solution providers are very focused in that space.
VB: The three key messages you hit repeatedly in your keynote here were history, innovation and focus on value. How do they play into where you see CA moving right now?
Kumar: Twenty-five years is a long time in our industry, and not many companies have survived that length. So I think it's important to point out that when people think about CA, they need to think a little about the historical things we have done. We've gone from a mainframe-only business to a distributed computing and a mainframe business. We've gone from direct sales-only to a direct and partner business. We've gone from upfront license models to multi-year licenses to long-term licenses to completely new business models. There have been many innovations over time, so I wanted to point out to people to set the background that history is important. We've been here 25 years, and our hope is to be here another 25. And as far as innovation, that's really important for us because innovation in technology is critical, especially in the next two or three or four years as technology continues to evolve and customers are very focused on getting the best value, especially in a difficult economy. Customers are always looking for good value. And partners want to partner with the best technology provider and most innovative provider there is. They don't want to sell the second best. That's why innovation is a key message for us. Value and our ability to deliver it for customers is critical, especially with the new business model and the six new focus areas. In a competitive market today the number one question customers has is ROI and value and integration.
VB: So for partners, what is the value proposition as you see it today to partner with CA? Has it changed in the last year?
Kumar: The value proposition around partners revolves around a few things. One, customers want our partners to have a deep understanding of a part of their business. While we tend to have a horizontal focus on the larger part of the customer's business, you tend to find partners focusing on a piece of the customer's business. For customers, the value proposition in engaging a partner is that the partner can take their knowledge of technology and their knowledge of the customer and work with CA to deliver a good solution. The value proposition for CA is that we leverage the partner's relationships, the partner's capability to implement the products and the partner's ability to marry our technology with others as an integrator. For the partners themselves, there are many different aspects in terms of the value proposition. First is just the raw fact that our sales organization can never grow to be as big as it has to be to serve the needs of our growth. Therefore we are always going to rely on partners. Two, with the new CA business model and the more flexible and modular approach to all of our technology products, partners can piggyback on that to make a very good living. We're spending $100 million this year in marketing campaigns. That's a lot of money. And that money is something that partners can ride on, because every time we advertise BrightStor, a BrightStor value partner and a BrightStor channel partner can piggyback on that. And every time we do eTrust or Unicenter it's the same thing. So if you are say SAP R3 service provider for a small to medium sized business, you can now just take on the portion of Unicenter that manages SAP. You don't have to take on all of Unicenter, but you get the power of Unicenter at the same time. So there are many things for solution partners.
VB: Storage is obviously a very hot market right now. With BrightStor, how do you see CA positioned in that market right now?
Kumar: Storage is a super fast growing commodity, despite the temporary slowdown right now in the storage business. The opportunity really is to provide the broadest cross-platform integrated solution. Even a solution provider, say a reseller who is selling NT storage into a large corporation, has an advantage with CA. The advantage is that our NT products will work with the customer's existing OS 390 products. Our NT products will work with their Unix products. And the solution provider's ability to go to a customer and say, 'I can be a storage management vendor and partner.' Even though the customer is only looking at NT they can integrate with all the platforms they have, because odds are on a 390 they have CA software. The integration is built in, the portal is built in. It's really powerful. And, being number two in that marketplace will absolutely focus on spending marketing dollars, marketing development funds, seminar partnership dollars and things like that to further our message there.
VB: During your keynote you said, 'It's a very exciting time for CA but also a very important time. Lately there are those who want to rewrite our history and impede our progress.' Can you expand on that a bit? Is CA at a turning point, either due to an external force or internal one?
Kumar: I don't know if we are at a specific turning point. I think we are always turning, so if you ask me any day of the week, I guess we are some way or some form turning. We're at a pretty exciting time. The product business is doing well, the new business model is doing well and the flexibility in the business is doing well. The channel programs are doing well, too. The middle of last year was tough for us. We had a disappointing quarter and it was a tough year. But I think we have recovered from that. We've worked really hard this year to do that. My sense is that the rewards are right around the corner.
VB: Let's talk about your role. What are some of the key attributes you've tried to bring to your role as CEO? Has it been a different approach from [chairman and former CEO Charles B. Wang]?
Kumar: Well, we've certainly got different styles. Charles taught me very early that if we both thought the same way, then one of us is redundant--and it wouldn't be him. It would be me. So survival told me I have to have a different style. (Laughs) But seriously, in many ways we are alike as far as our concern for the company and those types of things. But in many respects we are different. Steve Ballmer won't have the same style as Bill Gates, Craig Barrett won't have the same style as Andy Grove, etc. Every individual is different even though you aspire to many common things. As far as the things I like to do and are focused on doing, I'm a big listener. I'm very hands-on. Many of our channel partners will tell you that they've met with me over the years. They can send me an e-mail and will get a response. I'm actively engaged and talk to them about the business. I'm also actively engaged with customers. I spend probably 60 percent of my time in front of customers. And I'm actively engaged with the employees as well. I love this business and I love what I do. We have to continue innovating, so to me, one of the big requirements is to pick up the pace of innovation. Not that it was slow in the past, but the future is going to demand faster and faster innovation.
VB: What about strategic partnerships? CA is making some announcements this week with companies like Oracle, Keynote and WebMethods. What are some of the other important partnerships you've got going? And are there any on your radar that you still want to get to know better?
Kumar: There are three kinds of partnerships, though I'm not sure how they rank in terms of importance. First, there are partnerships where we have to integrate with other people's technology to add value to customers. So a customer might have 'X' product; we have something we have to integrate to provide seamless operative functionality between the two. The second kind are the really close kind of partnerships you need with platform providers. You need partnerships with the Microsofts of the world and the Suns of the world. They are developing the platform. Even databases are becoming the platforms, so while we may compete with Oracle in some places, we are also a partner of Oracle. The third area that is important and that brings the most strategic value to customers is when we and the partner do the integration work, but then go a level beyond by engaging in the field together. So we show up at the customer kind of linked at the hip together. That's a really important strategic step.
VB: Speaking of Microsoft and Sun, it seems as if there's a battle brewing between .NET and anything that's not .NET. What are your thoughts on .NET and how it's positioned against say J2EE?
Kumar: Some people will have both and some will have one or the other. I think both will survive. Our job is to work with both the partners to provide the best integration we can. We are working very closely with both of them. Now Sun has clearly been out there with Java and J2EE a little bit longer, so there's more time and experience under people's belt. And .NET is kind of around the corner with pieces rolling out. But we have worked closely with both organizations. There will always be technology wars in our business. You guys love writing about them. The more questions you ask about it, the more people will have choices and sides to pick from. That's healthy for the industry. But it's kind of like Windows 2000 or NT and Solaris. They were at each other's throats for a while but they both survived, and in their own right they are both successful. Customers will choose. Our job is not to choose for customers but to support both of them.
VB: What's on the horizon. What should CA partners be on the lookout for next?
Kumar: They should be looking for us to drive more messaging out from a training perspective, a sales assistance perspective and a lead generation perspective. And also a general awareness in new product areas like BrightStor, eTrust and the new Unicenter and the Jasmine portal. That's another product that is easily manageable by a partner. It's not difficult. They can look for continued innovation. They should also embrace the things we can do with our new business model. That's a terrific advantage for partners just like it is for CA. So that's a good thing. |
