CA double-digit growth forecast for Irish IT market

21 Jun 2004

Computer Associates is planning to expand its indirect sales channel in Ireland by appointing additional resellers and consultants based on a forecasted 12pc to 18pc growth in the Irish IT market, the company’s recently appointed interim CEO Kenneth Cron (pictured) told in an interview on Friday.

Cron took over the reins of Computer Associates (CA) following revelations of misreported revenues and subsequent SEC investigations into the company, taking over from Sanjay Kumar in the chief executive role. Kumar initially was moved to the role of chief software architect but in recent weeks left the company altogether.

Last Wednesday, the company had to restate its revenue for the last three quarters of 2003 with revenues of US$2.43bn, not US$2.44bn as originally claimed. In April, the software maker adjusted its revenue numbers for 2000 and 2001 downward by US$2.2bn following an SEC investigation that found that the company had used a “35-day month” to prematurely book revenue.

Operating on a strict policy of “fiscal discipline and integrity”, Cron is working hard to steer CA back onto the right road. “Being on the board since 2002 I already had a strategic knowledge of the company and at the recent CA World event in Las Vegas I communicated to everyone – employees and customers – that we are embarking on a new chapter for the company. We are poised to move forward. We are the market leaders in security and management software. This is a US$40bn marketplace and by focusing on the resource leveraging responsibilities of CIOs we are confident and enthusiastic about moving ahead. We’ve received a resounding response from existing customers who view their investment in our products and technologies as sound.”

Speaking of Kumar’s departure, Cron said: “It became clear to Sanjay that the company could not move ahead with him in it and he made his decision to tender his resignation, which we reluctantly accepted.

“We feel strongly that the financial re-statements are correct, they have been scrutinised at the highest levels of integrity and the figures we are presenting to the marketplace have been extremely well thought-through and disciplined. We see strong room for growth in the various market channels, particularly in our core markets of security and management software. We’ve restated our financial position; it is sound and we have a platform to grow on,” Cron told

Prior to being CEO of Computer Associates, Cron’s career was primarily in publishing. He spent 20 years building CMP Media, publisher of Computer Reseller News, Home PC, Information Week and many others, which he took public with Goldman Sachs in 1997 and sold in 1999 for over US$1bn to UK-based United Business Media. Cron then established a software publishing company called Uproar, which was subsequently acquired by Vivendi Universal. He then headed up Vivendi Universal Games as chief executive officer before becoming interim chief executive officer of Computer Associates.

Regarded as a safe pair of hands to guide Computer Associates back to fiscal and ideological health, Cron has begun by addressing the company’s perceived Achilles Heel, that of its channel and partnership strategy. “My strategic knowledge of Computer Associates made the transition from board member to CEO quite smooth. So far I’m enjoying the enthusiasm and commitment the employees have for the company as well as the enthusiasm and commitment our customers have for our products and technology.”

Looking to the Irish marketplace, Cron plans to exploit market opportunities by expanding its indirect channel base. “We are in a strong position in Government and finance in Ireland and have signed major deals for our security and management software with the Department of Agriculture, AIB and Bank of Ireland.

“Moving forward, I think the SME market for CA is an important marketplace. We see Ireland as a strongly growing marketplace, with more room to grow compared other European countries in terms of penetration and we are poised to capture that space. The IT services market in Ireland will grow 12-18pc on an annualised percentage basis, with 3pc economic growth expected for the country.

“Our targeting of Ireland going forward will be demonstrated by increasing partnerships with solution resellers who can handle the enterprise and unique nature of our software. We already have alliances with BT in Northern Ireland and Fujitsu and Ernst & Young. We are looking to expanding our partner base, while at the same time balancing that with our ongoing direct sales strategy. Matt Brennan is the general manager for Ireland and we will be looking to him to make the critical decisions for the Irish marketplace going forward,” he said.

By John Kennedy