Once known as Computer Associates, CA Technologies is moving toward becoming known as Computer Apps. One of the world's largest software companies, CA provides tools for managing networks, databases, applications, storage, security, and other systems. Primarily serving large enterprises, its applications work across both mainframes and cloud computing environments. It current focus is on developing applications for cloud and mobile computing, and DevOps (development operations). Most of its software license sales come from subscriptions (primarily 3- to 5-year terms). The company also offers consulting, implementation, and training services. It sells worldwide to businesses, government agencies, and schools directly and through resellers.
The company's products are divided into two software segments -- mainframe and enterprise -- while services are broken out into a third. Mainframe software accounted for about 68% of sales. Enterprise products were about 37% of sales with services filling in the rest of the revenue.
In 2016 (ended March) the US remained the company's largest single geographic location by revenue, accounting for 68% of sales. Europe accounted for about 20% of CA's revenue during 2016.
CA continues to expand its reach to organizations in areas that offer growth opportunities. These include Asia, Eastern Europe, and Latin America. The company remains specifically focused on Brazil, China, India, Mexico, and Southeast Asia, where new technologies are key to business development.
The company operates principal research and development centers in Islandia, New York; Framingham, Massachusetts; Santa Clara, California; Prague, Czech Republic; and Hyderabad and Bangalore, India.
Sales and Marketing
As a software powerhouse, CA maintains partnerships with other industry leaders, including systems integrators such as Accenture and PricewaterhouseCoopers, as well as managed services providers, including Hewlett-Packard Enterprise and IBM. It maintains partnerships with other technology and software companies to ensure the interoperability of its products with offerings from such companies as Microsoft, SAP, and VMware.
Customers include Amerigroup, AutoTrader, Capgemini, Comcast, and Fujitsu.
CA's revenue dropped about 5.5% in 2016 (ended March) to $4 billion from $4.26 billion in 2015. It was the company’s fourth straight year of revenue decline. Revenue slid for all its business and geographic segments in 2016. The company blamed the impact of currency exchange rates for much of the sales drop. It reported an in increase in bookings as well as a contract renewal with a system integrator worth some $500 million.
CA has posted its third straight year of declining profits with profit falling 7.5% in 2016 to $783 million from $846 million in 2015.
Cash flow from operations was steady at $1 billion in 2016, the same as 2015.
While some of its competitors have been taken private through buyouts, CA has remained an independent, publicly traded company. But several years of declining revenue and profits were the ingredients that led to private equity deals for BMC and Compuware.
In the past three years, CA has restructured by cutting non-core operations such as CA Erwin Data Modeling, arcserve, and reducing headcount. At the same time, it has positioned itself as an applications provider for corporate IT departments. The company introduced its Application Lifecycle Conductor that automates and manages application development for computing environments from mobile to mainframe. Another software development and management package, Management Cloud, is aimed at helping IT staffs deal with the increasing complexity of software.
Mergers and Acquisitions
Historically an aggressively acquisitive company, CA continues to expand its application portfolio with strategic purchases.
In December 2016 CA agreed to buy Automic Holding GmbH, a developer of software that automates IT and business processes. The price was €600 million ($636 million). The boards of directors of the companies have approved the deal, which is expected to close in the fourth quarter of CA’s fiscal 2017 (ending March). Automic adds cloud-enabled automation and orchestration capabilities to CA's portfolio and increases its exposure in Europe.
In August 2015 CA completed the acquisition of Xceedium Inc., a provider of privileged identity management tools for protecting on-premise, cloud, and hybrid IT environments.
CA acquired Rally Software Development Corp., a provider of enterprise software and services, for about $480 million. Rally's products complement CA's offerings in DevOps and Management Cloud.
In another DevOps-related acquisition, CA bought Grid Tools Ltd. in 2015. Grid Tools develops enterprise test data management, automated test design, and optimization software.