DOUG ROBINSON - COMPUTER ASSOCIATES INTERNATIONAL INC (CA)
CEO Interview - published 05/11/2000

DOCUMENT # JAX214

As Senior Vice President of Investor Relations, DOUG ROBINSON is
Computer Associates primary liaison with the investment community,
product directions, strategy and financial operations. Mr. Robinson is
also a spokesman to the news media on financial matters. Prior to
assuming responsibility for investor relations in 1995, Mr. Robinson
managed various global financial areas for Computer Associates. These
included general accounting areas such as customer service, billing,
accounts receivable, accounts payable, employee expenses, payroll and
general ledger functions. He also managed the contract administration
area and established the company's first internal audit department. Mr.
Robinson has worked in the software industry since 1983. He served as
Treasurer and later as Chief Financial Officer for Cullinet Software,
Inc., a leading mainframe database provider, joining Computer Associates
with its acquisitions of Cullinet in 1989. Mr. Robinson holds a
Bachelor's degree in Business Administration from Saint Michael's
College and an MBA with a concentration in Finance from Babson College. 

Sector: multimedia software

TWST: Give us a brief overview of Computer Associates International.

Mr. Robinson: CA has really evolved from back in 1976 when we were
founded as a systems management company for the mainframe platform into
a comprehensive provider of total solutions spanning systems and network
management, information management ' all that application development
entails, as well as business applications and services. So in time,
through acquisition, through internal development of software ourselves
and most importantly the integration of all of that together for our
client base, we now have a very comprehensive solution set covering all
of the major product categories of business software and providing
services around that in an independent fashion. We are not a platform
provider; we are what we call platform neutral so we can work with the
IBMs, the Microsofts, the Suns and the HPs and provide a solution set
that spans all of those platforms so our customers have choice, in terms
of what they implement, with the assurance that the CA software will
hold all that together. We're currently including the most recent
Sterling software acquisition at about 20,000 or so employees. We're
represented in over 100 countries. So we are a very large, globally
based supplier of business software.

TWST: What are the most significant trends, developments, and changes
that you anticipate in your marketplace over the next several years?

Mr. Gupta (Sr. VP of E-business Strategy): I think the biggest trend we
see right now that is tremendously driving CA's growth is the whole e-
business marketplace. The use of the Internet by businesses, whether
they are trying to reach consumers, and actually even, much more
importantly, business-to-business commerce is something that we see
driving CA's growth going forward in a tremendous manner. And we
actually have created and offer a comprehensive set of solutions that
range from everything that people need to do e-business, including an e-
business platform to build and deploy the latest e-business
applications, e-business management to manage peoples' e-business
infrastructures, and applications on top of those platforms and
management infrastructure. So we offer a complete solution. Today we
manage the Web infrastructures of practically every brand name company
on the Web that you can think of, including companies like Charles
Schwab who have transformed themselves into an e-business, and companies
like eBay, Yahoo! and others, to Exodus and Travelocity.com and
Quicken.com and Bargainbid.com, and eToys and you name it. So all of
these peoples' Web infrastructures are being managed, being kept
available, and being secured by CA Software. And we just see that this
e-business growth will continue to drive our growth going forward.

TWST: Do they license your software?

Mr. Gupta: Yes, CA's software is licensed for use. And of course, the
licensing is based on the benefit to the customer so it's very often
based on the capacity of the infrastructure. If we're managing an
infrastructure then it is based on the complexity and capacity of the
infrastructure. If it is information management or people are managing
transactions and so on, then it is sometimes based on capacity, other
times based on usage. We're fairly flexible in our approach to
licensing, but they are basically licensed software for use.

TWST: How do you think the company's R&D expenditures will change in the
future?

Mr. Robinson: R&D has always been a big piece of CA and it always will
be. I think that it will grow proportionately with the rest of the
business.

TWST: What are the greatest opportunities for the company down the road,
say, over the next several years?

