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Cloud to Earth

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Q.1 Evaluate CA Technologies’ decision

CA Technologies’ is a company which has been providing solutions and software to streamline and automatize mainframe systems since 1976. The IT sector is a fast moving industry and more and more capital is being invested by companies in getting and maintaining an up to date IT system. Furthermore, the typical business computing system as developed from the typical Mainframe setup to a Client/Server setup and then into a Grid setup.

All this while, CA Technologies’ made the right business decisions and kept growing through diverse acquisitions, will to keep up with the technology evolution and constant effort in remarketing its own image to better reflect the panel of software and solutions the company has been offering. Consequently, as of 2010, CA Technologies’ accounted over 60% of its revenues from Mainframe business.

For the past few years, the consensus on the Mainframe computing model and its future is far from being positive. Whether or not this concern is justified is still a mystery as the Mainframe setup, nowadays often in guise of a server, still serves overs 4000 majors organizations worldwide. However, the appearance of a whole new kind of setup where the information is stocked in multiple locations, hence the name of “Cloud” Technology, and which can be accessed from anywhere with a device capable of connecting to the Internet is a new factor that CA Technologies’ has to take into account today. Moreover, the market is estimated to evolve from the $40.7 billion in 2011 to a $241 billion by 2020 which make it very hard to ignore. Finally, to the argument stating that the cost of implementing a Cloud Technology for a company is just too high to compete with more traditional structures, it has been shown that the Cloud system proves to be cheaper in the longer run and that unexpected positive effects appear and finally makes the Cloud technology a worthy investment.

CA Technologies’ is at a crossroad just like it was before with the Server/Client architecture, and just like before, it decided to compete on this new technology. On the IT market, where everything moves and change so fast, time is luxury that a company seldom has. Once again, CA Technologies’ decision led to acquisitions of several software companies already specialized in the Cloud technology which are perfectly aligned with the need to have things done fast. As such, I believe that the decision to move to cloud service provision was the right move to make and the way CA Technologies’ executed it appears to be adequate and professional.

Q. 2 What would you change about that move? What are the risks?

I strongly believe that CA Technologies’ non-solely made the right call by deciding to offer Cloud solutions but also executed it in a very convincing way, through the acquisitions and creation of a new and dedicated department while at the same time maintaining its mainframe activity. If anything, CA Technologies’ should work on resolving employees questions and doubts – through seminars, meeting and conferences – regarding the decision to offer Cloud solutions as it is important to have an alignment within the company.

Finally, in this area of expertise, I believe that CA Technologies should work on getting a more proactive active approach rather than their current very reactive approach they currently have: on the IT market, a company should think about what is coming next rather than whether or not the company should follow up. This would have several beneficial effects; the two mains are:

* Generating saving through internal development as opposed to external acquisitions and ability to work over company image over time. * Likeliness to become one of the references on the said technology.

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