Computer Associates International Inc. Harvard Case Solution & Analysis

At the end of 2000, Computer Associates (CA) has changed its business model and how it recognized revenue, ostensibly to better serve its stakeholders. The new subscription-based license model offered customers more flexibility. Customers can subscribe to any CA software for any time period, including month-to-month. With revenues recognized over the term of the contract, management hoped that the new approach will help avoid CA absolute last minute, end of quarter push to close the deal. To help investors understand the changes that management decided reported "pro forma" numbers, which translated the complete history of CA, as if the company always uses the subscription license. Skeptics questioned, however, whether the CA leading role in innovative ways to support clients or just trying to hide the lackluster growth performance by converting to a new method of revenue recognition. "Hide
by Amy P. Hutton, Suma Raju Source: Harvard Business School 22 pages. Publication Date: 23 January 2002. Prod. #: +102061- PDF-ENG

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