Mr. Gupta: I think the greatest opportunities for us are in continuing
to ensure the success of companies in e-business. We just launched a
brand new product called Jasmine ii. Jasmine ii is our e-business
platform. We see tremendous growth coming from us providing our clients,
the users of Jasmine ii, successful e-business initiatives. We just
announced a few days ago a brand new exchange in its own category, a B2B
exchange, with a partner called Nissho Iwai. They are a $70-billion-plus
business. They're one of the largest trading companies in Japan. We've
announced an exchange for global business-to-business trade ' for
example, if people want to buy and sell oil, or if people want to buy
and sell automobiles, and so on and so forth. What is amazing about this
particular exchange is that not only are we doing things like matching
buyers and sellers, but really, we're providing what ' we've coined a
term between CA and Nissho Iwai called Trading Lifeline Services.
Trading Lifeline Services basically provides things like logistics help
and trade financing, insurance and customs clearance, and all kinds of
other interesting services, which are currently completely lacking in
B2B exchanges and are essential for large B2B transactions. If you think
about it, if you do normal consumer commerce on the Web, if somebody has
something to sell which has a fixed price, you buy it and then they ship
it to you. Let's say someone in Houston wants to buy one million barrels
of oil that are shipped to them on August, and there is an oil producer
in Saudi Arabia or Venezuela or somewhere who can deliver oil on June
22.  There is a lot of distance between oil in one country halfway
around the planet being delivered to the refinery at the right time with
all of those other transactional aspects that have to take place,
including things like transportation and the company that sells the oil
wants to be paid when they ship it out of their port; and some waste has
to be stored; and somebody has to arrange for the ships; and somebody
has to make sure that the trade regulations and the customs clearing
happens; and then somebody has to make sure that it arrives at the right
time to the refiner; and then the refiner pays the price that is
obviously a bit higher than what the seller got and all that money that
goes in between goes to the Trading Lifeline Services. So we see
tremendous amounts of opportunity in this, and that's just one example
of what we've done.

TWST: What are the major concerns or risks facing the company?

Mr. Robinson: I guess there are a couple of things. One is internal
execution. As we get bigger, we have to keep focused on each of the
product areas that we're in and executing each of those optimally. I
think the other issue for us is that CA's success, in large part, is due
to our unique culture. We run as a very flat, very efficient
organization. We change direction very quickly, and because of that, we
are able to maintain flexibility. And in a high-tech market, things
change quickly, so your ability to adapt and run in a different
direction efficiently is a tremendous competitive advantage we have and
one that just becomes more of a challenge as you get larger. So I think
those are the primary areas that we remain cognizant of, and as we get
bigger, we have to work harder to try to maintain those advantages.

TWST: Is there anything else you can tell us about CA's competitive
advantages? What sets the company apart?

