CA NZ turns to new strategy in 'best year in five'

Computer Associates New Zealand is about to unveil a major new corporate strategy as part of what the company says will be a bumper year.

Computer Associates New Zealand is about to unveil a major new corporate strategy as part of what the company says will be a bumper year.

It plans to introduce new licensing options and will reorganise its product groups, as it wraps up what managing director Richard Collins claims is its best year in five years.

In its annual report for the year ended March 31, 2000, lodged with the Companies Office in late December, CA (NZ) reports an on-paper loss of $3.3 million, following a loss in the 1999 year of $3.5 million. It also shows total operating (sales and maintenance) revenues of $11 million.

But Collins says this does not accurately reflect the company’s true position because it conforms with American accounting methods used when subsidiaries are reporting sales and royalties to a US parent.

While Collins says the New Zealand arm “is already in the black” – but will not give any details – he is also reporting a major leap forward for this year soon to finish.

Collins says the first three quarters of the current year show the local company heading for its best year in many, with at least 15% growth over last year in its business channels and a stable reseller market.

“This is the best year in five to six years with a quarter still to go,” he says.

Collins says stand-out areas have been in sales of Sterling’s applications and management software, and within the e-business group, IBM’s OS/390 mainframe products have been strong. He also says Platinum products have been merged into the information management group with that sales team increasing by 20% and well ahead of their year-end target.

His enterprise management group, incorporating the flagship management product Unicenter, has also done its numbers for the full year by the end of the third quarter.

But Collins is loath to give away any more before making announcements of the company's new strategy over the next two weeks. This strategy will include changes to the product groups, the launch of client-determined licensing and subscription deals – something the parent company has already been doing – and logo and marketing changes.

This comes soon after its parent company launched a worldwide $US100 million advertising campaign in attempt to change firm’s image to an e-business vendor.

Hardware and traditional software houses have had a hard time over the past year or so with dramatic drops in sales, especially in databases and ERP systems. CA (NZ)’s own parent company reported a 69.1% plunge in operating profits in its first quarter for this year.

But some positive changes in local mainframe businesses are being seen with IBM New Zealand and Unisys posting a profit (see stories).

Last week CA International posted its third quarter results in the new reporting format, showing total revenue had increased by 5% to $US1.40 billion. It said earnings per share, at $0.42, had beaten analysts’ predictions by $0.02 and the next quarter was looking strong.

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