CA Technologies’ CTO John Michelsen has confirmed that the company will raise the costs of running legacy software in a bid to facilitate its current drive to get customers off of old releases and on to software-as-a-service (SaaS) platforms.
His comments were made in response to a question from Computerworld UK at CA’s annual customer and partner event in Las Vegas this week, where recently appointed CEO Michael Gregoire announced that he would be transforming CA into an innovative SaaS provider. However, in order to do this he needs to persuade CA’s customer base to upgrade their legacy software to the latest platforms.
“I think it’s one of the biggest problems in all of tech – old releases. When you come from the place that I come from, a pure SaaS company [Taleo], the whole idea of old releases didn’t exist,” said Gregoire.
“We would drop new innovation in three or four times a year to every customer, every customer ran the same stack, and I just think that’s a better way of engineering software solutions. We are making big investments in SaaS and driving all of our systems to a SaaS solution, that’s where a lot of our innovation is going.”
Following these comments, Michelsen told Computerworld UK that a lot of companies should be convinced by CA’s push to upgrade. This is because in the past when CA released a new version of software, it wasn’t backward compatible with previous versions, which is something he admits is the fault of CA. Michelsen believes that a lot of customers will upgrade to the latest releases if CA is willing to make this easy for them, as it is should be simpler to do this than continuing to maintain numerous versions of each product they own.
However, when asked about the companies that are not convinced by CA’s sales force and decide to continue running the old releases, Michelsen admitted that they will be pushed in the direction of upgrading through higher software costs.
“How do we get people to do what we want? We incentivise them, or we create a disincentive for the things we don’t want them to do. We need to borrow a page out of other software companies’ books and make it more and more expensive to run old software, and when this happens, hopefully there will at some point be a law of diminishing returns,” he said.
“That’s not what we are currently doing, but let’s be honest, I think we have to get to a point where we can’t maintain the software appropriately without losing money.”
Michelsen provided an example of a company using one of CA’s automation or monitoring tools. When the company using the tool buys a new version of the hardware to support it, it is likely that the firmware will be different enough to cause problems with CA’s software.
“They don’t want to upgrade, they want us to upgrade that software. You have to raise the cost of continuing that maintenance. At the moment they get it as part of their standard maintenance agreement,” he said.
“But at some point you have to say: I can’t support new equipment with old software, unless you pay me more to do that.”
Michelsen estimated that it would take about two years to get CA to the point where most of its customers are convinced about migrating to new releases, and he said that this conversation will begin with its biggest clients.
“What we will do is go to some of our biggest customers first – we know our 200 customers that represent every skew we have ever sold. You can go to 200 customers that know everything we have ever done,” he said.
“We will take those 200, go through the process with them, and they will be the hardest ones to move because they have the oldest products.”
CA’s CEO Gregoire was slightly more diplomatic in a response to a question put forward by Computerworld UK during an executive panel debate, where he said that the conversation with customers is going to be a difficult one.
“I’m not sure how successful we are going to be. Anytime you do an upgrade or change a platform, it’s usually expensive, risky and it’s difficult. That’s not going to go away and that’s why I think the conversation is going to be awkward and hard,” said Gregoire.
“But I’d rather have that conversation than pretend that it’s okay to be on 10 year old releases of software when there’s this great new transition happening of moving to SaaS.”
He added: “I’m not sure what’s going to happen, but at the end of the day we are not being as strong as a partner as we should be if we don’t have that dialogue – showing them that they are running technology that is going to have limitations.”
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