Platinum buy signals CA's services march

Platinum buy signals CA's services march

It may have not been the primary objective, but Computer Associates (CA) was catapulted into the Australian services scene with its $US3.5 billion buyout of Platinum Technology last week.

The buyout represents a massive shot in the arm for CA's Australian operations and will see the vendor shortly take the reins of Platinum's significant services division, which currently employs around 180 staff.

From a product perspective, the acquisition, which won't be signed off for at least another two months, appears to offer few overlaps, with Platinum's expertise in knowledge management, data warehousing, database tools and application life cycle management complementing the technologies in Jasmine, CA's object-oriented database.

However, it's clear that the services component of Platinum's business was the real cherry in the deal for Australia.

Speaking to ARN last week, CA's managing director and Australian divisional manager John Ruthven suggested Platinum's "large" services arm certainly kick-starts its drive into that market.

"The deal fits hand in glove with what we are trying to achieve locally," Ruthven said.

But he was quick to hose down suggestions that CA would be satisfied with just the Platinum buy.

"Our strategy in acquisition is reasonably mature at the moment. For now we will focus on integrating the expertise that Platinum brings in the areas of enterprise management."

CA's buyout announcement came as somewhat of a surprise to Platinum Technology's managing director Ric Day. However, he did admit that CA had definitely showed "some interest in the services side of our business".

Day suggested the injection of Platinum's sizeable service force, which spans each capital city, will represent a "major boost" for CA as it embarks on its services foray.

While details regarding staff cutbacks remain sketchy at this early stage of negotiations, both Day and Ruthven appeared confident that Platinum's services team would remain largely intact.

"Our intention is that we will be working on the integration of all Platinum service staff into the new organisation," Day claimed.

Ruthven said staffing issues "haven't been a discussion point as yet" at CA, but he added that the vendor has implemented a hiring freeze to cater for the impending merger of Platinum staff.

The Platinum acquisition represents a major break for CA, which had not expected to secure an Australian services presence until mid-1999 (ARN, February 24, page 12). At the time, it said it was looking for an acquisition which would deliver around 200 services staff. This acquisition could mean, therefore, that CA can satisfy itself with a smaller, more targeted buyout.

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