DETROIT-Motown, the birthplace of music legends, knows how to rock. Now the city’s largest IT company is showing how it plans to rock the technology world.
Compuware, a 35-year-old software company based here, announced plans May 15 to refocus the company to better serve its enterprise customers and realign its products and services toward a common set of objectives. The company’s overall effort to rebrand itself is dubbed Compuware 2.0.
In line with its rebranding and refocusing, Compuware officials selected a new logo for the company-a three-dimensional guitar pick to signify the role Compuware intends to play in “rocking” the IT world.
The new focus of the company will include bits of technology and best practices from the Java and open-source camps, as well as some elements of the Web 2.0 world with collaboration technologies and SAAS (software as a service). However, Compuware is first building on its heritage. Compuware 2.0 is as much about how to bring a viable old-school IT company into the new world while holding onto its core values of customer service as it is about anything else.
The move makes sense for Compuware, said Forrester analyst Carey Schwaber.
“Even though the term ‘2.0’ is kind of 2005 … I do think that this type of spirit of reinvention is necessary if Compuware is to improve its performance,” Schwaber said. “The company has always had good products, but its execution in the field has been troubled for a while. I’m glad to see that there has finally been a shakeup at the top. I think that will make it easier for Compuware to explore new ways of being.”
To focus on revamping the company, Compuware CEO Peter Karmanos Jr. reached out to Detroit’s lifeblood and hired Jason Vines, a veteran of the automotive industry, as senior vice president and chief communications officer. Vines, who has worked at Chrysler, Ford Motor Company and Nissan and who spearheaded the marketing for the hugely successful Chrysler 300 automobile launch, is leading the charge in the Compuware 2.0 branding effort.
The company has become a stalwart in the IT industry, with 6,500 employees, annual revenue of $1.2 billion and a state-of-the-art headquarters officials hope will be a key to the revival of the downtown Detroit area.
When Karmanos created Compuware more than three decades ago, the mainframe was king and Compuware became successful selling mainframe software to enterprises. Today, many of Compuware’s original competitors are defunct or part of other entities. Yet, despite its growth into distributed computing and other areas, Compuware continues to fuel enterprises with mainframe solutions, competing against companies such as IBM, CA and BMC Software.
In an earnings call May 15 announcing Compuware’s financial results for its fourth quarter and fiscal year ended March 31, Bob Paul, president and chief operating officer of Compuware, said in the quarter, “Mainframe sales led the way, growing 40 percent quarter over quarter and nearly 80 percent year over year. Who said the mainframe is dead?”
In a 12-page e-mail to employees from late March detailing “The Road to 2.0,” Paul said rumors that Compuware might abandon its mainframe offerings “couldn’t be further from the truth. Why would we do that? We have a vast customer base representing well over $400 million in annual revenue in mainframe markets.”
Therein also lies one of the reasons for the Compuware 2.0 effort. “A lot of our long-term mainframe customers didn’t know we did distributed computing products, and vice versa,” Vines said.
Vines said while nearly all Compuware’s customers vouched for the fact that the company’s products-including portfolio management, IT service management, development tools, testing and QA (quality assurance) solutions, and mainframe solutions-help make their IT systems better, a few went further to say Compuware’s solutions “rock.” Thus the “Rock IT” notion was born.
In addition to the growth in mainframe software sales, Paul said Compuware posted 38 percent growth in overall license revenue in the fourth quarter, as well as 49 percent growth in total product commitment, which he called “the truest indicator of our software-related activity in the quarter.”
Over the years, Compuware has seen its share of restructurings and changes in focus, such as adding more of an emphasis on distributed computing solutions as opposed to primarily mainframe offerings some years back.
Yet, “on the distributed side, we remain encouraged by the continued success of our key growth-driver solutions,” Paul said. “[IT service management solution] Vantage license sales were up 21 percent year over year and 17 percent quarter over quarter. [IT portfolio management offering] Changepoint license sales for the year were up more than 25 percent.” Paul said Vantage offers Compuware the most growth potential.
Forrester’s Schwaber said she thinks “Compuware has been organized to win very large deals with enterprise IT organizations. While Compuware has some customers that fit that pattern, most of the Compuware customers I run into are dramatically smaller. I think it’s time for Compuware to change its go-to-market tactics in recognition of that reality-or else to change its products to make them more appealing in comparison to the product portfolios of vendors like HP, IBM and Microsoft.”
Investment and Worldwide Rollout
In addition to launching Compuware 2.0 and the company’s new global theme, “We make IT rock around the world,” Compuware also established a new microsite.
“Compuware 2.0 is not a campaign, a one-time initiative or a message,” Paul said. “Compuware 2.0 is a rebirth based on the company’s longtime principles and anchored by definable, actionable and measurable objectives. While there is a marketing component to Compuware 2.0, the core of this effort is in approaching the market in a fresh way and delivering quantifiable economic value to our customers.”
One of the core objectives is to go to market with complete solutions to business problems by combining software, best practices and professional services, Vines said.
Paul Czarnik, vice president of technology architecture at Compuware, said the company’s development focus has shifted from products to overall solutions, including services. Czarnik oversees everything except the mainframe offerings, leading a 500-person development team focused on Compuware’s distributed computing customers.
As part of the Compuware 2.0 initiative, the company will increase its investment in the Vantage and Changepoint products to accelerate further development, as well as integrate the products with the company’s other solutions, company officials said. Compuware also will increase investment in its QA and testing tools, such as QADirector, TestPartner and Optimal Trace, and in the company’s Uniface enterprise application development solution, officials said.
They also intend to bundle services with their products though Compuware’s worldwide SDG (Solution Delivery Group). Formerly known as the Product Related Services group, SDG is now a single, global organization. However, it will be managed at a local level and all SDG members will be part of a virtual team for their specific solution expertise, the company said. “Each virtual team will be led by a practice leader who will leverage the team’s combined expertise and customer experiences to evolve the solutions,” Paul said.
Covisint, a separate piece of Compuware’s business, also will play a key role in the Compuware 2.0 effort. Covisint is Compuware’s SAAS arm. The subsidiary provides identity management as a service, portal and collaboration services, messaging, and Web services.
David McGuffie, president of Covisint, said for Compuware 2.0, Covisint will provide the tools and technologies to better leverage the talent, resources and intelligence of Compuware’s global employee base. Key to this will be Covisint’s ability to enable information sharing throughout the company, McGuffie said. In addition, Covisint will help Compuware embrace Internet-based services and cloud computing. McGuffie and Czarnik said their teams are working together on ways to enable some of Compuware’s core IT products to be offered as SAAS solutions.
Compuware is planning an IPO (initial public offering) for Covisint, although Compuware will retain 80 percent of the company. Paul said although Compuware will be in a position to file for the IPO in the summer, he expects the company to delay the filing until external market conditions, especially for SAAS companies, improve.
Also as part of Compuware 2.0, the company plans to fully leverage its worldwide rollout of Salesforce.com, giving the Compuware field sales organization a single system for CRM (customer relationship management), pipeline and forecast management, Paul said.
“We are now one of the largest users of Salesforce.com in the world,” Paul said. “Through this tool we will review sales data on a weekly basis to determine how we are progressing toward meeting our goals, and we will be able to react quickly as an organization to any changing market conditions.”
Along with drawing on Covisint for Compuware 2.0, the company will use its Changepoint and Vantage as well.