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 various resale channels.
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 56% of sales. Enterprise products were about 36% of sales with services filling in the rest of the revenue.
In 2015 (ended March) the US remained the company's largest single geographic location by revenue, accounting for 61% of sales. Europe accounted for about a quarter of CA's revenue during 2015.
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 HP 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 5.6% in 2015 (ended March) to $4.26 billion from $4.51 billion in 2014. It was the company’s third straight year of revenue decline. The lower revenue was attributed to the sale of the company's arcserve unit, which provided data protection. Foreign exchange rates also affected sales.
After a string of seven increasingly profitable years, CA has posted two straight years of declining profits. The arcserve sale resulted in net income falling about 7.4% to $846 million in 2015 from $914 million in 2014. The company also had higher operating expenses and income taxes in 2015.
Cash flow from operations popped up above $1 billion in 2015 after dipping to $997 million in 2014.
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 two years, CA has restructured by cutting non-core operations such as 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.
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.