Charles Wang: Industry Leader

The history of the software industry might never interest Ken Burns, the great documentarian. But if it ever does, he should definitely spend some time with Charles B. Wang, the founder and chairman of Computer Associates International Inc. (CA). Charles, as he has always been known, is one of the software industry's great leaders. The man who announced this August he is stepping down as CEO of the company he cofounded in 1976, wrote the book on growing a software company by acquisition. He has never attained recognition at the level of Bill Gates, but like Gates, he built a software company that has been unassailable in its industry leadership position.

CA's stock reached a 52-week high of 79 7/16 last January and a 52-week low of 23 11/16 on August 4. That drop wiped out almost $33 billion in market value. Shares have fallen 47% since the company gave its reduced Q1 estimate. The management move most likely resulted from an effort to boost the company's stock price.

Charles issued a statement: "This realignment marks the logical transition from the founder phase of CA to the next level of corporate activity, which is more focused on enhancing shareholder value and is a broader implementation of our vision." To me, Charles took the company way beyond the founder phase. Many, many software company founders have come and gone since 1976, most from companies that never matched CA's size and earnings—more than $6 billion in revenue for the fiscal year ending March 31.

Charles, 56, had an original management style. He has created one of the most culturally diverse companies in the industry. He stayed very much at the center of things. The company may change without him. He was never in the operating systems business, so he never had to face Bill Gates' brand of trouble with the Justice Department. But in certain areas of software, CA has little competition. Now CA wants to be an e-business company, a smart strategy in an era when virtually all companies need to be in e-business, and computer software is what they need to get there.

Charles had a clue about the issues facing IT management. Over the years, CA has made far fewer changes in overall strategy and in acronym usage than has Microsoft. The CA strategy has been easier to digest and less time-consuming to follow. That has advantages. Still, the company has grown so big, and absorbed so many other companies and strategies; maybe it has become difficult to understand from a strategic perspective. The refocused CA promises to simplify the market's understanding of its strategies and financial performance, newly-appointed CEO Sanjay Kumar, 38, explained to analysts.

A slowdown in the S/390 market contributed to Computer Associates' lower than expected first quarter profit. It's ironic. The business that allowed Charles to build CA up to $6 billion in the end took him down as CEO.

Regards,

John P. Desmond

jdesmond@softwaremag.com