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MAINFRAME SOFTWARE VENDOR IS CHANGING ITS PRODUCT MIX-AND IMAGE
Computer Associates is in the midst of a remarkable transition. The once unfashionable mainframe software vendor is becoming a leader in the emerging market for distributed enterprisemanagement products.
CA's client-server revenue surged by nearly 50% during the fiscal year ended March 31, accounting for more than one-third of the company's total revenue. In contrast, mainframe software revenue grew at a snail's pace for the full year and actually declined, year over year, during the second half. Overall, CA's revenue grew about 15% to just over $4 billion. "Four to five years ago, our revenue was 95% mainframe based," says Charles Wang, CA's chairman. "Today, client-server revenue alone is $1.4 billion. If anyone has made a dramatic shift, it's CA."
Indeed, CA's Unicenter distributed-management software is taking off and the company's acquisition last year of Cheyenne Software also boosted client-server revenue. Sanjay Kumar, CA's president and chief operating officer, says Unicenter now accounts for one-quarter of sales at the Islandia, N.Y., company-and that's just the start. Within five years, he predicts, Unicenter could be a $5 billion business.
CA's overall growth will slow slightly next year to $4.6 billion, with the contribution from clientserver products climbing to about 40%, estimates Sanjiu Hingorani, a managing director at Furman Selz, a New York financial firm. Analysts say CA's mainframe revenue is slowing because mainframe Mips shipments have slowed after a spurt caused by pent-up demand for IBM's low-priced CMOS units.