ft.com/techblog

An interesting first from CA. The software maker has just handed over all the R&D and future product development for part of its security portfolio to Indian company HCL. CA keeps control of the brand and handles all the sales and marketing.

It’s one thing for a bank or an industrial concern to outsource its software development, but something else entirely for a software company. CA already has 1,200 developers of its own in India, but this takes things a big step further.

CA executive George Kafkarkou denies that ceding all the development work for his company’s "threat management" products (think anti-virus, firewalls, etc) is a form of outsourcing. HCL and CA will share revenues from this business in the future, he says, so it should be seen as a closer business partnership.

Yet CA still calls the shots. Aside from control of the customer relationships and brand, Mr Kafkarkou says it will still own all the intellectual property created in future by HCL developers - though some details have yet to be completely ironed out, such as how exactly the "partners" arrive at future product roadmaps.

Threat management accounts for just under 5 per cent of CA’s $4bn in annual revenues. But as the first deal of its kind, this could point to a more fundamental shift ahead. If CA has decided it should stick to what it is good at, and that means marketing rather than building its own products, the next logical step is surely to go the whole way and become a "software-lite" software company.

November 13th, 2007 in Software | Permalink