Acquisitions to Fuel New CA Engine

The executive team at Computer Associates will focus on
growth through acquisitions, as its
new president and CEO-elect,
John Swainson, transitions into his role.

At a press conference Tuesday morning, Swainson, a former IBM worldwide software sales vice president, said time to market and
return on investment concerns play a key role in any software company and
one he plans to adopt at CA.

John Swainson
John Swainson, new president and CEO-elect of CA

“This is a market that does not wait, and I have watched opportunities pass
by as I’ve tried to build products,” he said. “My bias will be, frankly, to
look for early ways of entering a market even with relatively undeveloped or
immature technology teams or even immature market and sales teams.

“That will be the primary thing that we focus on, but let me not mislead
you, we are going to build products here,” he continued. “This is a
software company, this isn’t a holding company that happens to buy software
assets and sort of manage them.”

Swainson will transition into his CEO role, reporting to interim CEO Kenneth
Cron for the next four to six months before taking the helm, while
immediately taking a seat on the board of directors and taking on the role
of president. With a resume that includes starting up IBM’s middleware
division as general manager in 1997, his role as CA’s president is to chart
the Islandia, N.Y., company’s software strategy and work on product
development.

Analysts are largely pleased with the selection of someone outside the CA
halls with a strong IT pedigree to take over CA’s operations.

“Swainson has a good reputation as a solid business executive with sound
sales and customer relationships and a broad understanding of technology,” a
Merrill Lynch research note said. “While we believe Cron did a good job in
moving the company through its restatement period, and several management
changes, this move brings an additional dimension of technical capabilities
to the CEO office.”

Swainson will also have to work on the company’s image problem, which has
been marred by an accounting scandal surrounding its 90s policy of the
35-day month, or keeping the financial books open long enough to meet
targeted revenue numbers.

The resulting Securities & Exchange Commission
(SEC) and Department of Justice investigations ultimately led to an
executive house cleaning
that later included
former CEO Sanjay Kumar.

Cron, who took temporary possession
of the top management spot in April, and by all accounts was successful
in his efforts, will continue to serve on the company’s board of directors
after the four to six month transition period.

Lewis Ranieri, CA chairman
of the board, said the board plans on adding two outside seats by the end of
the year.

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