Computer Associates CEO steps down

Charles Wang announces he is relinquishing his role as chief to pursue other interests but will remain chairman of the software company.

2 min read
Computer Associates International's chief executive officer, Charles Wang, today announced he is stepping down and is taking the role of chairman to better focus on the software company's spinoff plans.

Current president and chief operating officer Sanjay Kumar has been named to replace Wang as chief executive officer, the company said at a press conference this morning.

CA also announced that it will spin off its software and services businesses and later, its desktop accounting business and some other technology operations. The first spinoff, announced today, will be a new company called iCan-ASP. The company will concentrate on the application service provider market, offering hosted applications and services to businesses.

CA's software manages large corporate computer systems and networks. The 21,000-employee company also sells software for data storage and computer security.

sanjay kumar The company's shares have fallen 47 percent since July 3, when CA said profit in its fiscal first quarter ended June 30 missed forecasts. The Islandia, N.Y.-based company blamed poor sales in Europe and slower growth in sales of mainframe computers that use its systems-management software.

CA shares slipped $1.06, or almost 4 percent, to $25.88 in early trading. On Friday, CA shares rose $3.06, or 13 percent, to $26.94 after the company said it planned to make a "significant" announcement today.

The announcement accompanies a corporate realignment, expected to be completed today, that CA says will intensify its focus on its three fastest-growing product areas: security and storage management; network, event and performance management; and application development and business intelligence.

One analyst said he expected a more radical reorganization. Paul Rodriguez, an analyst with CE Unterberg Towbin, said he was expecting more news from the company. "The (spinoff) is a good decision because companies are out there looking to use ASPs. But a lot of investors thought there would be a more substantial announcement."

Rodriguez said many investors were looking for CA to announce a spin off of its data storage or e-commerce software divisions, or to issue tracking stocks for parts of its operations.

In a conference call this morning, Kumar said CA will "identify other spin-offs as time moves on." The new spinoff, iCan-ASP "will have greater potential for growth outside...the umbrella of CA, and will not take away from the core technologies of the company."

Nancy Li, who started as a college intern at the company and is now chief technology officer of CA, will become iCan-ASP's CEO. Li's management team will include Doug Robinson as chief technology officer; Mike Her as head of research and development; George Fischer as head of sales and marketing; and Ron Nunn as head of business operations.

The new company will be staffed by 40 to 50 current CA employees, Kumar said.

Bloomberg News contributed to this report.