"Cultural integration is key to our successful acquisitions"

by Sharon Lobo    Oct 25, 2012

Ken Arredondo CAOver the last few years CA Technologies has been on an acquisition spree, in a bid to build its cloud strategy. In 2010, the company had acquired Nimsoft, which was viewed as an important buy as it would enable CA to cater to the IT management needs of emerging enterprises and MSPs, both of which play key roles in the growth of cloud computing. In an exclusive interview to CXOtoday, Ken Arredondo, GM – Global Markets, CA Technologies talks about Nimsoft since its acquisition and the trends in cloud adoption. Ken, who is also a member of CA Technologies’ senior leadership team explains why CA has been so successful with so many acquisitions in times when many companies continue to struggle with one. Excerpts.

In order to strengthen its cloud portfolio, in the last one decade CA has invested close to $ 2 billion in acquisitions with Nimsoft being one of the most expensive buy. How do you see this strategy paying-off in a market like India, which is majorly driven by SMEs and who are still skeptical of adopting cloud computing?
We at Nimsoft define cloud by enabling our partners like service providers across the globe to address remote infrastructure management (RIM). Currently, the Indian market is most mature when it comes to the adoption of RIM as compared to other CA offerings. There are a couple of reasons for this trend, one is the obvious dominance of large Indian system integrators in the worldwide market. Secondly, it is the growth of SMEs in India which contribute 38 percent to the overall growth of the RIM market which is growing at 16 percent.

In terms of adopting the cloud, I think as people get comfortable with the idea, concerns pertaining to security will subside. For instance, online banking faced similar resistance from users, however today every other person transacts using it. Having said that, obviously, if there is a major breach, cloud might face a setback, but considering the security solutions available to secure the cloud it is a remote possibility.

I do agree that the adoption of cloud solutions amongst SMEs is slower when compared to large corporates, even though one would expect the opposite to be true. As a result, we believe in empowering our local partners to provide SMEs the required comfort level as they move to the cloud.

Mainframe is still the bread and butter for CA. How do see the cloud strategy changing this trend?
Mainframe has been the core of CA from the old days. We leveraged this base for our cloud strategy and Nimsoft was the key acquisition for us. This acquisition has helped us to focus on the xSP, MSP (managed services provider) and CSP (cloud services providers) space. Also, with the latest release of Nimsoft features new enhancements that enable our partners grow faster.

As cloud adoption increases, in future there is bound to be regulatory body setup to regulate the cloud. What kind of challenges are businesses likely to face then?
Currently, businesses do have concerns over where their data resides. However, these concerns wouldn’t necessarily be addressed by the cloud regulator but in fact by specific laws that are being passed across the world. For instance, Singapore recently passed its Personal Data Protection Act. We at CA have datacenters across the world and have a SaaS environment, however our major focus is not to be a SaaS provider but to enable SaaS providers. This model enables us to reach customers in every country without actually us setting up datacenters in every country.

In most businesses, especially SMEs, the CEO’s decision holds precedence over the CIO’s in IT deployments. What has been your experience while dealing with such businesses?
In my experience even in western Europe and US the CIO is viewed as a cost centre. However, as the CIO’s role evolves the CIO of the future will be a service’s broker in order to maintain integrity and control of the environment. Additionally, the CIO must position himself as a business value addition.

Acquisitions bring along challenges such as culture clash. How has CA been able to address these issues inspite of its acquisition spree?
This is something CA has continued to better over the years. I myself joined CA, when it had acquired Netegrity. What CA has learned to do is to provide a little autonomy to the acquired organizations and give them time to get used to CA’s culture. For example, couple of years ago when we acquired Nimsoft, we ran it as an autonomous unit and only now have we merged it with proper CA. During the last two years, we worked together and closer with the Nimsoft team and also enabled Nimsoft to leverage the assets of CA and the relationship with CA without losing the integrity of Nimsoft’s spirit.

Another reason we are successful at acquisitions is because we integrate the culture of the new organizations. However, this is not easy and neither it works all the time. We also lose a few individuals in the process but we still manage to retain a major chunk of our human resource.