The marketer of systems, information and business management software products competes in a crowded field with the likes of IBM Corp. and Siebel Systems. It's now looking to differentiate its portfolio with a new image effort set to break on TV around Oct. 1.
Computer Associates will need all the help it can get.
For its fiscal first quarter ended June 30, net income was $23 million compared with a loss of $432 million for the same period in 1999. Revenue of $1.13 billion dropped 7.6% and.the company's stock fell 4% on warnings portending dismal financial results. The stock closed Aug. 2 at $24.50, down from a 52-week high of $79.44 on Jan. 27. Executives blamed the weakness on a sales decline in mainframe software.
One Wall Street analyst said Computer Associates' problems are due more to internal operational issues, rather than the competitive environment. "What they're dealing with now has to do with the fact that [corporations] are trying to Web-enable their enterprise and they don't have time to focus on the mainframe environment," said Melissa Eisenstat, executive director, CIBC Oppenheimer. She said the recent acquisition of Sterling Software has also plagued the company because of integration issues.
Ms. Eisenstat believes Computer Associates' business will pick up in the fall, adding that the use of an ad campaign at this time is a good idea.
As expected, Computer Associates has tapped Y&R Advertising, New York, its agency of record to help create the global campaign (AA, July 24). Ken Fitzpatrick, general manager of global marketing at the marketer, will oversee the campaign's execution as well as all marketing strategy. He reports to Sanjay Kumar, president-chief operating officer.
In his new role, Mr. Fitzpatrick has beefed up the marketer's brand management ranks and is working to consolidate more than 900 products into four categories: e-business applications, e-business management, e-business platforms and e-business intelligence.
"These categories represent a portfolio of solutions," Mr. Fitzpatrick said, "I've made it real easy for anyone within CA to articulate what this broad and deep `volcano' of technology is sitting on."
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The designations sound familiar -- other technology companies have hammered at ad nauseum. "I think e-business is almost legacy. . . . I'm already strategizing the next steps," Mr. Fitzpatrick said.
Under the four umbrella categories, Mr. Fitzpatrick said he aims to highlight flagship brands, such as Computer Associates' E-trust security management software.
Mr. Fitzpatrick, an IBM Corp. veteran, is "hell-bent" on articulating Computer Associates' leadership in e-business platforms such as its Jasmine ii software, which will be featured in forthcoming TV and print.
"We want to convey the corporate brand and image in clear, powerful terms and to address and advertise our brand segments," Mr. Fitzpatrick said.