CA narrows strategy, sells off applications

Computer Associates International Inc. is usually on the buyer side of technology deals. But last week, the software vendor was in selling mode.

CA disclosed that it has sold most of its manufacturing and business applications to Chicago-based SSA Global Technologies Inc., a long-struggling company that previously was known as System Software Associates Inc. The deal includes the supply chain, finance and human resources product lines from CA’s interBiz division.

Officials at Islandia, N.Y.-based CA wouldn’t comment in detail or disclose the purchase price. But CEO Sanjay Kumar foreshadowed the deal during a February interview, saying that the interBiz applications needed “more critical mass” in the market than CA had been able to achieve.

The sell-off could benefit companies that use such interBiz products as ManMan, Masterpiece/Net and PRMS, users and analysts said.

Warren Smith, IT director at the Victor Reinz division of Toledo, Ohio-based auto parts maker Dana Corp., said CA has had trouble focusing on its core software products while also trying to maintain the aging interBiz applications.

Victor Reinz, which makes vehicle engine components, has used the ManMan manufacturing software since 1986, long before CA bought the interBiz applications in a series of acquisitions. The sale to SSA “will be a good thing for us,” said Smith, who is also president of the Computer Applications for Manufacturing Users Society International Inc., a San Jose-based user group.

Bob Anderson, an analyst at Stamford, Conn.-based Gartner Inc., said that interBiz never really fit with CA’s overall strategy or its other product lines. The applications should “be a substantial part of SSA’s business going forward,” he said. “They were kind of on the back burner with CA.”

SSA, which was bought two years ago by a turnaround firm, said it hopes the interBiz applications can help it regain a leadership position in vertical industries such as automotive and consumer goods.

The company expects to lay off about 325 of the 725 interBiz employees who are being shifted from CA as part of the deal, said SSA CEO Mike Greenough. But he said SSA is making a “very clear” commitment to extending the life of investments made by interBiz users.

“I’m not particularly worried about the products,” said Andrew Winer, CIO at Myers Industries Inc., an Akron, Ohio-based maker of plastic and rubber goods that has used PRMS and Masterpiece for more than 10 years. But a face-to-face talk with SSA executives would make him feel more comfortable, Winer added.

CA also said revenue for its fourth quarter ended March 31 will total about US$770 million, in line with earlier predictions. But it will report a sixth straight quarterly loss.

(Reporter Marc L. Songini contributed to this report. )