Mr. Gupta: I think there are a few factors that really differentiate us
from everybody else. First is that we have a tremendous breadth of
solutions. When you look at what we offer for e-business to become
successful ' we offer what we call an e-business platform that combines
the best of B2B integration capabilities, B2B application development,
standard-based technologies like EJB and JAVA and XML. We provide all
the technologies needed to build and deploy B2B integrated applications.
Not only that ' we also have the solutions to make sure that those B2B
environments are safe and secure. We are the number one provider of
Internet security products, according to IDC, for the last two years
running. And when it comes to Internet security technologies, we have
everything from firewalls to VPNs (virtual private network
technologies), intrusion deduction to PKI ' you name it ' high end to
low end. We also have the management infrastructure with Unicenter TNG,
which manages, as I said before, the Web infrastructures of some of the
best known names in the Internet space. So we provide the high
availability, performance monitoring, quality of service, disaster
recovery, storage management ' all of the capabilities that make the
operations part run well. So we have a complete spectrum of
infrastructure software, and it's all integrated. No other company on
the planet even claims that they have this. No other company even claims
that they're going to build all of this or are going to offer all of
this. Everybody else has carved out their space ' they're either a
security company or a storage company or an application company or a
database company or an Internet B2B integration company. Nobody else has
taken all of this and integrated it into a set of solutions that our
clients can use, that out of the box offers them value. That's one
strength ' the breadth and the fact that they're integrated. The second
big thing is that we're platform neutral. We don't offer solutions that
run only on Windows NT, or that only can run in UNIX, or that you have
to go to the mainframe. So unlike some other companies that have a
platform bias, we have zero platform bias. We support all the platforms. 
The third part is that we have come out with patented new technology
called Neugents. These Neugents predict, on the business applications
side, business outcomes, things like: What do my margins are going to be
like? What are my future sales look like? What is it my customers are
looking for? What type of customers are going to buy what? They can be
used for things like business prediction as well as dynamic
personalization. Those are the two main benefits of Neugents on the
business side. On the infrastructure technology side, they can predict
and prevent system outages because they can predict when a system is
going to go down or if a network is going to have a bad performance.
Therefore, people can prevent them. So the Neugents technology, which
permeates across our entire solution set, is a tremendous strength. So
those are the three main strengths that we have today. And we have just
announced that built on top of this wonderful infrastructure that is
unique in the marketplace and Neugents abilities, we're now coming out
with what we call e-marketplace applications. These are applications for
procurement, the marketplace, as I mentioned earlier, the joint venture
with Nissho Iwai on trading services and Trading Service Lifeline, etc.
These are all applications that will enable people to do B2B or B2C
commerce without having to build these on their own. So we basically are
the only one-stop shop, if people want that entirely integrated
solution. Of course, because CA's solutions are standard-based, they can
use other people's products if they like or if they have an investment
in them. We're the only one today that brings together everything,
including stuff that they might have from before.  One of the strengths
of our unique solution is that it is open and it can integrate and work
with other people's solutions so that we don't ask our customers to
replace what they've got. We say, build on what you've got.  So if
somebody has an application system that is keeping track of inventory,
they don't have to replace that. They can implement Jasmine ii to
integrate that inventory information into the rest of their environment,
have Unicenter TNG to then manage all of this, have e-Trust (which is
our security brand) to secure all of this, and our Jasmine ii
applications to go out and build on top of it. It is absolutely the only
solution today in the marketplace that does all of this.

Mr. Robinson: I'd add to that with Jasmine ii ' CA is the only leading
database vendor with the expertise in that field and the willingness to
be open so that we could work with Jasmine in a cooperative fashion, and
work with Oracle, with IBM's DB2, with Microsoft's SQL Server, with
Informix Sybase, or any other kinds of data format in open fashion and
really leverage that. Our strategy isn't to make clients replace their
existing systems and put them into our types of data format within our
types of products, so we are truly open.

TWST: Are there any opportunities for improvement within CA at this
point? Any weaknesses to be addressed, or  any challenges to be met?

Mr. Robinson: I think one of the things that we're focused on now is
doing a better job of getting the story out to the marketplace. We
address things fairly pragmatically at CA. We've been working over the
last five years with customers on e-commerce initiatives. We have a lot
of product tailored to the Web environment today. But we remain kind of
an Internet company secret out there. So I think as we get bigger and as
we have more business types of solutions, such as the Neugents, and not
just more of the IT-specific solutions, it's necessary for CA to do more
in terms of image marketing to let the world know that we can provide
these types of solutions in a broad scale fashion.

TWST: What are the specific goals for the company over the next several
years in terms market position and growth?

Mr. Robinson: I think two-fold. One is, we have a very significant
leading market share on the systems and network side of the business,
and that's an important area for CA and certainly our goal would be to
maintain and increase the lead that we have on the systems and network
management side. Another area of our business is what we call
information management and the Jasmine ii product. That's a much smaller
portion of CA today. Over the next couple of years, we expect to expand
that significantly. In addition, looking at the distribution side of the
company, we are very focused on expanding the channel. Our direct sales
will continue to grow, but we feel that we can leverage our solutions
out to the marketplace in a much more efficient manner by having an
expanded channel relationship, so we continually work to grow out the
channel. And then services is the other component that we're looking to
expand. Clients in this complex technology world today are looking at CA
as much more of a technology partner and less as a software provider. We
need to provide the resources to them in terms of professional services
that complement the technology offerred to really help our clients go
into tomorrow's Internet world, be able to create applications, take
advantage of B2B-types of productivity, and really provide the total
solution to them, whatever their specific business requirement may be.

