CA-World: Apps business isn't visible enough, says CEO

There wasn’t enough business coming out of the business applications market to satisfy software behemoth Computer Associates, according to CEO Sanjay Kumar, which is why the company has sold off its interBiz division.

CA, a company better known throughout its 26 year history, for its voracious devouring of other software firms, has sold off its interBiz business applications division to SSA Global Technologies for an undisclosed cash sum. The sell-off is significant as this is the first time in over a quarter of a century that CA has actually sold off a business rather than acquiring one.

“The reality is that interBiz was too small and not visible enough to be a success on its own,” explained Kumar on the opening day of the annual CA-World user conference in Florida this week. “We had two options: either we acquired something else or we found someone else to acquire it. Business applications are not our core competency.”

The sell-off includes interBiz’s ManMan manufacturing resource planning applications – once a market leader in its own right in the pre-ERP era -, the Warehouse Boss warehouse management applications and the interBiz Logistics portfolio.

Kumar added that a benefit of the sell-off would be an added ability to do new partnerships with big applications firms, citing SAP and Oracle as examples. "This will make them look at us more neutrally than before," he claimed.

There are around 4,000 customers worldwide of the interBIz applications, which will boost SSA’s installed base to 10,000. SSA expects the acquisition to boost its sales in fiscal 2003 to as much as $250 million from its current level of around $150 million.

CA continues to maintain a presence in the applications space through its Accpacc division, based out of Canada and run at arms length as an independent subsidiary. But there were reports at CA-World of instances of customer dissatisfaction at the way the Accpacc operation is being run, with particular concern cited about upgrade policies.

Questioned about this, Kumar denied any knowledge of any problems, but conceded that the Accpacc portfolio is listed on CA’s own web site as part of its product set. “Accpacc has been run independently of CA for 12 or 13 years,” he said. “They have complete autonomy, although they are a part of CA. They are so independent that I do not know about any changes in policy that might have been made.”

Analysts have given a cautious welcome to the interbiz divestiture. Gartner Group said the move would enable SSA to enhance its iSeries – formerly AS/400 – ERP offerings – and added that it would enable the company to drive into additional areas. “The company will attempt to extend the life cycle of these offerings by providing integration to additional SSA application functions, eg CRM,” said Bruce Bond, Gartner analyst in its Manufacturing Application Strategies division.

Butler Group also commended the move, arguing that the interBiz operation looked out of place within CA anyway. “The company’s emphasis is much more on software to control the business rather than applications to directly run it,” it said in a report. “The various interBiz applications never seemed a really good fit. All in all, the transfer to SSA would appear to be a good move for both parties and could stir up trouble for some of the other mid-market ERP players.”