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CA's Clarke chills in the City

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Computer Associates' operating officer, Jeff Clarke, was in town today to mop the fevered brows of investors who have stuck with the company during the US fraud investigations. Clarke has twenty years experience in the industry, most recently at HP and Compaq - he joined CA early last year.

He told us what it took to get the company back on track and where it goes from here.

Tomorrow Computer Associates will restate results for the last five years laying to rest a government investigation which led to several CA execs pleading guilty to fraud charges. Former CA boss Sanjay Kumar and sales chief Stephen Richards were hit with charges spanning securities fraud, conspiracy and obstruction of justice over a $2.2bn hole in the accounts. The firm paid $225m to settle the DOJ and SEC investigations.

Jeff Clarke said the company has gone through major changes in the fifteen months since he took over: "We've got a different senior team, different systems in place, better funding for auditing and better record management."

Looking at why the problems occured when they did Clarke said: "It's bad judgement by management - that's the common thread. And short-term thinking and illegal behaviour - when it happens the board must step in."

He said CA had moved to a conservative accounting system which defers revenue and takes pressure off revenue recognition. He said building a system of checks and balances was important. Changing senior management is also vital: "the tone at the top counts".

CA has made five acquisitions in recent months, including firewall maker Tiny Software, Niku and Concord Communications, totalling over $1bn. Clarke said the buys will bring growth. He predicts fastest growth in security and network management - two areas he sees as increasingly integrated.

Clarke said the company's main competitors are IBM, which is too focussed on DB2 and WebSphere, and Symatec/Veritas which lacks systems management experience and comes from providing consumers, rather than business, with software.

The company is considering tweaking its name and logo to further underline its resurrection. The firm may in future be known as CA, rather than Computer Associates. ®

Related stories

CA makes Tiny personal firewall buy
CA to restate five years of figures
CA boss admits long road to recovery
CA re-organises management

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