Asia’s downsizing waves from CA, finally

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Nov 23 2007
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Mention CA (Computer Associates) and the next thing that comes to your mind is the co-founder Charles Wang. He was born in Shanghai, China, and moved to New York when he was eight years old. At the age of 31, Charles Wang started Computer Associates. But those were not what made him famous. What he was well-known for is the way he built the empire of CA. Those in the IT (information technology) field would know that the method Wang (as he’s often addressed) used was quite simple yet fast in building an empire – via takeovers.

Known as a heartless and ferocious person who applied draconian practices, Wang had over 50 (fifty) takeovers under his belt during his time as CEO of Computer Associates. He was notorious for forcing the employees of an acquired company to sign new employment contracts on-the-spot at a company meeting without prior warning – he/she who refused or wished to review the contracts were immediately fired. If you think Donald Trump was cruel during the Apprentice series, wait till you meet this monster.

Charles WangOne of the biggest problems with Wang is he could never get good and loyal employees, at least in certain countries inclusive of Malaysia. If your company somehow had purchased their CA-Unicenter product (can’t remember the version though) you would understand what I meant. While the product could be over-complex, the engineers sent on site for implementation could not deploy it satisfactory either. To make matter worse, the staff turnover was so high that basically you could see new faces (engineers) sent to your office trying to figure out where the previous engineers had left once every two weeks.

In the sub-area of data protection, CA’s ARCserve Backup software competes directly with Veritas Backup software (now known as Symantec after it bought over Veritas). Although CA’s backup software is very much cheaper than the BMW-priced Veritas, CA somehow couldn’t kick Veritas out from the market. Today, Computer Associates has decided to downsize its operations in Asia, including Malaysia, but has spared Singapore for the time being as one of its regional centres.

Indonesian office has been closed while offices in the Philippines and Malaysia would be downsized. Rumors said CA, Inc. (NYSE: CA) offices in Taiwan, Thailand, Hong Kong and China would be the next target of downsizing. Meanwhile with more than 60 employees in Malaysia on the chopping board, you can’t blame the rumor that CA will eventually close down its office in the country. CA’s abruptly measure could be due to its changing business model from direct to partner-centric. The name mentioned to continue representing CA is Patimas Computers Berhad (KLSE: PATIMAS, stock-code 7042).

It’s time for American companies to accept the fact that you can’t simply replicate the direct-to-customer business model in U.S. to Asia’s countries. They need the local partners in order to bring in the sales. So many MNCs had tried and failed. Unless your products are retail-based and require minimum support such as Dell Inc.’s (Nasdaq: DELL, stock) model in selling PCs via internet, you can’t expect businesses to rely solely on the MNC’s support as 24×7 uptime would squeeze the MNC’s bandwidth.

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