'We are an independent pure-play software company and will continue to remain so'

With the opening of the Hyderabad facility and keeping the Arcot facility in Bengaluru in the overall CA radar, and in the order of prioritization and importance, are you looking at India as a market for back-end development work? And how important is the Indian market for CA in the APAC region?
The two facilities in India-ones in Hyderabad and Bengaluru-are the largest development facilities in the world and will continue to stay the same in the coming years. These two facilities play a very crucial role, as a lot of our technological advancements come out of these two facilities. In addition, the Indian market is also very important to us, as it is growing at a very rapid pace. We are increasing our investment in the Indian market by about 25 percent, because we see it as an important pie of our growing business. You will see our focus on development capabilities in India along with an increased focus on the overall market. This is because there is a great opportunity for us in new technology areas. We also see it as a place for large global partnerships with the Indian SIs.

Could you throw some light on your partnership with the Indian SIs?
Some of the large system integrators, who are based out of India, operate globally. We have a global orientation for them, which are now done from North America, but having said that, a great deal of work has to go on developing these relationships for support structure and support system. It is a well-known fact that these SIs use our products to run their own business; but more importantly, we need to see how they are using our products when they serve the customers. So, we are making a lot of investments in this area as well. We aspire to derive revenues from Indian SIs of the range currently derived through the entire set of global SIs and it is the intent of our business. We work on relationships here and when you look at their business, it is largely out of India. And with these relationships our focus is to get our business outside India as well.

Globally, the government and public sectors are the key focus areas for CA, especially in the US market. However, keeping in mind the current US government policies against outsourcing, will it impact your business and relationship with the Indian SIs?
Currently, we are not looking at these aspects. We believe in taking a more rational approach towards the Indian market, which has already made its presence felt in the global market. I think the business that Indian system integrators do worldwide, including North America, will not be affected to that extent. There is more noise than substance at this moment. Besides, these pieces of legislation do not impact product companies.

In the last few years, there have been consolidations happening in the software market. With your stock prices hovering along with your product positioning and seeing the current trends, are there any possibilities that CA may get acquired and what would be your strategic positioning in such a scenario?
We believe that we are the best in the market as an independent organization and our customers also believe in that. Our strategies clearly entail that we are a 'pure-play' software company in the industry and will work hard to remain so. We do not want to be in the hardware business. We serve the marketplace in the best way through this approach and we have already demonstrated this to the industry. But at the same time, being a public company, we have to look and evaluate what comes in our way. We have a clear understanding where we are today, where we can be and how we will be rewarded in the marketplace.

Talking about some of the specialized positions like virtualization management and cloud computing and with the increased adoption of these technologies, how well are you geared up for looking into other geographies beyond North America?
Currently, 55 percent of our business comes out of North America ie the US and Canada and the rest 45 percent comes from other parts of the world. The strategy that we have in place is to flip this revenue contribution. This means that we have to grow more aggressively in the geographies outside North America. In this direction, our intent has been to invest 25 percent more in India, which is one the major emerging geographies and our focus has been to penetrate these markets more aggressively. At this moment, Western Europe is the most struggling market. The Asian market has come out more aggressively and India is a great example of this. Right now, we expect India to be the biggest contributor among all the geographies. Looking at the current scenario, it is expected to be even bigger than China. It was easier to do business in China earlier than it is today. The overall growth of the IT industry in India has made it one of the biggest opportunities for us to grow. Currently, we are in a stronger position in India than in China. In Latin America, Brazil is one of the most important geographies, which is again growing at a rapid pace. For us, Brazil is no lesser than India in terms of growth, wherein the adoption of new technologies is just the same as the Indian market. They are very focused on the technologies like cloud computing. And we see a tough competition between India and Brazil in terms of contributing towards our overall business. But again these two countries are the most important opportunity market places for CA Technologies.

How do you perceive CA today-as an organization that provides infrastructure management services or security services?
If you take a look at our product portfolio, we offer services ranging from security in the cloud to virtualization management. The fact is that customers need services horizontally-they need it for infrastructure management, security, SaaS, etc. So, when we looked at this pattern, we made organizational changes, what we call customer solution group, where we look at the market from customers' point of view, solutions point of view and none of our competitors do so. And that is going to be our focus. We bridge the gap between various services and that's our strength. Our real growth comes from SaaS, virtualization management, cloud infrastructure and security in the cloud. Our growth is coming from new geographies and new operating environments as well.

How has the face of CA changed as a company after the economic turmoil?
The face of our company has changed in many ways. From the customers' perspective, there were times in the past where we were not viewed as a customer-centric company; we were harsher with our customers than we should have been, and while we provided good solutions and products, we were not considered as a strategic partner. But now when we talk to our customers like in India, they look forward to CA in terms of where we are today and where we intend to be in the future. They look at CA Technologies for cloud capabilities, security in the cloud capabilities, and virtualization management capabilities among other services. There is nobody in the industry with this experience and more capabilities than we have in these areas. We are coming from a position of strength. We are fortunate enough to have been positioned at the top of this market with an experience and the capability that has not existed in the market place before. Today, we are just moving into the different operational brackets. We do not have to look for adjacencies to grow our company.

Interviewed by:
Rajneesh De (rajneeshd@cybermedia.co.in)
Nivedan Prakash (nivedanp@cybermedia.co.in)