The Opportunity Is Everywhere. Annual Report 2014 Drove Significant Progress in Fiscal Year 2014
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The opportunity is everywhere. Annual Report 2014 Drove Significant Progress in Fiscal Year 2014 Innovation Rebalancing Consolidated resources Executed rebalancing plan Focused additional investment Attracted new engineers and on growth areas developers for SaaS/Cloud world Improved innovation capability Talent Sales Execution Strengthened management team Clear strategy Aligned employee base to goals Targeted approach and strategy Execution-driven organization Financial Brand Disciplined and thoughtful execution of transformation New tools and strategies Met all financial guidance Highly focused on demand metrics for the year generation Focused on building customer attention and interest 1 CA Technologies Annual Report 2014 Dear fellow shareholder: Last year I told you I joined CA because I saw a company that knows more about managing and securing applications, infrastructure, data and identities than anyone in the world. Today, when I look back at how we have transformed over the past 12 months, I am even more certain of that assessment. And when I look forward to a world that is increasingly driven by software and applications, I see even greater opportunity for CA to grow and thrive. We are hard at work building our company to seize this opportunity. We are creating new innovation capabilities and adopting new sales models that connect us more directly to a broader customer base. We are showing up in the market differently—more focused and more confident. And we have strong alignment across the employee base. Yes, there is still work to be done, but we have laid the foundations for growth and we will continue to make progress across the company. Disruptive Technologies are Transforming the Economy 1.75B >400M 250M >$100B 1.75B1.75Bsmartphone users>400M>400M of intelligent digital 250MM2M250M connections >$100B>$100Bin cloud spending 1.75Buserssmartphone in 2014 1 >400Musersassistants of intelligent like Siri digital and 250MM2Mthis connections year3 >$100Bin cloudthis spendingyear4 smartphone1 users of intelligent2 digital M2M connections3 in cloud spending4 smartphoneusers in 201 4 1 users ofassistants intelligentGoogle like No digital Siriw and M2M connectionsthis year 3 in cloud thisspending year 4 users in 2014 assistants like Siri2 and this year this year 1 Google Now 3 4 users in 2014 assistants Googlelike Siri No andw 2 this year this year Google Now 2 Sources: 1. eMarketer, “Smartphone Users Worldwide Will Total 1.75 Billion in 2014,” Jan. 16, 2014 2. McKinsey Global Institute, “Disruptive Technologies: Advances That Will Transform Life, Business and the Global Economy,” May 2013 3. GMSA Intelligence, “From Concept to Delivery, The M2M Market Today,” Feb. 17, 2014 4. IDC Press Release, “IDC Predicts 2014 Will Be a Year of Escalation, Consolidation, and Innovation as the Transition to IT’s ‘3rd Platform’ Accelerates,” Doc#prUS24472713, Dec. 3, 2013 How Software Tools Help IT Management Support Planning: 31% 37% 53% frequently use software frequently use software frequently use software tools to share key tools to evaluate tools to execute performance metrics whether IT is achieving scenario planning and with the business key metrics what-if analysis Source: Vanson Bourne, 2013 Performance and Progress FY2014 was a year of significant transformation for CA. Throughout the year, we remained disciplined and thoughtful in our execution, and delivered on our financial commitments to you. We met all of our financial guidance metrics— 1.75B >400M EPS,250M Revenue, Cash—and>100B increased our operational efficiency. smartphone users of intelligent digital M2M connections Being spent in cloud users in 2014 assistants like Siri and this year spending this year Google Now That said, we will not be satisfied until we’re driving sustainable, meaningful growth. That’s why we have continued to reshape our development organization, consolidating approximately 80 percent of our enterprise resources at 10 sites around the world to increase collaboration and innovation. We made some tough decisions to rebalance our workforce toward the skills we need to grow in a SaaS/Cloud world. We also updated our sales strategy to bring it more in line with how a modern software company goes to market. We added 710 new logos in FY2014—up 45 percent from FY2013. More important, our NextGen and SaaS products drove nearly half of those additions. It is critical that we drive higher levels of market awareness of our strengths. During the year, we put in place new strategies and programs to drive demand, create pipeline and arm our sales organization with strong opportunities. We will strengthen our brand and extend our reach to new customers in our key markets of focus. We also strengthened our leadership team with key hires and appointments in critical positions, including new heads of our Enterprise Solutions and 3 CA Technologies Annual Report 2014 There have been 200,735,721 data records lost or stolen worldwide in the first quarter of 2014 alone. Source: Breach Level Index (powered by SafeNet), breachlevelindex.com Technology Group, worldwide sales, channels/partners, marketing, and general managers in two key business units. This underscores our intense focus on having the right skills and capabilities to succeed. Seize the Opportunity Software is now at the heart of every business and industry. It is an essential part of our customers’ business transformation. Software-driven applications are disrupting entire industries, both within the enterprise and across an increasingly complex mobile environment. The result: the emergence of a new application economy, one in which CA is uniquely positioned to help. We have the experience and capabilities to help customers accelerate their development efforts, manage their complex infrastructure and secure their most critical assets. The task before us is to mobilize CA to think and move in ways that will meet these needs. Developing the capability to deliver game-changing innovations We need to become a “growth factory” for game-changing differentiation. In a software-driven world, this means continuously developing our capability to deliver organic innovation, using our individual and collective brain trust to combine innovation with customer insight. CA Technologies Annual Report 2014 4 Driving sales growth and amplifying our brand We need to be known for our ability to solve critical business and IT issues for our customers. Our brand must work harder for us to fuel a sales execution machine that builds pipeline and closes deals. Building a community of talent We need to make CA the best place to work in software, period. We need to make CA a place where our employees are brand advocates, where aspiring to do well together is more important than going it alone, who we are and how we work is a tangible competitive strength. 180M is the number Driving Meaningful Differentiation of downloads As we continue to build CA for growth, we have refined our growth strategy mobile app and R&D investments to focus on those markets where we can drive stores will meaningful differentiation. reach in 2015. Management Cloud Source: Gartner Research, “Forecast Mobile App Stores, Worldwide, 2013 We are leveraging the speed and scale of the cloud to help our customers Update,” Sept. 5, 2013* manage not just IT infrastructure and performance but IT investments in the context of overall business strategy. Demand for these solutions will continue to grow as more and more devices are connected, housing millions of new enterprise and consumer applications. DevOps We have a multi-year head start in this critical area. We understand complexity at scale—something smaller players don’t get. Meanwhile, our customers’ development teams need access to more effective production systems to test code and deliver apps more quickly. Our virtualization, simulation and automation solutions help them achieve these goals while reducing costs and preserving their competitive advantage. * The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice. 5 CA Technologies Annual Report 2014 Security We are helping organizations protect their apps and data while delivering “Organizations a differentiated user experience. Our solutions don’t just protect critical enabled systems and information, they provide seamless and effective identity by DevOps and access management, enabling our customers to expand, deploy new applications and drive both enterprise productivity and customer growth. deploy code 30 times more Across these key focus areas, we continue to make investments in frequently innovative solutions, awareness and sales enablement to be able to than their deliver value to our customers across any environment: cloud, mobile and mainframe. peers.” Source: Puppet Labs, “2013 State Focused to Deliver of DevOps Report,” March 2013 Today, I see a renewed energy in our company, a focus to deliver innovation that matters and enable our customers to succeed in the application economy. The changes we are making are taking hold and we will continue to drive them deeper. I am extremely proud of the way CA employees have shown a passion and commitment to win. How they have demonstrated