In the mid-to-late 1980s colleagues and friends were surprised when I transitioned from working as an on camera investigative TV reporter to cover the then-fledgling high technology industry for specialized trade magazines.
After all they reasoned, how could I be content covering semiconductors, memory boards, server hardware, software and computer networks after working as a mainstream journalist covering stories such as lurid political and law enforcement corruption scandals ; drug trafficking; prostitution; dumping tainted substances on unsuspecting third world nations and cover-ups by big business when their planes, trains and automobiles malfunctioned? How could I trade in “murder and mayhem” for the staid, sterile world of high technology?
They needn’t have worried.
Admittedly, mastering the technology was a challenge. For the first few weeks every time I did story on PALs and had to spell out the acronym I wrote “Police Athletic League” instead of Programmable Array Logic. And then there was my first work-related trip to Las Vegas to cover the mammoth spectacle that was Comdex circa 1988. In the dark ages before wireless, laptops and decent broadband, it was nearly impossible to file stories from your hotel room because the trunk lines were overwhelmed. A colleague and I were forced to trek down to a bank of pay phones to transmit our news articles at 2:30 a.m. and were mistaken for hookers. The pay was arguably better than a journalist’s salary but we passed. Incidents like this made me feel close to my cops and crimes, murder and mayhem investigative TV roots.
I felt at home covering technology right away. Within a month, I was chronicling tales of high tech companies sending their top executives off to rehab for drug and alcohol addiction; there was a rash of top executives leaving established powerhouses like and taking top engineers and sales executives with them, which in turn precipitated a slew of theft of trade secrets and patent infringement lawsuits. Things really got interesting when Robert Morris, Jr. launched his now infamous Internet Worm; there were myriad other tales of sex scandals, involving corporate executives, board of director fights and coups, price fixing, hostile takeovers, corporate espionage and fiscal chicanery that entailed everything from embezzlement and theft to cooking the books .
Reality TV and the tabloids have nothing on high technology industry hijinks.
Fast forward to what’s making headlines during these “Dog Days” of summer 2010. The ancient Greeks and Romans believed that the dog days of summer (named after the constellation Sirius or Dog Star) lasted from late July to early September and hot weather foreshadowed evil doings. John Brady’s “Clavis Calendarium of 1813 describes it as “an evil time when the seas boiled, wine turned sour, dogs grew mad, and all creatures became languid, causing to man burning fevers, hysterics, and phrensies.” The recent spate of high tech headlines seems to bear that out. Here’s a sampling:
• The Hewlett-Packard board of directors abruptly fired CEO Mark Hurd, after allegations of sexual harassment surfaced.
• Oracle CEO Larry Ellison publicly blasted the HP board for firing Mark Hurd.
• Oracle sued Google for alleged patent and copyright infringement involving the use of Java intellectual property in Google’s mobile Android operating system.
• Google StreetView maps prompts privacy lawsuits and raids in several countries including South Korea
• Google releases version 6 of its Chrome web browser and vows to issue a stable new release every six weeks.
The headlines provide an accurate assessment of both the current state and the direction of the high tech industry. Four words say it all: sex, money, power and posturing. Let’s examine some of the stories in more detail.
The HP board of directors’ decision to fire CEO Mark Hurd after five years of stewardship remains cloaked in mystery. Hurd may or may not have been guilty of fudging expense reports and engaging in conduct not up to HP’s standards with Jodie Fisher, a contract HP “adviser” and sometime actress. In addition to being an adviser, Fisher also received $5,000 to attend HP events acting as a “meet and greet” hostess. Fisher, who retained the services of celebrity lawyer Gloria Allred, may or may not have been a victim of harassment. We don’t know for sure because all of the principals in this tableau are mum. Rumors are rife that the “real reason” the HP’s board may have shown Hurd the door is because: 1) he may have been more involved than was previously thought in the 2006 HP board of directors “pretexting” scandal. At that time, HP board members illegally spied on other board members to learn the source of news leaks and 2) Hurd was exceedingly unpopular with rank and file HP employees.
By all monetary measures, Hurd’s five year stint at HP was a resounding success. And for that, Hurd will walk away with a $40 to $50 million severance package. No one knows how much Fisher received, because Hurd and Fisher settled whatever transpired between them, privately. But it must be a pretty good sum, because Fisher issued a very upbeat and conciliatory statement saying she did not intend for Hurd to lose his job and wishes Hurd, his family and HP all the best. Thankfully, I read this on an empty stomach!
