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CA Technologies: Bringing the Cloud to Earth Vol. 2 by Marco Iansiti and Kerry Herman

CA Technologies: Bringing the Cloud to Earth Vol. 2 by Marco Iansiti and Kerry Herman. Ali Utku Yazgan INF 534 – Software Engineering and Development of Software Process (Fall 2013). Overview. CA Technologies ’ Reaction and Move to the Cloud

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CA Technologies: Bringing the Cloud to Earth Vol. 2 by Marco Iansiti and Kerry Herman

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  1. CA Technologies: Bringing the Cloud to EarthVol. 2by Marco Iansiti and Kerry Herman Ali Utku Yazgan INF 534 – Software Engineering and Development of Software Process (Fall 2013)

  2. Overview • CA Technologies’ Reaction and Move to the Cloud • Building from its Legacy of Managing Enterprise IT Complexity • Getting Left Behind? • Reorganizing to a New Strategy • Acquisitions • CA Technologies’ Cloud Computing: Ready for the Cloud? • Extending Market Opportunity while Integrating Cloud within the Product Portfolio • Bringing the Cloud Down to Earth • Cloud Computing Competitors, 2011

  3. CA Technologies’ Reaction and Move to the CloudBuilding from its Legacy of Managing Enterprise IT Complexity • In 2007, 30 years in business • The most complete portfolio, • Systems management software, database, performance, storage, capacity planning, network management. • Some fears in company, • Layers of company and product acquisitions, • Revenues would decline with new system management tools and cloud based environments

  4. CA Technologies’ Reaction and Move to the CloudBuilding from its Legacy of Managing Enterprise IT Complexity • In 2008, Mainframe 2.0 • In 2009, Mainframe 2.0 evolved • “We were at an inflection point and we had two choices: stay where we were and continue to grow, or aggressively go after the next wave of computing–cloud computing.” McCracken • But the firm silo-ed and poorly organized.

  5. CA Technologies’ Reaction and Move to the CloudBuilding from its Legacy of Managing Enterprise IT Complexity • Market grow: 7% - 8% Company grow: 3% - 4% • Submarket grow: 5% • They are in the wrong market, They are in too many markets. • In 2009, We were spending about $600 million on development a year, and had about $1.3 billion a year in cash flow. Yet we were still growing below industry standards. How could we shift things and become thought leaders in this new emerging space?” McCracken

  6. CA Technologies’ Reaction and Move to the CloudGetting Left Behind? • "We were set up for slow growth" Dobson • "We built product vertically, and then sold from the verticals, but customers install horizontally" McCracken

  7. CA Technologies’ Reaction and Move to the CloudGetting Left Behind?

  8. CA Technologies’ Reaction and Move to the CloudReorganizing to a New Strategy • "We have to be fast, swift, efficient, like a start-up." McCracken • McCracken organized the firm along four strategic pillars; • Grow the mainframe business, • Develop SaaS; • Lead security; • Develop virtualization products

  9. CA Technologies’ Reaction and Move to the CloudReorganizing to a New Strategy • Change was not easy. • “We have to be vigilant. Bureaucracy was still a factor; culture can eat strategy every day.” McCracken • The new organization reflected a customer-facing approach. • Nancy Cooper, CFO explained the new logic and next steps, "The strategy shifted us from a geographic perspective to product perspective.

  10. CA Technologies’ Reaction and Move to the CloudReorganizing to a New Strategy

  11. CA Technologies’ Reaction and Move to the CloudAcquisitions • With new strategy, they looked to add to company cloud computing capabilities. • A steady stream of acquisitions from 2008 to 2010. • McCracken and his mergers and acquisitions (M&A) team had about 250 to 300 companies on their radar at any one time. • In nine months, McCracken had undertaken nine acquisitions, 3Tera, Arcot Systems, NetQoS and Nimsoft.

  12. CA Technologies’ Reaction and Move to the CloudAcquisitions

  13. CA Technologies’ Reaction and Move to the CloudAcquisitions • Some worried about integrating these new young companies. • IBM Example • By 2010, 13,500 employees, 3,500 sales support personnel and 5,600 development engineers. • 55% of company revenues was domestic, 45% was international. • Company name changed again.

  14. CA Technologies’ Reaction and Move to the CloudAcquisitions

  15. CA Technologies’ Reaction and Move to the CloudAcquisitions

  16. CA Technologies’ Reaction and Move to the CloudAcquisitions

  17. CA Technologies’ Cloud Computing: Ready for the Cloud? • "The Internet has been transforming from people using browsers to read and access Websites, to a web of “call-able” services—compute, data, business APIs, etc. This is inevitable. He who gets in the way of the Web gets run over by the Web. We had a choice. Lead and help make it happen or be run over and left behind. We chose lead." Donald Ferguson

  18. CA Technologies’ Cloud Computing: Ready for the Cloud? • "I had a gut feeling about it, I knew security was going to be big in the cloud" McCracken • "We found 659 programs. That told us, 'You’re already in the cloud, you just don’t know it'" McCracken • In July 2010, Hansen was asked to take over CA Technologies’ management products and solutions. "Our organization was now aligned to our strategy”

  19. CA Technologies’ Cloud Computing: Ready for the Cloud? • 3 Big areas. • Difference between small and big companies. • Cloud Experiment. • Time, time, time

  20. CA Technologies’ Cloud Computing: Ready for the Cloud?Extending Market Opportunity while Integrating Cloud within the Product Portfolio • Dobson said, "We effectively elevated cloud to be a cross-product unit. Now the question is, how do you influence product management?” • Dobson noted, "Historically, about 85% of our revenues came from roughly 1,000 companies that are $2 billion and above. Move down to the $300 million to $2 billion sized companies, where there are 14,000 companies for us to harvest. These companies are far more eager to go to the cloud. And the solutions they need or want are much lighter and their TCO is much lower."

  21. CA Technologies’ Cloud Computing: Ready for the Cloud?Extending Market Opportunity while Integrating Cloud within the Product Portfolio

  22. Bringing the Cloud Down to Earth • "This move to the cloud is not an adjacency, it’s a transformation at our core" voiced by a different executive. • "How do we communicate the value of our past experience without positioning ourselves out of cloud computing? How do we change the perception customers have of us without destroying our sales advantage? Are we going to be perceived as mainframe guys dabbling in the cloud, or as a truly transformed cloud provider? If we succeed in communicating the latter view, is that actually good for us?" Famularo • McCracken was convinced the industry was at a critical inflection point. • And the future…

  23. Cloud Computing Competitors, 2011

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