Can CA Technologies Adapt To Change?

The focus of this article, “Can CA Technologies Adapt to Change” by Peter Cohan, is centered on the growing competition between CA Technologies, one of the largest independent software corporations in the world, and upstart company BetterCloud, which is battling for market share for software that monitors the status of office applications like email.  In the article, it became apparent that the issue for CA Technologies with regards to being able to be competitive in this cloud office platform, is that “it can try to keep selling its existing product or it can scrap the old product and build a new one that competes with the much lower priced rival” (1).  With this being said, I would like to critique the idea that big corporations cannot compete with smaller startups in the IT industry.

The aspect of this article that I feel is an important issue to address is the thought that more established technology companies have to focus the majority of their efforts to keeping shareholders happy.  Understanding that executives have an obligation to their shareholders, I think that today’s executives need to change old business strategies (sell old products/updates to consumers) and instead try to compete with smaller upstarts by either creating better solutions than these companies (at a reasonable price) or become trailblazers and beat these upstarts to said solutions.  This sentiment is definitely a possibility for larger companies because they have the resources and capital to back such practices, but in the case of CA Technologies, it seems that this company is trying to play catch up with BetterCloud in the cloud market while trying to assert that they serve “more complex IT environments” (1).  The proof that CA Technologies is playing catch up comes from their 10Q, which shows that “Enterprise solutions new product sales decreased by a percentage in the high teens primarily as a result of the timing of our renewal portfolio providing fewer opportunities for new sales and smaller transaction sizes” (1).  While the entirety of these loses cannot be attributed to one competitor, it can be assumed that this decline in sales is in part due to the offerings of BetterCloud, further highlighting the need for large corporations to adopt new business strategies to better compete with smaller upstart companies.

In my opinion, the best example that large companies can follow with regards to competing with smaller startup companies is Apple.  I feel that the model used by Apple was the best for established companies to follow because of the technological innovation that it has undergone in the last few decades, changing the landscape of the computer market, while at the same time creating and revolutionizing the smart phone market.  It is because of this combination of taking on both existing and new markets that I feel that CA Technologies can best compete with BetterCloud, in that they need to find a balance in both their established markets and the cloud office platforms market.     

    

     (1) http://www.forbes.com/sites/petercohan/2015/03/30/can-ca-technologies-adapt-to-change/