Swainson Swoops in as CA CEO

After an eight-month search, Computer Associates International Inc. (CA) (NYSE: CA) has finally appointed a new president and CEO.

Former IBM Corp. (NYSE: IBM) exec John Swainson was unveiled today as the companys new president and CEO-elect in the aftermath of an accounting scandal that kept CA in the headlines for all the wrong reasons (see CA's Mea Culpa).

As it attempts to put the last few months behind it, the New York-based firm has already reached a $225 million settlement with the Securities and Exchange Commission (SEC) and the Department of Justice, as well as announcing a major corporate restructuring (see CA Cuts 800 Jobs).

Swainson steps into the shoes vacated by former CEO Sanjay Kumar, who has since been indicted on securities fraud conspiracy and obstruction charges. Kumar resigned from CA earlier this year, prompting an eight-month search for a successor (see CA CEO Resigns, CA Names Temp Chief, and Kumar Leaves CA).

The 50-year-old Swainson joins CA from the slightly more sedate environs of IBM’s software group, where he was vice president of the firm’s worldwide sales force. He is also credited with helping develop and market IBM’s popular WebSphere family of middleware products.CA will now be looking to build on this experience at a time of increasingly fierce competition in the software market. Analyst firm Gartner warns of slow sales in the software space until 2006, so Swainson will need to draw on every one of his 26 years as an IBMer.

But he is not being thrown completely in at the deep end. In a conference call earlier today, CA execs confirmed that interim CEO Kenneth Cron will continue to lead the company during a four-to-six month transition period, with Swainson reporting to him.

On the call, CA chairman Lewis Ranieri explained that the company is also restructuring its board. Two new members will soon be recruited from outside the company, he said, as part of an effort to expand the board from ten to 12 members. Of this number, three will be from outside CA.

But, even though the company is still restructuring, CA execs hinted that more acquisitions could be on the way. Even with the accounting scandal millstone hanging around its neck, CA somehow managed to find time for M&A (see CA Acquires PestPatrol and CA Nets Netegrity for $430M).

This is likely to intensify during the handover period, according to Cron. “If anything it gives us more time,” he says. “I will be able to devote much of my energy to product development and product strategy.”However, he did not reveal who the likely targets are. CA execs were similarly tight-lipped on the future of CA World, the company’s annual customer jamboree. Following the recent upheavals at CA, the company took the decision to pull the plug on next year’s CA World, although Cron promises there will be a number of events for customers, suppliers, and partners in 2005.

Stretching the terminology of the software market maybe a little too far, Cron adds that the company is currently "re-tooling" CA World. “We will find a way to do something bigger, better, and more effective than what used to be called CA World.”

— James Rogers, Site Editor, Next-gen Data Center Forum