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CA eyes smaller businesses

The firm unveils new management software for small and medium-sized businesses, illustrating its change in strategy.

NEW ORLEANS--Computer Associates has built a business that will rake in $4.7 billion in revenue for the just-completed fiscal year by catering to the software needs of the top corporations in the world. That strategy is about to change.

At the company's annual CA World user conference, a new set of management software tailored to small and medium-sized businesses was launched, raising warning flags for dominant workgroup-oriented players such as Intel, Hewlett-Packard, and Network Associates.

CA's Unicenter suite of enterprise management software has driven the company's evolution away from a mainframe-centric view of computing to a strategy of embracing technologies of the PC and server system age, often called client-server.

A confluence of the growth in adoption in Microsoft's Windows NT server and increasing interest in managing the systems in a business for greater return on investment has catapulted the small-business niche to the forefront of new opportunities for software, hardware, and services companies.

CA has already done some legwork to get its software into small and medium-sized accounts by bundling a stripped-down version of Unicenter, called a "framework," with systems from various companies for free. Also, CA's $1.2 billion acquisition of storage and backup specialist Cheyenne Software in the fall of 1996 gave the firm an entry point into Cheyenne's large reseller channel.

Market researcher International Data Corporation has pegged CA's indirect sales at 17 percent of total current revenue, with the company's high-end direct sales force accounting for the majority.

"Having proven that Unicenter TNG works on the high end, the time is ideal for CA to 'cross the chasm' to the more targeted concerns typified in mid- and low-tier enterprises," said an IDC report authored by analyst Anthony Piccardi.

CA chairman and chief executive Charles Wang has proclaimed that he would like to see a balanced revenue approach, with the reseller sales channel accounting for closer to 50 percent of revenue.

The effort was buttressed today with the announcement of an agreement between CA and Compaq Computer, the market share leader in PC servers, to bundle the Unicenter TNG Framework with all the company's server system installations, past and present.

Included in the company's workgroup focus are 12 products that can snap into the Unicenter TNG Framework underlying package. They will be sold exclusively through resellers. The software covers asset and inventory management (AimIT) through network security (ProtectIT) and fax management (FAXserve), incorporating a combination of newly created tools with existing products.

Mark Sokol, CA's senior vice president of advanced technology, said the company's customers are adopting NT in department settings and therefore need tools for specific tasks, rather than an overarching management system. "CA's not really been there," he added. "We think these products will take off big time."