Computer Associates: New Owner, New Concerns

By Baselinemag  |  Posted 2005-02-01 Print this article Print

CA must prove to some customers that it's committed to building on the technology of recent acquistion Netegrity.

Before Computer Associates bought Netegrity last fall for $430 million, the top complaint among Netegrity customers was that the 400-person company provided poor technical support services. Now their main worry is that CA will smother Netegrity's technology.

Customers give high marks to SiteMinder, Netegrity's Web access control software, for its stability. "It's been one of the best pieces of software we've ever installed," says Robert Wyatt, director of information technology for the Society of Petroleum Engineers, an organization for oil and gas professionals. "It's never failed." View the PDF -- Turn off pop-up blockers!

But some say Netegrity could take months to resolve technical problems—a situation they hope CA can rectify. "When we experienced problems, Netegrity was slow to acknowledge it may be their issue, and then slow to bring the right resources to bear," says the information-technology director at a multibillion-dollar manufacturing company, who did not want to be identified.

Others believe CA is positioned to bankroll the next phase of Netegrity's development. CA is "a large and reputable company," says Danny Peltz, executive vice president of wholesale Internet and treasury solutions at Wells Fargo. "Now Netegrity will have more financial wherewithal at their disposal."

But not everyone is thrilled about CA absorbing Netegrity. An information-security manager at a Fortune 500 company that uses SiteMinder is afraid the CA acquisition "spells doom" for the product. "CA's customers are Missouri now—the company needs to show us that they won't kill off SiteMinder," says the manager, who spoke only on the condition of anonymity.

Steve W. Kesler, director of information security with Reynolds and Reynolds, a software and services provider to auto dealers, is eager to see CA nail down product road maps: "I'm nervous about building out an infrastructure on a technology they may discontinue." Plus, he says, CA "carries a lot of baggage with them. They've had some financial troubles and executive changes" in the past few years.

CA executives acknowledge customer uncertainty over the deal, but insist the company has turned over a new leaf and that it will continue to support all of Netegrity's products. Says Vadim Lander, chief identity architect for CA's eTrust security products group: "It's the job of the top management team to show our customers that we're absolutely committed to making them happy."

Identity and Access Management

Computer Associates
1 Computer Associates Plaza,
Islandia, NY 11749
(631) 342-6000

Ticker: CA (NYSE)

Employees: 15,300

Russ Artzt
Executive VP, eTrust
Oversees the eTrust security business unit, including development and marketing. He co-founded CA in 1976 with former chairman Charles B. Wang.

Vadim Lander
Chief Identity Architect
Responsible for technical strategy and architecture for eTrust products. Previously chief technology officer at Netegrity, which CA bought in 2004.

SiteMinder enforces access to Web applications based on criteria including an employee's role. IdentityMinder Web Edition stores user profiles and lets employees reset passwords. IdentityMinder eProvision automatically synchronizes user access privileges and other information with applications.

Reference Checks

Coppin State University
Ahmed El-Haggan
Project: Baltimore school uses IdentityMinder eProvision to automate creation and deletion of security policies for 8,000 students, faculty and staff.

U.S. Dept. of Agriculture
Owen Unangst
E-Authentication Project Leader
Project: Agency uses SiteMinder and IdentityMinder Web Edition to manage access to 120 business applications for 125,000 employees.

Discovery Communications
Giuseppe Cimmino
Dir., Corporate Systems Architecture
(240) 662-2000
Project: Cable TV network company gives 5,000 users access to 20 applications, including Lotus Notes, via SiteMinder.

Society of Petroleum Engineers
Robert Wyatt
Dir., I.T.
Project: Association for oil and gas professionals uses SiteMinder to ensure that only its 64,000 paying members can access a library of 37,000 technical documents.

Reynolds and Reynolds
Steve W. Kesler
Dir., Information Security
Project: Technology supplier for auto dealers uses SiteMinder to let customers log on to its procurement and support portals.

Virginia College
Eric Salveggio
Chief Security Officer
Project: College in Birmingham, Ala., with 6,000 students uses CA's eTrust Access Control software to restrict access to Windows and Unix servers.

Executives listed here are all users of CA's products. Their willingness to talk has been confirmed by Baseline.

Computer Associates operating results*

Gross margin93.7%93.3%92.2%
Operating profit/loss-$51M$63M-$199M
Net profit/loss-$7M$25M-$267M
Net margin-0.3%0.8%-8.8%
Earnings per share-$0.01$0.04-$0.46
R&D expenditure$514M$662M$644M

* Fiscal year ends March 31; FYTD reflects first nine months
Source: company reports

Other Financials**
Total assets - $11.93B
Stockholders' equity - $4.99B
Cash and equivalents‡ - $3.33B
Long-term debt - $2.47B
Shares outstanding - 594M
Market value, 1/31 - $15.47B

** As of Dec. 31, 2004, except as noted
‡ Includes short-term investments


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