CA Technologies: Bringing the Cloud to Earth Vol

CA Technologies: Bringing the Cloud to EarthVol. 2by Marco Iansiti and Kerry HermanAli Utku YazganINF 534 – Software Engineering and Development of Software Process (Fall 2013)

Overview CA Technologies’ Reaction and Move to the

Cloud Building from its Legacy of Managing Enterprise IT

Complexity Getting Left Behind? Reorganizing to a New Strategy Acquisitions

CA Technologies’ Cloud Computing: Ready for the Cloud? Extending Market Opportunity while Integrating

Cloud within the Product Portfolio Bringing the Cloud Down to Earth Cloud Computing Competitors, 2011

CA Technologies’ Reaction and Move to the Cloud

Building from its Legacy of Managing Enterprise IT Complexity

In 2007, 30 years in business The most complete portfolio,

Systems management software, database, performance, storage, capacity planning, network management.

Some fears in company, Layers of company and product

acquisitions, Revenues would decline with new system

management tools and cloud based environments

CA Technologies’ Reaction and Move to the CloudBuilding from its Legacy of Managing Enterprise IT Complexity

In 2008, Mainframe 2.0 In 2009, Mainframe 2.0 evolved “We were at an inflection point and we

had two choices: stay where we were and continue to grow, or aggressively go after the next wave of computing–cloud computing.” McCracken

But the firm silo-ed and poorly organized.

CA Technologies’ Reaction and Move to the CloudBuilding from its Legacy of Managing Enterprise IT Complexity

Market grow: 7% - 8% Company grow: 3% - 4%

Submarket grow: 5% They are in the wrong market, They are in too

many markets. In 2009, We were spending about $600 million

on development a year, and had about $1.3 billion a year in cash flow. Yet we were still growing below industry standards. How could we shift things and become thought leaders in this new emerging space?” McCracken

CA Technologies’ Reaction and Move to the CloudGetting Left Behind?

"We were set up for slow growth" Dobson

"We built product vertically, and then sold from the verticals, but customers install horizontally" McCracken

CA Technologies’ Reaction and Move to the CloudGetting Left Behind?

CA Technologies’ Reaction and Move to the CloudReorganizing to a New Strategy

"We have to be fast, swift, efficient, like a start-up." McCracken

McCracken organized the firm along four strategic pillars; Grow the mainframe business, Develop SaaS; Lead security; Develop virtualization products


Change was not easy. “We have to be vigilant. Bureaucracy

was still a factor; culture can eat strategy every day.” McCracken

The new organization reflected a customer-facing approach.

Nancy Cooper, CFO explained the new logic and next steps, "The strategy shifted us from a geographic perspective to product perspective.

CA Technologies’ Reaction and Move to the CloudAcquisitions

With new strategy, they looked to add to company cloud computing capabilities.

A steady stream of acquisitions from 2008 to 2010.

McCracken and his mergers and acquisitions (M&A) team had about 250 to 300 companies on their radar at any one time.

In nine months, McCracken had undertaken nine acquisitions, 3Tera, Arcot Systems, NetQoS and Nimsoft.


Some worried about integrating these new young companies.

IBM Example By 2010, 13,500 employees, 3,500 sales

support personnel and 5,600 development engineers.

55% of company revenues was domestic, 45% was international.

Company name changed again.

CA Technologies’ Cloud Computing: Ready for the Cloud?

"The Internet has been transforming from people using browsers to read and access Websites, to a web of “call-able” services—compute, data, business APIs, etc. This is inevitable. He who gets in the way of the Web gets run over by the Web. We had a choice. Lead and help make it happen or be run over and left behind. We chose lead." Donald Ferguson


"I had a gut feeling about it, I knew security was going to be big in the cloud" McCracken

"We found 659 programs. That told us, 'You’re already in the cloud, you just don’t know it'" McCracken

In July 2010, Hansen was asked to take over CA Technologies’ management products and solutions. "Our organization was now aligned to our strategy”


3 Big areas. Difference between small and big

companies. Cloud Experiment. Time, time, time

CA Technologies’ Cloud Computing: Ready for the Cloud?Extending Market Opportunity while Integrating Cloud within the Product Portfolio

Dobson said, "We effectively elevated cloud to be a cross-product unit. Now the question is, how do you influence product management?”

Dobson noted, "Historically, about 85% of our revenues came from roughly 1,000 companies that are $2 billion and above. Move down to the $300 million to $2 billion sized companies, where there are 14,000 companies for us to harvest. These companies are far more eager to go to the cloud. And the solutions they need or want are much lighter and their TCO is much lower."

CA Technologies’ Cloud Computing: Ready for the Cloud?Extending Market Opportunity while Integrating Cloud within the Product Portfolio

Bringing the Cloud Down to Earth

"This move to the cloud is not an adjacency, it’s a transformation at our core" voiced by a different executive.

"How do we communicate the value of our past experience without positioning ourselves out of cloud computing? How do we change the perception customers have of us without destroying our sales advantage? Are we going to be perceived as mainframe guys dabbling in the cloud, or as a truly transformed cloud provider? If we succeed in communicating the latter view, is that actually good for us?" Famularo

McCracken was convinced the industry was at a critical inflection point.

And the future…

Cloud Computing Competitors, 2011

CA Technologies: Bringing the Cloud to Earth Vol

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