Computer Associates International Inc.s efforts to reshape itself in the eyes of customers and stockholders has as much to do with shedding products from its bloated catalog as it does with acquiring new technologies.
Last week, CA decided to sell its Ingres open-source database technology to Garnett & Helfrich Capital, a Menlo Park, Calif., private equity firm. The deal created a spinoff company called Ingres Corp., which will focus on developing enterprise open-source software.
As part of the sale, CA, based in Islandia, N.Y., will retain a 20 percent ownership stake in the new entity and has exercised its right to appoint a member to Ingres board of directors by naming Mark Barrenechea, CAs executive vice president of technology strategy and chief technology architect, to the position. CA will assist the new company with product development, partnerships and marketing initiatives, said CA officials.
Although he is well aware of the growing popularity of open-source software, especially the success of open-source databases from vendors such as MySQL AB, CA Chief Operating Officer Jeff Clarke said the decision to spin off Ingres was not a difficult one.
“As important as it was, we arent in the database business. We werent able to put the management attention on Ingres we thought it deserved. It would get lost in the CA strategy,” said Clarke. “This is about getting CA more focused on things we can lead and not worrying about everything we acquired in the past. … CA was not going to put tens of millions of dollars in database investments to make it compete in the open-source world. Garnett & Helfrich will do that.”
Clarke said the Ingres move is a result of CA learning from past mistakes and often spreading itself too thin in technology areas outside its core businesses. Instead, the company will focus its attention on its growing systems management, security and storage business units.
CA came to own the Ingres technology in 1994 as part of its purchase of Ask Group. Following the lead of vendors such as IBM, last year CA released the Ingres database to the open-source community under the CA Trusted Open Source License.
Clarke said that other existing technology areas within CA may face the same fate as Ingres.
“Ingres was the largest of these, but we will continue to look through our portfolio,” he said.
CAs acquisition strategy has been altered to reflect a concerted effort by the software maker to distance itself from deeply ingrained perceptions of CA. Those images portrayed CAs motivation as selfish, acquiring companies simply to acquire their profits and often letting new technology assets wither.
However, CA President and CEO John Swainson points to CAs purchase of Concord Communications Inc. this year as an example of new doors being opened—in this case, to a telecommunications audience, which it had little experience with before.
“Concord gives us a very strong presence in telco in the network management area, which we didnt really have previously,” said Swainson. “Thats something were likely to do more of. We are very optimistic about the opportunity this gives us.”
Some analysts have suggested Mercury Interactive Corp.s testing software would fit nicely with CAs asset management product set, but Swainson remained tight-lipped on a potential acquisition—for now.
“Weve not chosen to look at testing as a particular market. I cant speak [about] whether that might change in the future,” he said.
Going forward, Clarke said CA will likely focus on smaller acquisitions, which he calls “technology tuck-ins,” to complement some of the massive investments made by CA over the past 12 months, such as Concord, Niku Corp. and Netegrity Inc. He said potential areas for these tuck-ins could include security, compliance and backup technologies.
