Open Source Cloud Authors: Liz McMillan, Elizabeth White, Flint Brenton, Jason Bloomberg, Yeshim Deniz

Related Topics: Open Source Cloud, Industrial IoT, Microservices Expo, Linux Containers

Open Source Cloud: Article

CA's Misstated Revenues Now Top $2 Billion; Sales Chief Canned

CA's Misstated Revenues Now Top $2 Billion; Sales Chief Canned

Computer Associates has sacked the head of its worldwide sales operation, EVP Stephen Richards, the latest executive claimed by the investigation of the revenue-inflating scandal that has gripped the company for several years now and stripped CEO and chairman Sanjay Kumar of his titles last week.

CA said Richards, believed to be the nameless "Executive 2" that the SEC identified in the indictment for conspiracy to commit securities fraud and conspiracy to obstruct justice brought against CA's former VP of finance David Kaplan, resigned.

The scandal has so far cost at least 16 senior managers their jobs, their reputations and possibly their freedom including the company's former CFO and general counsel. Many of them were reportedly asked to resign.

CA's audit committee, which has so far spent $30 million doing its own investigation, now says that it has found that a total of $2.2 billion was prematurely booked in fiscal 2000 and 2001.

Previously the company only owned up to illegally recognizing $1 billion and said the shenanigans were limited to fiscal 2000.

It now says $1.782 billion were falsely recorded in fiscal 2000 and another $445 million in fiscal 2001.

It is still unclear how far back in time CA's books are compromised.

Statements made in court by CA's ousted senior VP of finance Lloyd Silverstein, who is now cooperating with the authorities, suggested that CA's practice of holding the quarter open - its so-called 35- months - and booking unsigned contracts dates back to at least 1998.

After moving revenues out of some quarters and into others, the company is restating fiscal 2000 and 2001 and says revenues for '00 have been cut by $2 million to $6.092 billion but that net income and earnings were unaffected. Stockholder equity was reduced by $333 million.

Revenues for fiscal '01 increased by $558 million to $4.748 billion and the net loss dropped by $333 million to $258 million, with a corresponding decrease in the loss per share to 44 cents from $1.02.

CA this morning officially introduced Ken Cron, an independent board member, as its interim CEO to replace its ousted chief executive, now reduced to chief software architect, but understood to be the power behind the throne.

In his new job, Sanjay is supposed to "architect a new vision for the future."

The company is holding its breath waiting to see whether the government will charge Kumar with complicity, while it tries to negotiate a settlement with both the SEC and the Justice Department. It is unclear whether CA can stay out of court.

In a conference call this morning, Cron denied that he was interested in the CEO job long-term. The company is supposed to be organizing a search for a permanent replacement, but doesn't seem to have picked any headhunters yet. Kumar is believed to have hopes of reinstatement.

The CA board also named Jeff Clarke COO. Clarke is the HP refugee who joined the company a few weeks ago as CFO, replacing CA's indicted chief financial officer Ira Zar.

Clarke had been Compaq's CFO and was responsible for the Compaq side of the HP-Compaq integration team. Sanjay hired him.

The company said that R&D, technology services, legal and communications report to Cron and that sales, partnerships, business development, marketing, finance and HR report to Clarke. Clarke reports to Kron.

Mortgage maven Lewis Ranieri, also an independent director, has replaced Sanjay as chairman. He indicated CA intends to keep the roles of chairman and CEO separate.

Ranieri did not address the question of whether Clarke was in the running for CEO. Clarke will be replaced as CFO. Meantime, he will hold both jobs and said he intends to institute further reforms including reorganizing the finance department and instituting company-wide accountability and checks and balances.

Doug Robinson, who was interim CFO after Zar was canned in October, has been named controller, a new post at the company.

Clarke is also looking for a chief accounting officer who would ensure CA's integrity and policy adherence.

Meanwhile, Richards has been replaced by CA's senior VP for North American sales Greg Corgan. Corgan is clean. He didn't join the company until last year after CA had supposedly stopped the booking irregularities that got it into so much trouble and began reforming itself. He's supposed to be responsible for maintaining customer relations.

Corgan was with IBM for 24 years, including stints as general manager of IBM Software responsible for sales, marketing and technical support and senior VP of IBM's worldwide ERP solutions.

More recently, Corgan was senior VP of worldwide operations for the Terraspring infrastructure automation start-up that Sun bought, and president and CEO of OneChem Inc, a web application and connectivity services house.

Cron, whose forte is sales, said there would be no structural changes in the sales force and that it would stay divided between direct and indirect.

Ranieri claimed that despite the distracting upheaval of departures and arrivals there is "no sense of crisis" inside the company.

In mid-day trading CA stock was up 2.5% to over $29.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (5) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.

Most Recent Comments
NotSure 04/26/04 05:40:43 PM EDT

what he got, but here's why he got it!! (SEC Complaint filing vs Silverstein). Compelling reading for the curious!

Quezztion 04/26/04 05:38:18 PM EDT

I remember Silverstein in Jan faced up to five years in jail and a $250,000 fine. Anyone know what he got?

SadButTrue 04/26/04 05:37:19 PM EDT

Ever since the CA executive, Lloyd Silverstein, admitted in January lying to prosecutors and lawyers from the Securities and Exchange Commission in September 2002 about whether the company had booked revenue from unsigned contracts, I've lolst any faith in this company.

Silverstein said he lied after several executives senior to him told him to do so. He didn't identify the executives, but only a few people in Computer Associates' sales and finance divisions were senior to Mr. Silverstein, including Ira Zar, the former chief financial officer.

I shall never forget how, in an unusual statement issued after the hearing, the prosecutors said that they thought that Silverstein's plea would be only "the first step in uncovering a corrupt conspiracy at Computer Associates."

How right they were. After all only a few people in CA's sales and finance divisions were senior to Mr. Silverstein, including Ira Zar, the former CFO.

We now know he was guilty.

rht67 04/26/04 04:45:01 PM EDT

according to this, CA customers were already expressing reservations about dealing with a vendor with damaged credibility yesterday. Who could blame them?

Dismayed87 04/26/04 04:40:54 PM EDT

When Ira H. Zar, the company's former chief financial officer, pleaded guilty to fraud and obstruction charges, I thiought things were bad enough...but this just gets worse and worse

@ThingsExpo Stories
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, shared examples from a wide range of industries – including en...
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
Rodrigo Coutinho is part of OutSystems' founders' team and currently the Head of Product Design. He provides a cross-functional role where he supports Product Management in defining the positioning and direction of the Agile Platform, while at the same time promoting model-based development and new techniques to deliver applications in the cloud.
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.