What’s wrong with this picture? Plenty.
The real victims here are HP’s rank and file employees, the American worker and sexual harassment victims – both men and women – who lack the clout to hire a Gloria Allred to rattle her saber for another 15 minutes of fame and a quick, inglorious settlement.
The average Joe and Jane worker have seen their ranks decimated with each new acquisition and round of layoffs. HP currently ranks number 9 on Fortune 500 list. In the past several years it has acquired Compaq, EDS, 3Com and Palm. Those mergers and acquisitions helped HP become the first high tech company to have annual revenues that exceed the $100 billion threshold. HP is also first in another category – albeit an unwelcome one: despite its stellar financial performance, over the last decade HP has cut more jobs (most of them here in the U.S.) than any other high tech firm. The head count stands at approximately 85,000.
So Mark Hurd gets $40 to $50 million and tens of thousands of HP’s American employees get shown the door.
Then there’s Ms. Fisher. I know nothing about the woman. One must presume if Hurd was willing to settle with her that her claim had some merit. However, as soon as I heard she was represented by Allred, I cringed. Allred has turned into a modern day Carrie Nation for the tabloid TV generation. In an age of instant and continual information via the Tabloids and the Web, publicity is the chief currency – the more salacious and lurid, the bigger the settlement. I phoned Allred’s office to inquire how many pro bono and non-celebrity sexual harassment cases she handles. I haven’t heard back yet and I’m not too hopeful.
The Equal Employment Opportunity Commission (EEOC) received 12,696 complaints of sexual harassment in the workplace – 16% of them by men. The EEOC says it recovered $51.5 million in monetary benefits for those nearly 13,000 workers. That’s probably just about what Mark Hurd, Jodie Fisher and Gloria Allred pocketed among the three of them. Nice work if you can get it.
That brings me to another prominent headline of the past couple of weeks: Oracle chief Larry Ellison, in an interview with the New York Times blasted the HP board for firing his longtime friend Mark Hurd. Ellison’s comments have all the credence of a professional athlete convicted of using steroids writing an editorial extolling the virtues of doping. Oracle, which completed its acquisition of Sun Microsystems earlier this year, is gearing up to axe up to one-third to one-half of Sun’s workforce of over 25,000. No one is sure exactly how many Oracle employees will be pink slipped but estimates range from 5,000 to as high as 10,000. Oracle disclosed in a recent government finding that it will take write off $825,000 in restructuring charges.
The question is will Larry Ellison make room for Mark Hurd at Oracle? He might. Hurd has a proven record of cutting costs, cutting people and thus delivering value to shareholders.
The real measure of a company’s success should not be measured by how many jobs it cuts by how many jobs it creates for the American worker.
Oracle also made headlines and flexed its muscles last week with the announcement that it is suing Internet search engine giant Google for allegedly infringing on the Java patents Oracle now owns as part of the Sun acquisition, that are used in Google’s mobile Android operating system. This is all about Oracle making a preemptive strike to try and contain Google in what’s shaping up to be a battle of high tech titans. Google’s Android OS runs on many of the major mobile phone platforms including Motorola and HTC Corp. The implications are enormous. Don’t expect this one will ever get to court. Neither firm wants to spend millions or expend precious corporate resources in a protracted legal battle, which would be detrimental to both sides. Expect them to settle. But we can also expect the acrimony between these two rivals to rise commensurately along with the stakes in the mobile market.
Google meanwhile engaged in some posturing of its own. The company released beta version 6 of its Google Chrome web browser. Google also says it will issue a stable new release of the browser every six weeks. This move is clearly designed as a challenge to Microsoft Internet Explorer, Mozilla Firefox and Apple Safari. While I applaud Google’s initiative and desire to retain its competitive edge, releasing a new version of its browser every six weeks is overkill. No matter how fast Google or any vendor makes its browser, the actual speeds are still determined by the user’s broadband. And frankly, the constant application upgrades to everyday packages like Adobe, WordPress and the various browsers are a nuisance. One can barely log on to an application without being hounded to upgrade to the latest version. It’s a major nuisance.
But these days, companies feel compelled to make an announcement just to keep their names in the headlines at all costs. There’s never a dull moment in the high tech industry, especially during the dog days of summer. I can’t wait to see what fall brings. If you have any ideas, Email me at: ldidio@itic-corp.com.