The article says he paid 67.5 million in fines to settle a securities fraud lawsuit brought by the SEC. It was a civil lawsuit, so the penalty if he lost (instead of settled) would have been a fine.
The criminal case was dropped because a grand jury would not indict after 2 years debating the issue.
The settlement has nothing to do with the criminal case.
And in the other case of the "low-level countrywide loan officer".. the level of fraud detailed in your link goes far and beyond the fraud occurring in the mortgage industry at the time. He had countrywide issue 38million in fraudulent loans, of which 8.7million went into his own bank account.
No need to generalize based on your work experience. There are good AND bad managers.
The fact that IT gets cut does not mean the manager is bad. You work in IT, so I'm sorry I have to break this to you, but sometimes the universe does not revolve around IT. Sometimes there are more important divisions, and sometimes IT expenses have to be cut.
There's not enough detail in the article to know if the manager was good or bad.
Things were running well. The executive thought that IT was bloated and made cuts. Things were no longer running well. Far more money was lost in the company's dysfunction than saved by the cuts.
Sounds like a bad executive to me.
I never implied that there aren't good managers and executives, but only that most of them aren't, because most of them get caught up in "boredom trading" that doesn't solve problems, but is just managerial action for action's sake.
First, he said the savings almost certainly less than the cost of the waste. This sounds like a guess. He gives no numbers, and doesn't appear to have quantified anything.
Second, maybe IT was running so smoothly previously because it was bloated, and was a huge drain on company resources. Maybe it was running smoothly because a bad manager refused to put a limit on anything, leading to a division whos costs were completely out of control.
We have no idea, because there are no details in the article about the company, or about the IT spending before OR after the cuts.
"Of course, it all went to shit. New employees would go a week before they had machines, phones, passwords, and ACLs. Printers ran out of paper, projectors ran out of lightbulbs, servers ran out of storage, networks got misconfigured, and so forth. The total time lost and wasted across the whole company was most certainly greater than the savings of laying off the expensive and skilled IT staff."
The guy might be a bit biased but it's completely clear from his article that even though he might not have exact numbers the company was much better off(not only in terms of total profit) with the old IT department.
The OP does have details to back it up, just not hard numbers. He states how new employees had problems getting setup, old employees dealing with misc problems, things not running smoothly in general. Yes most companies consist of more than IT but these days the problem is many organizations seem to look at IT as an extra expense they can skimp on or even completely do without("The bosses son is really good with computer's he can fix any problems that arise!"). Theres two sides to every story and maybe this department was bloated and could've used some restructuring we don't know that part for sure but we do know that things went from everyone being able to work efficiently to all sorts of random issues, suffered by general employees not IT that should've been avoided.
You're taking this awfully personally, I'll ask again do you do in some sort of managerial position? Do you have some personal experience with this sort of thing?
The employees were expensive software developers, electrical engineers, RF signal electrical engineers, and microelectronics design engineers. There probably was one person making minwage. She was a very sweet developmentally disabled girl who delivered the mail to our desks.
Similarly, we don't know the names of any of those executives. That means we don't know if we currently work for them. If we work for other executives, we shouldn't assume that we can generalize this story to our experience!
In fact, since the odds of this exact management team starting a new company in exactly the same industry with exactly the same business model are close to zero, I think we can agree that it would be impossible to learn anything from this story even if we DID know all the details.
Which leaves the question, was the cut in IT a cause or a symptom? It could have been the last in a long line of bad decisions; I can't see this bringing down a company all by itself.
I'm the OP. After few years of bad IT hell, the rest of the company was almost completely dead in the water, in part because of the bad IT drag, and in part because of other management decisions that had bad outcomes. I then left when it was gutted with layoffs. A few years after that, it was sold for pennies on the dollar prices to a low-quality technology aggregration company.
I think you're trying to argue (in multiple responses) that the evidence in the article doesn't rule out all other hypotheses, so we shouldn't take it as proof.
Sure.
It's not a formal proof. It's a narrative of a general pattern that we might want to learn from. If we can learn from narratives that are completely false - raganwald's excellent posts come to mind - then surely we can learn from narratives that are not scientifically rigorous.
There is a difference in meaning between most certainly (what was actually written) and almost certainly (your misquotation, and apparently your reading).
> That sounds bad. But we have no idea what the company does, so we don't actually know if this is a problem or not.
That's true. The description of the company does lend itself to the belief that it was sufficiently large enough to make these things a problem. If you have people working in cubicles there is, more than likely, a need for them to have a computer, phone, etc. While it might be possible for them to not those tools, I would expect a different style of working environment if office work were not a significant component of their job.
> We have no idea how much the inefficiency costs or how much was saved by the cuts. So we have no idea if this was a bad OR good thing for the company.
From the sounds of things, they didn't have a problem with inefficiency prior to the cuts. It sounds very much like they had just the right number of just the right people on hand to keep things running smoothly. At that point, it's like you have an engine and decide, I really don't need all this oil, let's get rid of some of it. You might be spend less on the oil but then you have to deal with the increased wear on the rest of your engine or risk having it seize up completely.
