Services, channel to fuel CAI's growth

Services, channel to fuel CAI's growth

Future growth for software vendor and enterprise integrator Computer Associates International (CAI), will come from expanded services and indirect sales operations according to its CEO, Charles Wang.

Speaking in New Orleans yesterday just before opening CA World '99, the software giant's 30,000-delegate users and partners convention, Wang said "indirect" sales had grown from "zero six years ago" to "30-35 per cent of total revenues" today.

Further, he is expecting channel sales to reach 50 per cent at some stage in the next five years. "Our direct sales force has a list of accounts which it has traditionally been servicing all along -- usually large enterprises with mainframes," Wang said.

"The indirect sales force focuses on all of the other small and medium business markets that may not have mainframe operations as well as departments of its enterprise customers that are focused separately."

Wang said the growth of channel sales has come from the acquisition of Platinum Technology as well as new channel demand for CAI's storage area network and enterprise antivirus solutions.

"We are now very focused on producing products exclusively for the channel, but have now also taken half of our sales force and focused them on the channel sell," he said.

"If we make that sort of investment long term, I think the spread of what we can do in terms of engaging SMEs will be through these third parties. We are just not going to have the manpower to do it ourselves and we recognise that.

As far as services are concerned, Wang said CAI will continue to search for new acquisition targets and he confirmed it was on the hunt for a services operation in Australia as well as other geographical holes in its operations.

"We are currently at a run rate of $US6-700 million," he said. "This is a very significant increase from the $2-300 million we did last year. We hope to achieve a run rate of $US1 billion by the end of the year."

Wang said that the philosophy on growing services is the same as it for the products division. "We grow the business in three ways. We grow internally, we acquire and then we integrate," he said.

* Gerard Norsa travelled to New Orleans as a guest of Computer Associates.

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