Apr 23, 2004 (08:04 AM EDT)
Cron To Become Interim CEO At CA

Read the Original Article at InformationWeek

Ken Cron, a former president of CMP Media, has accepted the post of interim CEO at Computer Associates, sources said Friday. The announcement of Cron's appointment could come next week, the sources said.

Cron, who couldn't be reached for comment, has been a director on CA's board since 2002. CA would not comment. CA's board replaced CEO and chairman Sanjay Kumar on Wednesday and reassigned him to the position of chief software architect. Board member Lewis Ranieri, a founder of Hyperion Partners L.P., was named chairman.

At CMP Media, Cron was responsible for all U.S. business, including print magazines such as CRN and InformationWeek plus trade shows and online services. More recently, Cron was CEO of Vivendi Universal Games, a maker of interactive entertainment games, and Uproar Inc.

Cron and CA face some big challenges with customers. Many say they're watching the ongoing federal fraud investigation of CA carefully and will be more guarded in future dealings with the company, according to an InformationWeek online survey of 62 business-technology professionals.

While 54% of survey respondents indicate no changes are likely in their relationship with CA, 25% say they'll be less likely to license new products from the company, and 21% say they'll look for ways to lessen their dependence on CA products. Thirteen percent say existing contracts will be reviewed, and an equal number say renewals are less likely to be approved.

The moves at the top come as CA remains under investigation by the Securities and Exchange Commission and the Department of Justice for irregularities in its accounting practices. Three former CA executives have already pleaded guilty to federal fraud charges, including Ira Zar, the former CFO. Nine other employees were fired this week.

Yet half of those surveyed believe revenue-reporting problems such as those that existed at CA are prevalent throughout the software industry. Only 15% say the problems are not prevalent, and 35% say they are possibly prevalent.

The majority of survey respondents--68%--say they believe Kumar's resignation won't benefit CA. Two-thirds also believe rival IBM will gain the most from Kumar's reassignment, and 33% cite BMC Software as the biggest beneficiary.

Gabriel Zaldivar, network engineer for CA customer Pacific Maritime Association, says the dismissal of Kumar was shocking. "I've noticed an increase in quality and customer relationships," Zaldivar says. "CA has been putting more attention into what customer needs are and has a better approach."

That sentiment--that Kumar's tenure was marked by improved relationships with customers--was echoed by a number of CA customers interviewed by InformationWeek this week. According to the online survey, 31% say they're extremely satisfied with CA's products and services, 49% say they're somewhat satisfied, and 20% say they're not satisfied at all.

James Barry, CIO of OneUnited Bank, doesn't plan to change his approach to CA. "I don't see any reason not to continue to move forward with a CA purchase decision," Barry says. "I do believe they will continue to be a valued provider of technology."