Yeah, we don't know the real size of the company or what the company did but, the kinds of things he's describing will lead to a degradation of overall morale and you'll find that "broken window syndrome" starts taking over. You'll find that the IT people hate everyone and that everyone start's hating IT which makes the whole situation worse.
So the question is, do you save a little money now to find you have a massive expense in lingering in the future?
From the sounds of things, they didn't have a problem with inefficiency prior to the cuts.
He includes no details about the IT staffing levels in the company, what the budget was, the size of the company, what the company did, what the employees did, the reason for the cuts (other than speculation), or anything else.
For all we know, it was a company with 5 non-IT employees, and a staff of 50 IT people who flipped a coin once a day to decide which of 1 of them was going to work that day.
Prove me wrong. How many people were in the IT dept? What was their budget? What did the company do?
You have no idea.. because there are no details in the article. So you do not have enough information to say if there was an efficiency problem.
8 to 400 just keeping a system going (assumed MS from the vocabulary in the original article) sounds like a reasonable metric to me assuming no big business application development. 3 to 400 sounds very small, especially if there needs to be a Windows roll out (e.g. xp -> 7).
Disclaimer: I'm an observant end user who has worked in organisations ranging from 70 to 1200 staff total, and who has seen huge differences in basic it function. As others have pointed out, the cost of the less efficient IT support is 'hidden' in other budgets and in people 'just getting on with it'. I've seen newly appointed people share logins with established people just to be able to do anything which is an obvious security problem. My current employers have noticeably good IT support, but need to make savings, so I am worried.
> For all we know, it was a company with 5 non-IT employees, and a staff of 50 IT people who flipped a coin once a day to decide which of 1 of them was going to work that day.
You're right on that, we don't have any idea about the total size of the department or the total size of the company as a whole. So, I'll grant you that there might have been some room for cuts in the department but, that really doesn't matter for his point.
What we see is that prior to the reorganization everything worked and that after the reorganization it didn't. This looks like someone pruned way too much out of an area that they didn't fully understand. The only thing we have to work from the assertion that:
"The total time lost and wasted across the whole company was most certainly greater than the savings of laying off the expensive and skilled IT staff."
I am making what I would consider educated guess on the scale of the organization and the impact of the changes. That impact would indicate that they now have insufficient staffing in IT and inefficiencies elsewhere as a result.
The OP posted and they appear to have been correct, while your "for all we know" turned out to be almost exactly backwards.
People match stories against their own experience. Any half-decent sysadmin probably has a story or two like this one. So yes, we do have something with which to assess the credibility of the story.
It would appear that you do not share that experience, though.
There is a strain of thinking evident in the article, and one I think is pervasive in corporate America today, which is that measurable savings are highlighted while difficult to quantify lost benefits are deemphasized.
When you can't precisely measure how much is lost by doing something half-assed, it's probably worthwhile to do it right.
The only challenge to setting up the ultimate competitor to Sage/Quickbooks is that it's so mind numbingly dull.
Yes, the dullness of the topic is why no one has bothered to enter the market and compete with the $3 billion Intuit, or the $1.5 billion Sage. It's just too boring for them to bother with that kind of money.
You're fing kidding right?
Do you think that maybe, just maybe, the 17,000 pages in GAAP have something to do with it? Or maybe the 3000+ counties.. or the long list of county/city/state/federal rules and regulations? and not just accounting rules, but employment taxes, credit card processing, invoice generation, etc, etc, etc.
I think you don't understand the complexity of the topic and don't know the full feature-set of sage/quickbooks, and that's why you think it's simple software.
I think he understands it rather well - it's "complex simple software".
You can think of any software as consisting of a set of problems of varying degree of "difficulty". Sort them in ascending order and plot them. This graph will give a very tell-tale signature as to what you're facing.
B2B / enterprise / call it what you will software has an infinite number of individually easy but collectively mind-numbingly painful problems. Yes, a lot of that bs comes from laws/rules created by "others".
"Interesting" software has a small-ish number of very difficult problems and then a manageable number of easy ones. These are the type of problems where you can take a small team of very smart people and really knock it out of the park. They are most unfortunately very few and far between.
Social cat photo software I can't speak to. I'm certainly not implying that it's in the "interesting" bucket...
Most people are thinking too narrowly of B2B, and while it may be true that business logic and accounting are dominating in number of installations / volume of sales / whatever, some very unsexy businesses (road toll collection, what could be worse!) do want most sexy science and technology. Significant fraction of computer vision studies is dedicated to vehicle recognition and classification.
No, he definitely doesn't understand what quickbooks is. He says 10million loc is an indication it has gone "horribly wrong". That tells me he doesn't have the vaguest idea what the feature set of quickbooks is.
I've been programming for 15 years, and have personally used sage for 7 years. 10m loc is definitely within reason for the number of features the app has.
If he doesn't understand WHAT the software IS. Then how can he sit there and say what the level of difficulty is.
