CTO: Large-scale acquisitions likely over for CA

The company has spent more than $1.7 billion in acquiring companies over the past 18-plus months

Large-scale acquisitions are probably a thing of the past for CA Inc., says the software vendor's new chief technology officer (CTO), Al Nugent.

CA has spent more than US$1.7 billion in acquiring companies over the past 18-plus months, including four large purchases -- Wily, Niku, Concord and Netegrity -- with the price tag on each ranging from $330 million to $430 million.

"We're probably more at the edge of the larger types of acquisitions, the Wilys, the Nikus," Nugent said. While CA will still look at the merits of major purchases, the company will focus more on buying smaller firms to provide access to niche technology or specific product features.

As CTO, Nugent will remain focused on implementing CA's enterprise IT management (EITM) strategy, a road map for both simplifying and more tightly integrating CA's systems management and security software.

"EITM is our technology vision and it will remain so," Nugent said. CA will evolve EITM over time so that the strategy responds to changes in customers' technology environments and in the IT market in general.

In his new role, Nugent expects to leverage skills he developed in previous CTO roles, notably at Novell Inc., along with his work since joining CA in April 2005 as head of the vendor's Unicenter enterprise systems management business unit. "I've been in the trenches delivering products for CA," he said. "That kind of [programmer] perspective sometimes gets lost in the pure CTO role in other companies."

Over the last six months, Nugent has heard fewer questions from CA customers about the progress of the company's plan to reinvent itself in the wake of an accounting scandal. "They say, 'We understand that you're transforming, now let's get on with business,'" he said. "We don't have to sit down with them and say how we're changing."

Customers are also proving tolerant about CA's recent financial missteps. The company delayed filing its latest financials, partly due to the impact of a new plan that forced CA to pay higher sales commissions than expected.

"As recently as yesterday, the majority of our customers describe it as a teething problem, one tiny aberration," Nugent said. "In any large transformation, there are just so many working parts, and some will need adjusting."

CA is midway through deploying "one of the largest and broadest SAP installations in any company," he said, as the company rolls out new ERP (enterprise resource planning) software across its entire operations. "It's incredible being in the business of change in addition to being in the business of business," Nugent added.

He dismissed the recent departure of four of CA's leading executives, including former CTO Mark Barrenechea as "the normal course of events" in a large company. For the immediate future, Nugent will continue to lead CA's enterprise systems management group as well as his new CTO job. "I can wear both hats for a while," he said.

CA is also going to take its time appointing a permanent chief financial officer. "It's an unbelievably critical role for the company," Nugent said. "We need the right individual with the right skills."

The original CA definition for its CTO position included a research component. "My spin on the job is more towards operational [issues] and a public technology pulpit for the company," Nugent said. After sitting down with Sam Greenblatt, CA's senior vice president of technology, it became clear that the research piece of the CTO role was more suited for Greenblatt, Nugent said. Already managing the company's intellectual property process and approach to open source, Greenblatt now becomes senior vice president of innovation, additionally in charge of research and CA Labs.

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