CA Offers New Solutions

Computing major CA Technologies (CA - Analyst Report) has recently made some strategic moves, which reiterates the fact that cloud computing and enterprise services are the two main areas of development for the company. CA is leveraging its cloud computing expertise and rolling out innovative solutions to grow its business.

CA has recently integrated its new cloud offering CA AppLogic turnkey platform with International Game Technology’s (IGT) IGT Cloud for delivering advanced casino software and better gaming experience to the end user.

IGT is trying to capitalize on the expertise of CA’s cloud computing platform in order to enhance its operational efficiency, and shift focus from infrastructure, maintenance and operations to innovative product development. 

The cloud computing segment of the company is slowly gaining traction and the new orders in this segment include the Cal Credit Card company, which deployed its "Safe Shopping" system deploying CA Arcot TransFort for Issuers. This software provides 3-D secure authentication and fraud prevention services for card processors and issuers.

This cloud-based solution provides multiple layers of protection and identity verification during a shopping transaction, where the cardholder is not present physically. These solutions are user-friendly and also time-saving and thus attract more companies to implement them.

CA Inc.’s emerging opportunity in the virtualization/cloud computing space is significant and could help accelerate growth over the next 2-3 years. Cloud computing leads to increased service and elevated security requirements for the companies that use them and CA's product portfolio is well positioned to benefit from it.

In the enterprise business segment, CA Cross-Enterprise Application Performance Management (CA CE APM), is witnessing massive customer adoption. The solution   extends mainframe monitoring capabilities and provides richer information about the health and performance of key IT services.

This particular solution helps organizations shift to enhanced IT management and maintenance for delivering quality business services to support organizational goals. This solution also deploys cloud computing to offer better solutions.

CA reported excellent third quarter results with EPS exceeding our earnings estimates. Revenue also improved on a year-over-year basis. However, the product demand was moderate in the quarter, although fiscal 2012 guidance was conservative, in our view.

On the other hand, we are apprehensive about other important players making strategic moves to grab a major chunk of the software & cloud computing space, which includes the likes of International Business Machines (IBM - Analyst Report) and Hewlett-Packard Company (HPQ - Analyst Report). In addition, its high debt balance, reduction in tech spending by government agencies and European exposure may pose some challenges going forward.

The company has a short term Zacks#1 Rank (implying a Strong Buy rating).

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