CA eyes bigger share of enterprise market

Computer Associates (CA), the world’s third largest software company, now wants to capture a bigger chunk of the Indian market with a new aggressive strategy. Srikanth R P has the details

Computer Associates wants to leverage its relationship advantage and cross-sell other CA products in a more aggressive manner to the existing installed base, says Ninad Karpe

The business approach of Computer Associates (CA) in India has been unlike any other software company. Unlike the Big Bang approach of almost every software product company, CA’s approach in India has been more of trying to understand the market and then setting the pace for its growth. Now, after a few years of moderate growth, CA believes it is the right time for the company to change gears and step on the accelerator for higher growth.

For the current year, CA in India is targeting a growth rate of 70 percent and an average growth rate of 50 percent for the next three years, up from an average growth of 25 percent over the last few years.

CA already enjoys a dominant position in India with its infrastructure management suite, Unicenter installed at over 150 sites. Ninad Karpe, the new managing director of Computer Associates in India, wants to leverage this advantage and cross-sell other CA products in a more aggressive manner to the existing installed base. As an enterprise infrastructure management solution helps in managing the entire IT infrastructure of an organisation, ranging from servers to handhelds and other office equipment like fax machines, CA has been perceived more as a consultant rather than an IT vendor. CA would be looking at leveraging this image and cross-selling other related products in areas like storage (Brightstor) and security (eTrust), from CA’s portfolio of over 1200 products.

Optimism for growth comes from the fact that most enterprises in India have spent huge amounts in building infrastructure and linking up their offices or factory outlets. But not many corporates or organisations have invested in solutions for managing their IT infrastructure. Karpe believes that over 60 percent of the market is still untapped and says that CA being in a leadership position is uniquely positioned to take advantage of this market.

CA is also banking on its customer list built gradually over the years. The list boasts of reputed names like HDFC, GAIL, L&T and UTI Bank, who have been using CA’s infrastructure management suite. Says Karpe, "The Indian market is unique in the fact that every customer demands a reference customer before buying your software. We have gradually built up the reference customer list and can even show a prospective customer the benefits that have been derived by other customers."

While CA has been strong in three areas in India, namely infrastructure management, storage and security, Karpe now wants to make CA a dominant force in the knowledge management and business intelligence (BI) space too. The BI space is a high growth area and CA with its image and installed base wants to capitalise on this opportunity. Market research firm Frost & Sullivan estimates the current BI application market in India at $10.7 million. By the year 2005 this market is expected to touch $30.4 million, growing at a CAGR of 33.9 percent—clearly a high growth market for CA to explore. CA also plans to play a bigger role in the mainframe market with its software solutions as margins in the mainframe market are pretty high due to the paucity of mainframe solutions in the Indian market.

While enterprise solutions like Unicenter would provide CA mindshare, the SME segment will give CA the volumes. For instance, CA’s storage product ArcServe is sold through channel partners and has a dominant market share in the storage backup market. CA India plans to introduce more such products from CA’s product portfolio, which would help the company in increasing revenues from the SME segment.

CA also plans to encourage more Indian software developers to develop value-added offerings for CA’s products. A well-known example is the UPS product developed by Mumbai-based Aftek Infosys, which can be integrated with CA’s Unicenter-TNG. It has been a win-win situation for both the companies. From CA’s viewpoint, it increases the value of the product and for Aftek, CA’s reach and brand image give it the opportunity to tap the market it needs. Already, around five Indian companies are at various stages of discussion with CA to develop add-on products for CA’s product portfolio.

With a well thought out strategy and an installed base in place, CA could be the enterprise player to watch out for in the coming months in India as it looks for an exponential phase of growth.