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CA plans services arm

The software giant formally launches a renewed bid to take a piece of the lucrative high-tech consulting services pie.

NEW ORLEANS--Computer Associates formally launched a renewed bid to take a piece of the lucrative high-tech consulting services pie, unbowed by its failed attempts to acquire the sought-after capability.

The software giant also rolled out a bundling deal with Microsoft and unveiled a variety of new management software tools at the opening day of its annual user conference.

The firm, which specializes in management, database, and business software for corporations, is hoping to expand the reach of its flagship Unicenter product while simultaneously building a new services arm to take advantage of what has become a booming business to serve the needs of overloaded information technology professionals.

The company initiated a $9 billion high-profile bid for Computer Sciences, a firm specializing in computer services and consulting, earlier this year. That takeover attempt ended in failure last month.

CA's new professional services organization will add 2,000 employees by the end of this year, according to chairman and CEO Charles Wang. The new division will tackle management outsourcing, application development and integration, and Year 2000 compliance issues, among other services.

"This is plan B," noted Wang at a CA World '98 press conference. "Plan A was the acquisition of CSC, which didn't work out."

Wang, who opened the conference last evening, said the company would develop the services organization through internal means as well as via strategic acquisition, classically a preferred method for CA. "We will use the same strategy we have historically used," he said. "Today we are looking at many companies all over the world."

Management software competitor Tivoli Systems, an IBM subsidiary, has the benefit of Big Blue's successful services organization at its disposal.

"What we do need is people to deploy and implement rapidly," Wang said, noting the possible rewards of adding service capabilities to a booming software business. "We don't want to miss that opportunity."

In the aftermath of the CSC debacle, most analysts said it was only a matter of time before CA launched an alternative means to follow the same services path.

"The service piece is where the money is going these days," said Bob Sakakeeny, analyst with the Aberdeen Group. "The hardware and software is representing a declining portion of information technology dollars.

"The biggest problem everybody is facing is bodies," Sakakeeny continued. "In that sense, CA is entering a very, very competitive market. It's going to increase the bidding war, increase the costs for everybody."

News of the new services thrust came during a busy day for the company. CA also announced a bundling effort with Microsoft's forthcoming Windows NT 5.0 server operating system, a highly anticipated upgrade that most believe will ship early next year. Under terms of the pact, a copy of CA's Unicenter TNG Framework will ship with every copy of NT, essentially offering a Web-based interface for management of NT, according to Wang.

The NT-focused product, called the Real World Interface for Windows NT, essentially takes the multiprotocol support offered in other bundled versions of the framework and whittles it down to support a Microsoft-led specification for Web-based management. The CA tool gathers and correlates that data and displays it in a Web browser to an information technology manager.

"It is the only third party application we're putting into NT," Bill Gates, Microsoft's chairman and CEO, said at a press conference. "We're very pleased with how this partnership has developed."

Microsoft has long been criticized by industry pundits for offering a muddled management strategy to the market and this may do little to quell that criticism. The software giant already develops management tools for Windows-based desktops and servers called Systems Management Server, which is sold separately as well as part of the BackOffice suite of server-side applications at the firm.

Microsoft has also added a unified Management Console to NT for third party software to snap into. The CA software will offer users of the Microsoft Management Console an alternative way to view Web-based information, according to executives from both companies.

"The Microsoft Management Console is a central part of NT 5.0," Gates said. "What we're doing here is getting a piece of exciting technology."

CA already claims they have shipped 3.6 million copies of the TNG Framework with systems and software from various third parties. The Microsoft agreement should only add to that number.

The company also announced an increased focus on sales through third party channels, backed by a bevy of new workgroup-focused products that offer specific functions that range in price from $695 to $3,000 per application and snap into the TNG Framework, which is free. The point products will also ship as part of an "Enterprise Edition." The workgroup products will run on Windows NT.

The company also provided more details on the next release of Unicenter, dubbed The Next Dimension, which is due out sometime next year, and launched a 2.2 version of the current Unicenter TNG and TNG Framework products.

The TNG upgrade includes what the company calls "Neugents," which are essentially intelligent agents that offer predictive capabilities to information technology administrators, as reported in February by CNET's NEWS.COM.

Not to be outdone, Tivoli said Windows NT 5.0 server would also ship with the company's Management Agent so that customers can also view NT management data through a Web-based interface. Tivoli also announced a similar agreement with Intel today, covering the chip giant's "Wired for Management" specification, which offers a set of base-line management capabilities for the company's hardware.

Another competitor, Hewlett-Packard, also chimed in with the announcement that its ManageX Web-based agent for its own OpenView enterprise management software will ship with NT 5.0.