Aug 8

CA’s Automic and Veracode Acquisitions: Toxic Waste For Mainframe Customers?

by Christopher O’Malley 

In January, CA acquired Automic for $640 million and, in April, acquired Veracode for $614 million.

At first glance, CA customers might view these acquisitions positively. Automic had some interesting cloud automation capabilities. Veracode had excellent technology for application security testing. Together, the two acquisitions seemingly support CA’s desperate longing to be relevant in the non-mainframe DevOps toolchain market.

But, if you’re still depending on CA for mainframe software, this $1.25+ billion spending spree is yet another sign that CA ain't your friend. If you don’t wean yourself off their mainframe development tools soon, you’ll be stuck with core systems-of-record that are not Agile, while using tools that are the equivalent of Kryptonite to your next generation of DevOps super heroes.

And that’s bad for your business. Very bad.

Milking the Mainframe

CA admittedly uses its mainframe business as a "cash-cow in the basement." In recent years, CA has milked its mainframe customer base for the money required to fund forays into other markets. These forays have almost never lived up to there promises for CA customers, acquired employees and CA shareholders—but, CA, desperately undeterred, just keeps milking mainframe customers for acquisitions dollars it can squander on their next great hope.

This mainframe-averse strategy has left CA customers disadvantaged with SCM tools like Endevor, Panvalet (now stabilized) and Librarian (now stabilized), bound to outdated Waterfall processes and left developers to toil with painfully-inferior CA tools like InterTest, File Master, SymDump and Mainframe Application Tuner. And, CA’s mainframe business unit employees have it no better. They've become collateral damage to relentless budget cuts executed to solve for CA's profit targets. Over the last few years, CA has cut over $100,000,000 from their annual Mainframe Solutions budget. Yet, somehow, CA shamelessly counts on its mainframe customers to keep paying outlandish license and usage/maintenance fees—while, in return, CA pretends to be something they're not, while struggling to even maintain currency with the latest version of IBMz operating system software.

Some CIOs thought they could live with CA’s failure to innovate because their mainframes would soon go away. But, that’s not happening. The mainframe is a proven home to invaluable and irreplaceable systems-of-record that are simply too finely crafted, too reliable, too secure and too scalable to re-platform. To prove the point, surveys have found that ~90% of CIOs believe the mainframe will remain strategic for a decade and beyond.

CIOs also rationalized their acceptance of CA’s mainframe complacency by imagining that they could allow their systems-of-record to languish with just a few code drops annually, while they pushed their systems-of-engagement towards continuous delivery. But, you can only be as fast as your slowest digital asset. Your business can’t be fast and agile unless all your platforms—front-end and back-end alike—are fast and agile.

CA won't get you there. They seem compelled to support CA's stock price through an endless series of acquisitions in the futile hope of achieving non-mainframe relevance. This single-minded strategy has caused mainframe innovation to approach zero—much to the detriment of CA's customers that urgently need to bring essential Agile and DevOps practices to the mainframe.

What’s a CIO to Do?

CIOs who recognize the critical importance of mainframe Agile and DevOps transformation can respond to CA’s diversion of mainframe dollars to non-mainframe acquisitions in three ways:

Of course, you can also continue funding CA’s acquisition spree with your precious mainframe software budget. But those desperate CA acquisitions are toxic waste for your mainframe and your business—and should be dealt with accordingly.

Compuware has never been more ready, willing and able to help mainstream the mainframe for DevOps and Agile methods. Please give us a call.

Update

Since the time I originally wrote this Blog, CA published their latest financials (on 8/2/17). CA’s Mainframe Solution business unit suffered its largest quarterly cut in two years: ~$20M—which amounts to ~$80M on an annual basis. These cuts are in addition to those mentioned above. Based on CA’s just-released 10-Q, these cuts are, “primarily due to a reduction in personnel-related expenses in the first quarter of fiscal 2018.”

Where did CA mainframe customers’ upgrade and maintenance dollars go? To fund the increased operating expenses from newly acquired Automic and Veracode. So, this answers the question raised in the title of the blog, “CA’s Automic and Veracode Acquisitions: Toxic Waste for Mainframe Customers?” with a clear, definitive and painful—YES!

Many of the comments from CA employees that follow below weren't worth a response, but what is worth noting is that all of those CA employee comments demonstrate a complete lack of concern or sense of responsibility to the effects of CA's mainframe budget cuts on CA's mainframe customers. The consistent pattern from commenting CA employees is to ignore the facts; lash out; and attempt to change the subject with some diversion tactics being more creative than others (I can't ever recall being compared to a disobedient dog before).

I'm trying to imagine what it would be like for a CA employee that felt compelled to stand up, within CA, against these systematic cuts. I'm guessing it's a case of, "Show me a CA employee that stood up for mainframe customers against CA's mainframe budget cuts and I'll show you someone that doesn't work at CA any longer."

There are times when something is wholly wrong within an organization and a healthy culture is essential to fix it. You can completely understand how a culture, built on intimidation and fear, that's void of a humble obsession for serving customers would drain all the courage out of anyone and ensure more of the same.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Enterprise Systems Media.