CA South Africa A breaks free with EOH

Mergers, Acquisitions and Financial Results

CA Southern Africa has re-entered the technology sector under its new parent, EOH.

The company announced it had entered into a partnership with EOH in late January, sparking fears that CA had decided to disinvest in SA.

Speaking at the launch event held last week, CA SA MD Gary Lawrence explained the company needed the change to grow effectively in South Africa and Southern Africa. He noted it has already started to see results from the handover. “In the past four months, we have grown our skills base by 20% and we have set up a local support centre.”

According to Lawrence, CA in SA needed to change its business model, since it was limited by the internal rules which restricted the number of support centres and skills growth. “In SA, we do business differently. Relationships are all important. That is why we needed to build the support centre locally.”

CA's senior VP, Gilbert Lacroix, says the international arm has been streamlining its business and centralising aspects like support. He adds that CA has been moving from a direct-to-market approach to an indirect approach. “The deal with EOH forms a part of that strategy.”

Lacroix says, over the last three years, CA has gone from little-to-no indirect market activity, to 36% of the business moving in that direction. He adds that if the company could create a similar model in other countries, it would.

CA has made a similar deal in the Middle East. Many international organisations are cutting back on emerging market investment due to the global economic crisis.

Lacroix says the deal with EOH will help the company cut back on operational costs.

While none of the employees have been affected by the deal, several of the smaller local channel partners have been cut from CA's list.

According to Lawrence, the CA business has been physically moved into the EOH office park, which now forms its base of operations. “We have had several hiccups. There were small delays in customer delivery, but our customers do understand.”

EOH CEO Asher Bohbot explains that even though it is now owned by the company, CA will still maintain all the products, services and branding associated with its former parent. He says CA locally will have access to all of its international namesake's internal skills development, technology and best practice offerings.

“It will effectively still be a large part of CA.”

CA SA also released three products yesterday, all focused on managed services. The company's new strategy will focus on service provision, making use of EOH's customer base of 2 500 clients and its data centre space.

EOH would not disclose the financial implications of taking on the local branch of CA, since it is in a closed period. The company's final results for the year should be available next month.