He DOES NOT KNOW. because HE DOES NOT KNOW what quickbooks is.
I have to disagree. Law is complex largely because politicians need to feel like they are doing something. They make changes so they can claim in their next campaign that they've improved things. They make changes to benefit their likely donors/voters. The cruft keeps piling up and it rarely gets wiped away.
Consider tax-advantaged retirement savings. Why do we have: traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, 401k, Roth 401k, and 403b, all with different requirements and different benefits? The need to have a reasonable amount of savings when you retire is universal, so why this complicated mess? Why are two people doing the same job at two different companies able to save dramatically different amounts based on whether or not their employer chooses to offer a 401k? Why force every taxpayer to do a 10-line (or whatever it is) calculation to determine eligibility to for an IRA just so we can prohibit a few rich people from having a benefit (hint: it would be a lot easier for everyone to make it universally available and just bump the rich people's tax bracket by a hair if you really feel the need to wipe out the pittance in tax savings that they would obtain). This isn't necessary complexity, it is pointless stupidity that we all suffer for (except for the accountants that gain employment from it).
Sure, that's one source of complexity in legislation.
But really, seriously, the world is complex. Every day people stumble on combinations of circumstances that have never occurred before in human history. Some fraction of those people get into an argument about what happens next. Some fraction of those go to a judge and ask her what the answer is.
The judge takes the existing principles, cogitates a bit, then extends the case law to cover the new scenario based on analogy with older scenarios.
This creates a new piece of law. It's never been seen before. But it might turn out to have profound consequences.
Before switching to computer science, I studied law. It's complicated because people are complicated.
I think ther are some sexy B2B problems, ie problems that can solved with technology rather than business solutions that use a tiny bit of software.
Analytics is pretty huge. Companies will pay big dollars for profitable insights into their data, queue distributed computing and machine learning. In machine learning and AI there are a massive number tasks being done by unskilled temps that could be automated away, for example data entry, basic research, report interpretation (back to analytics).
Then there's whole field of taking almost any piece of enterprise software and just giving it a decent/usable user experience, using sexy Web tech, html5, etc.
I think the only thing unsexy about b2b is that you'll never be famous in your friends eyes, ie you'll be the guy who made their accounting software 30% less frustrating rather than the guy who created the latest local cat photo montage social network
Sierra Nevada and SpaceX have almost the same number of employees. So not sure why you think they're bloated and SpaceX isn't.
Personally I'm happy NASA spread the money around. The last thing we need is the government to simply build another Boeing or Lockheed. And by that I mean: if SpaceX has 100% of the market because of NASAs funding, I fully expect them to stop competing on price (at some point).
>He said: I searched for a domain, and 3 days later someone else registered it.
No, he said he searched for a domain, and when he went to register it 3 days later, it was already taken. That is consistent with the hypothesis that GoDaddy is tasting, since 3 days would be within the 5 day grace period.
He is not claiming that godaddy is doing what netsol did. He's saying, I checked on a domain, and 3 days later someone else registered it through Godaddy.
He doesn't have a claim to every name he searches for.
He checked on a domain name, it wasn't registered. He waited 3 days, and someone else registered it through Godaddy (most popular registrar.. so he's not the only person who uses it). Godaddy offered to help make an offer to the person who purchased it.
He doesn't say Godaddy OWNS it.. someone else registered the domain through Godaddy. BFD.
What is the complaint?
I'm not a fan of Godaddy (I'm moving all my domains to name.com).. but he doesn't have a complaint here.
If you liked the domain you should have bought it.
I understand that i should have bought it at the time (see the preface to my post - "Although this is untimately my fault") I have trouble believing that the domain was purchased by another individual because of it's obscurity, and that is the reason I'm kinda annoyed I can't have it.
For whatever reason that I happened to lose this domain, the lesson is obviously now learned... Next time I will most definitely snap it up when the opportunity presents itself.
Sure.. it is legitimate. But Dalton has the right to say as loudly as he can what Facebook's negotiation tactics are. And other developers have the right to stop developing on the Facebook platform because of it.
It may be legitimate, but that doesn't mean there aren't consequences.
How many developers would continue using Facebook's platform if they knew Facebook would kill their product on a whim?
> How many developers would continue using Facebook's platform if they knew Facebook would kill their product on a whim?
Those exact words have been uttered about both Microsoft and Apple in the past. Both have been wildly successful. At the end of the day developers will follow where the money is and absorb the risk.
The article says he paid 67.5 million in fines to settle a securities fraud lawsuit brought by the SEC. It was a civil lawsuit, so the penalty if he lost (instead of settled) would have been a fine.
The criminal case was dropped because a grand jury would not indict after 2 years debating the issue.
The settlement has nothing to do with the criminal case.
And in the other case of the "low-level countrywide loan officer".. the level of fraud detailed in your link goes far and beyond the fraud occurring in the mortgage industry at the time. He had countrywide issue 38million in fraudulent loans, of which 8.7million went into his own bank account.