CA Technologies (CA) recently extended its partnership with the IT solution and managed services provider Logicalis in the U.S. The two companies extended their agreement to provide customers a more flexible enterprise-class cloud computing platform.
Logicalis has been using solutions from CA for some time now. It already uses several CA products including Nimsoft, a monitoring-as-a-service solution, which Logicalis offers to its managed services customers. The extension of the partnership allows customers to opt for CA’s Automation Suite for Clouds.
CA is gradually tapping the huge opportunity available in the cloud computing space. The emerging opportunity in the virtualization/cloud computing space is significant and could help accelerate CA’s growth over the next 2-3 years.
The year 2012 is more likely to be the turning point for CA, establishing the company as a major beneficiary of virtualization/cloud computing, as the company provides innovative user-friendly solutions attracting more customers.
Businesses are increasingly adopting cloud computing, as the companies have understood the kind of cost advantage it can have using this technology.
The recent change in the sales strategy could have a negative impact on its results however, as the company has moved into a three-tiered sales structure, which is expected to cause some disruption. This may result in a delay securing repeated sales orders from large enterprises and in other growth markets in a timely manner. Moreover, this can also affect the sales from customers.
Apart from launching new products, entering into strategic tie-ups and adopting new business strategies, the company has been reshuffling its management team in order to promote the innovation of new products and solutions. Besides this, the company has adopted certain strategies to drive growth, of which the focus on the SaaS/service provider market is notable.
Other players are also coming up with new products and solutions targeting the software and cloud computing space. The company is pitted against technology stalwarts like IBM Corp. (IBM) and Hewlett-Packard Company (HPQ). Moreover, we believe that tech spending will take some time to pick up and European exposure may continue to pose some challenges over the next few quarters.
Dell shares have a Zacks #3 Rank (short-term Hold rating).
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