Computer associates software support

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Accelerated Data Analytics. Accelerated Early Childhood Education Leadership. Accelerated Finance. Accelerated Healthcare Management. The company sells over 1, different products, most of which are designed for businesses rather than home computer users.

Because the majority of its products are behind-the-scenes workhorses designed to help big computer networks function, CA's specialty is often called "plumbing" in the software industry.

Approximately half of the company's revenue derives from products associated with mainframe computers. CA is the market leader in designing software for managing corporate networks. The company also has a large share of the market for data security and data storage. Other products manage data for wireless networks and run Internet applications.

Over 95 percent of Fortune companies use CA software. The company grew enormously through acquisitions, buying up some 60 companies in its first 20 years.

Founder Charles Wang gave up the chief executive position in , but remains chairman of the board. Computer Associates was founded in by Charles Wang. Born in Shanghai, Wang moved with his family to the United States in when he was eight years old. His father had been educated at Harvard and was a supreme court justice in Shanghai, but had to start over in the United States.

Two of the sons also studied law, while Charles studied math and physics at Queens College. After his graduation in , Wang took a job as a trainee computer programmer. Though he had little background in the field, Wang took an instant liking to programming. At this time, large, expensive mainframes were the most important computers, and the software industry barely existed. IBM, which sold most mainframes, included basic software in their price, and all customized programming was done in-house.

In , the U. When CA decided to establish its own business in the United States, Wang saw an opportunity and in began Computer Associates International as a joint venture with the Swiss company.

With only two partners and a tiny Manhattan office, Wang limited himself to marketing software by telephone. The company was at first funded only by Wang's various credit cards. After an initial failure, he succeeded with CA-SORT, a program enabling computers to sort through data quickly and economically. Mainframe software was licensed rather than sold, and the recurring revenue from the licenses of the SORT software was a great boost to Computer Associates.

Computer Associates began expanding, hiring salespeople and programmers, and in Wang's brother Tony, a lawyer, joined the firm.

Wang's success allowed him to buy out the original Swiss company in The company went public in Capex, which was half of CA's size, sold support software for programmers. In , Wang purchased Stewart P. With these purchases, Computer Associates became the top independent vendor of system utilities, with a continuing specialization in data compression. His purchases also brought some software for personal computers, which was the fastest-growing segment of the computer market.

CA's main focus at this time was on products designed to improve the performance of IBM equipment. Each time IBM upgraded its computers, it kept portions of old designs so customers could continue to run their older programs; as a result, IBM mainframes were powerful but inefficient. This market presented a particular opportunity for CA because IBM did not make an effort to market products that pointed out defects in its computers; therefore Computer Associates did not have to compete against IBM's larger resources.

The firm also continued to attempt to break into applications software, which was earning firms like Microsoft Corporation and Lotus Development Corporation huge sums of money in the personal computer market.

Despite this new applications strength, system utilities still accounted for 70 percent of Computer Associates' revenues in Uccel had been a competitor in the market for systems utilities software, so the purchase strengthened Computer Associates' already strong systems utilities sector, adding 7, customers to CA's base of 26, while eliminating a rival company.

The purchase temporarily made CA the largest independent software company, ahead of Microsoft, whose strengths lay in software for personal computers. CA also had far more products, marketing about kinds of software to Microsoft's 26 and Lotus's These shareholders suffered enormous losses once the practices were revealed. There was another class of victims as well — employees.

Richardson notes that companies are not required to keep mum about revenues received after a reporting period ends. In theory, investors should care little whether a deal is signed by the end of the quarter or a few days later, so long as the details are accurately reported.

But in practice, investors tend to focus on the quarterly revenue and earnings targets. Moreover, executives at Computer Associates were big shareholders themselves, and many held enormous blocks of stock options. They therefore had a big financial stake in the share price, and thus an incentive to inflate results.

While outside auditors are sometimes blamed for not catching the practice, auditors must rely on data from their clients, and timing infractions can be very hard to spot, according to Richardson. Richardson argues that boards of directors and their compensation committees in particular should be careful not to inadvertently give executives incentives to cook the books.

Richardson does not believe the Computer Associates case and others like it point to the need for regulatory reform. The accounting flexibility available to public companies is necessary, he notes, even though it makes some breaches hard to detect. If you eliminate choice, statements will be meaningless. The best way to address cases like that of Computer Associates is through rigorous enforcement of existing rules and severe punishment for violators, he suggests.