Demand ManagementDemand Management

Companies are looking for that kind of technology. "You almost have to transform the company to be available for [the] online customer," says Hamed Omar, senior VP of technology infrastructure at student loan company Sallie Mae Inc., which has been testing Unicenter NSM. To improve online response time in an era of lower budgets, technology managers need to figure out which of their thousands of systems support the most important apps. Unicenter NSM helps Sallie Mae do that, Omar says. But the business-oriented view of IT that CA is promising isn't necessarily new. "Frankly, it's been there for a while," he says.

Still, analysts say, most customers aren't prepared for the on-demand scenarios CA and other vendors describe. "I don't know of any end users doing it, because end users aren't ready for it," says Corey Ferengul, an analyst at Meta Group. "This is really a year of messaging and getting your act together." Support from third-party software vendors could make on-demand computing an easier sell for CA. Kumar says he hopes to sign deals this year with apps vendors to integrate with CA's new software, but he declined to name any he's talking to.

Perhaps the best thing CA can do to pave the way for its new technology is to get customers back on its side. In April, the company laid off 450 workers at its Islandia, N.Y., headquarters--a move that cost $15 million--as part of a merger of its tech-support and installation operations meant to improve customer service. It has exited the IT services markets for Notes and Exchange projects, while hiring in areas it pegs for growth, such as storage and security. CA also has 650 customer-satisfaction staff working alongside its sales representatives, who, customers say, have toned down the rough stuff with users. "If not easy, they're at least a fair company to deal with now," says Blue Cross Blue Shields' Roberts. After dumping some CA products in the '90s, "we're trying to become more reliant" on them, Roberts says. Up for discussion at CA World: A contract for database utilities owned by BMC that's coming due next year. "We want to find out CA's capabilities" in that area, he says.

CA hasn't made a large acquisition since it bought Sterling Software for $4 billion in 2000. In February, it bought Netreon Inc., a privately held maker of software for designing storage area networks. The product, which uses Microsoft Visio, is now part of CA's BrightStor line. In May 2002, CA bought asset-management software from Intraware Inc., an electronic software delivery company, for $9.5 million.

In addition to new markets in security and storage management, CA hopes to spur growth of its Unicenter brand. Unicenter revenue topped $1 billion last year but was down nearly 11% from 2002. Besides its big Windows and Unix competitors, IBM's Tivoli software, HP's OpenView, and an emerging threat from Microsoft, which has built more management and provisioning tools into Windows Server 2003 (and hired Anders Vinberg, who designed Unicenter's user interface), CA now has to compete with smaller tools vendors such as Mercury Interactive Corp. and Quest Software Inc. in areas such as management monitoring of J2EE apps (see story, "Unlock Systems' Potential").

CA says it's trying to get customers more involved in its software-development process. A Unicenter advisory council of 50 top customers met with CA technical managers in New York in May, says Concord's Fiedorowicz, a member who has had regularly scheduled conference calls about future releases and user requirements since then. "We have a better understanding of where CA is going with their products," he says. A "development buddy" program of 300 customers also solicits input.

And instead of just acquiring technology, CA is spending more on research and development than it has in the past--$2.1 billion during the past three years, an increase of 50% over the previous three. The company is funding research in wireless networking, IT security, and grid computing with Stony Brook University in New York, MIT, and the University of California at Los Angeles. One Stony Brook project, called wireless mesh networking, could help businesses create networks of handheld computers or cell phones without the need for central access points; it will be demonstrated at CA World.

Given the wave of software-industry consolidation, underscored by the three-way battle among Oracle, PeopleSoft, and J.D. Edwards, CA's size could be a significant asset. "In every industry, as the industry matures, you will have large players with critical mass," Kumar says. "We will be around. We have the critical mass. So let's really focus on some internal stuff."

Kumar says his job has been to "totally overhaul" the way the company does business. Still, if CA wants to find a market for its newest products, and prove it can grow on its own merits, customer service will have to mean a lot more than a double espresso and a wine-tasting trip.