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1/24/2005
02:15 PM
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CA To Shift To Business-Unit Model

Computer Associates has signaled its intent to shift its emphasis from brand units to business units. To implement the strategy, the company has promoted co-founder Russ Artzt to the position of executive VP for products and Mark Barrenechea as executive VP of strategy and chief technology architect.

Computer Associates has signaled its intent to shift its emphasis from brand units to business units. To implement the new strategy, the company has promoted co-founder Russ Artzt to the position of executive vice president for products and Mark Barrenechea as executive vice president of strategy and chief technology architect.

The move, announced Friday in a letter to employees by the CA president and CEO-elect John Swainson, in many ways follows the business structure of IBM, which has business units such as IBM Software, Tivoli and Lotus, where each is accountable for its own P&L, yet the groups share intellectual property as needed.

"The business unit structure has proven itself an incredibly effective model in this industry and is a natural next step for CA," Swainson said in his letter. "eTrust is a successful example of what a business unit and its people can do when they control their own development resources and marketing efforts."

Swainson has tapped Artzt to lead the shift to a business-unit model. Pivotal, though, will be that CA maintains its effort to integrate solutions, and that its enterprise infrastructure management strategy remains a "competitive edge" for CA, according to Swainson. Toward that end, Artzt will continue to report to Swainson and serve as head of the new eTrust unit.

"Moving to a business-unit structure is truly a transformational effort," Swainson said.

The choice of Artzt, who, along with Charles Wang, helped co-found CA in 1976 and wrote much of the early code in the company's products, was a good one, says Todd O'Bert, CEO of Productive, a Minneapolis-based solution provider and CA partner.

"Russ has been one of the original members of the CA team, and he is held in high esteem from partners and people within the organization, so it's a good sign that even though CA is evolving, it will rely on some of the people that helped make CA what it is today," O'Bert said.

Longtime CTO Yogesh Gupta will remain in his current role, according to a company spokeswoman. The company declined to discuss the reorganization further.

Nevertheless, according to Swainson's letter, look for CA to be active on the acquisition front as well, according to Swainson. Barrenechea will work with COO Jeff Clarke to identify potential acquisition candidates.

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