TWST: How do you feel about your current stock price?

Mr. Robinson: Not well, and based on the market action on April 14,
feeling even worse. It's very frustrating for us. We feel that the
business performance has been very good, but the stock price seems to be
a bit disconnected from the business, currently. We never seem to get
the ride up with the Internet stocks. I think part of that is because of
the marketing that I spoke about earlier. We aren't envisioned yet in
the marketplace as the Internet infrastructure play that we really are.
But in the same token, when the tech stocks correct, we seem to be right
in the basket with them all and come down with them. So it seems a
little bit unfair to us.  But we're going to focus on the business,
we're going to focus on taking advantage of the opportunities out there.
Irrespective of today's stock price, we recognize that the world is
going toward e-commerce. There is a lot of additional productivity to be
gained by tying the systems together, by building new applications to
make things more efficient in transacting business like the marketplace
exchange. Technology is increasingly becoming an important part of
driving business, not just supporting business. And systems increasingly
are becoming more and more mission critical, so performance,
availability, security, all the areas that CA addresses, are becoming
increasingly important in tomorrow's world.  So we think it's a matter
of timing. We think we're very well-positioned if we can just keep
going, keep executing, and at the same time, make the market a little
bit more aware of what we're doing. Hopefully, the stock price will come
in time.

TWST: Can you give us two or three additional reasons why potential
long-term investors should invest in CA today?

Mr. Robinson: CA is a large cap, diversified, liquid (from an investment
standpoint) holding. CA has a track record from 1976 of evolving as the
marketplace evolves. There are very few software companies, if any, that
have really evolved the way CA has ' that has changed its product line,
expanded its product line, had the vision of where the marketplace was
going, and then the execution skills to get there in time. So I think
investors can see a track record with CA that we can go to that next
level, that when the next challenge comes up in the marketplace that we
will be positioned to be able to address it and use it as an
opportunity. CA also has always operated with a great deal of
operational efficiency. Our cost control, operating margins, cash flow,
and our profitability have always been very strong. So we've been able
to execute on this vision in an efficient manner and run a very
profitable operation.  I think the financial strength, the technological
vision, and the management execution skills are all the key attributes
of investment in CA.

Mr. Gupta: And just to add a little bit to that on the technology side,
I really can't emphasize enough the fact that today, if somebody was to
look at any technology company out there making software, they would not
find anybody else with the kind of breadth and depth that we have in our
offerings for the e-business marketplace, which is where the growth is.
You look at Forester Research and they talk about trillions of dollars
being transacted on the Web. Well, that's great, but you need some
software to make that happen.  The pace of movement on the Internet is
very, very fast. You can't go out and buy 20 different pieces from 20
different companies and try to pull them all together. Businesses just
don't have the time to do that. The only thing they can do is go to
somebody who they can ask, 'Can you solve my entire problem?' CA, today,
is the only one who can truly solve the entire problem. No one else even
claims that they will solve the entire problem. So to us, that's such a
differentiator. And I think that as time goes on, that should get
reflected in the way the market values us.

TWST: Thank you.

DOUG ROBINSON
 Sr. Vice President, Investor Relations
YOGESH GUPTA
 Sr. Vice President of E-business Strategy
 Computer Associates International
 One Computer Associates Plaza
 Islandia, NY 11788
 (631) 342-5224
 (631) 342-5329 - FAX

Each Executive who is the featured subject of a TWST Interview is
offered the opportunity to include an Investors Brief or other highlight
material to be provided and sponsored by and for the company. This
Interview with Doug Robinson, Sr. VP, Investor Relations and Yogesh
Gupta, Sr. VP, E-business Strategy, Computer Associates International is
accompanied by an Investors Brief containing corporate information.

Copyright 2000 The Wall Street Transcript Corporation
All Rights Reserved


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