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Companies Rethink Corporate Travel

Light Reading
News Analysis
Light Reading
9/26/2001

The recent terrorist attacks in the United States have changed the way Americans think about security and travel. It’s also affecting some companies’ travel policies.

Riverstone Networks Inc. (Nasdaq: RSTN), a 500 person networking company in Santa Clara, Calif., has cut-out all non-essential travel as a result of the terrorist attacks, says Andrew Feldman, vice president of marketing.

"I think, unless the travel is really important, people are a little concerned and re-evaluating whether or not they need to get on a plane to get business done," he says. "Personally, I believe air travel in the United States is safe, but people have loved ones to think about and sometimes they don’t feel comfortable having them travel."

Instead of flying to meet every customer face-to-face, the company is setting up video conferences and Webinars as an alternative.

Riverstone’s travel this month is down about 15 to 20 percent as a result, he says. But he emphasizes that not all traveling has ceased since the attacks. Just this week, Romulus Pereira, CEO of Riverstone and other members of the team flew to Asia to meet with potential customers.

Riverstone isn’t alone in its cut-backs. Larger networking companies are also following suit. Cisco Systems Inc. (Nasdaq: CSCO) has restricted all non-essential business travel until the end of this month. The company, which lost a member of its marketing team aboard American Airlines Flight 77 when it crashed into the World Trade Center, canceled a press event that was supposed to be held in Boston yesterday. The event has been rescheduled for October 2, with media invited to join in via Web conference.

TrueSAN Networks Inc., a storage area networking company, has actually canceled CEO Tom Isakovich’s keynote address at the Byte and Switch http://www.byteandswitch.com sponsored StorageNet, citing a cutback in traveling due to the recent terrorist attacks. The conference, which was supposed to be held at the Jacob Javits Center in Manhattan in early October has been rescheduled for December 11th through 13th.

Other companies have consciously not made changes to their travel schedules in an attempt to show terrorists through their actions that the U.S. way of doing business will continue. Following the attacks, Sun Microsystems Inc. (Nasdaq: SUNW) had planned to move a press event that was to take place yesterday in New York City to San Francisco.

"With all the hardships and difficulties over the past two weeks it seemed so out of place to do a product demo," said Ed Zander, COO and president at Sun, who was born and raised in New York City. But after hearing Mayor Rudolph Guiliani urge the city and the country to fight back by returning to normal, the company decided to go ahead with the original plan, flying its top executives, including CEO Scott McNealy, cross-country to Manhattan for the event.

Sun actually had offices in the World Trade Center. None of the 340 employees in the office that morning were killed or reported missing, but the company did lose one employee, a passenger aboard one of the four planes that crashed on September 11.

Melissa Abernathy, a spokeswoman for American Express Corporate Services, says that her company has seen these exact same trends across a broad spectrum of industries. In an unofficial poll of about 20 of the firm’s largest customers, she says agents found that companies are reacting in one of three ways to the tragic events. Some, like Sun, are not making any changes to travel policy and are actually going out of their way to encourage travel. Others, like Riverstone and Cisco, are restricting non-essential travel or limiting travel for a set period of time. And still others like TrueSAN seem to be canceling most of their employee travel indefinitely.

"A lot of the travel that’s being cut is intra-company, where video conferencing or business tools can be used to accomplish the same goals with employees," says Abernathy. "The deal-closing trips are still being taken. That’s just the way Americans do business."

The best indicator for how much companies will cut back on traveling is to look at the U.S. airline industry, which earns the bulk of its revenue from business travelers, Abernathy points out. Most US carriers have already cut schedules by 20 percent to offset huge losses experienced during the week of September 11, but they are also figuring in additional losses expected in the near term.

Abernathy says that American Express has already seen calls into the corporate travel office picking up this week. She adds that companies had already started cutting back on travel prior to September 11, and that the terrorist attacks have only exacerbated the situation.

The events of September 11, 2001 are still on the minds of many business travelers.

"I fly all the time for work," said Frederic Thepot, director of business development for Dynarc, who was stranded in San Jose the week of the attacks. "I never used to be worried. It certainly makes you think now, but I still have to travel."

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com and Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com

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rtfm
rtfm
12/4/2012 | 7:48:19 PM
re: Companies Rethink Corporate Travel
There were 4, not 3, tragic plane crashes on the 11th.
jssreenath
jssreenath
12/4/2012 | 7:48:17 PM
re: Companies Rethink Corporate Travel
I think that travel is better now than it has ever been, last week I was flying around the country and it was a breeze, no hassles, no crowds, no waiting in line, it was great, I hope it stays like that.
As for video conferencing; its great for our industry, and I hope it increases, the more demand for bandwidth, the better off we are.
metroshark
metroshark
12/4/2012 | 7:48:17 PM
re: Companies Rethink Corporate Travel
Even after the 4 crashes on September 11, statistically, your chances of dying in a routine traffic accident on the highway is much higher than dying in a plane as a result of terrorist attacks.
rfennis
rfennis
12/4/2012 | 7:48:12 PM
re: Companies Rethink Corporate Travel
I don't think that any airline can assure anyone's
safety. Look at the industry!, cutbacks streamline operations, Oh! and mechanical problems with outdated/neglected mait. schedules, cracked windows, engine fialures, Etc.

With all of the technology we have at our finger tips, maybe companies will get a clue and start
considering cross-functional engineering organizations as a viable solution to their staffing requirements.

If I was the VP of engineering and knew I had a guy who could deliver, I would do whatever it takes, and give this guy what he needs to get the job done. Even with all the lay-offs they still can't find the talent they need so desperately.

There is NO logical explanation as to why Sr. level engineering folks need to be located in the same building.

As long as you have access to the development systems through a secure VPN or net.

Freakin mangement lives in the stone age.
WAKE UP!!! It's the 21st Century, Bone heads!
I can't wait to see my generation move into
the Sr. executive mangement, and blow all the competition into the water with record time to market (6-weeks) and staller performance and execution.

It's all about time to market and delivery.
skeptic
skeptic
12/4/2012 | 7:48:10 PM
re: Companies Rethink Corporate Travel
Freakin mangement lives in the stone age.
WAKE UP!!! It's the 21st Century, Bone heads!
I can't wait to see my generation move into
the Sr. executive mangement, and blow all the competition into the water with record time to market (6-weeks) and staller performance and execution.
=============================

Everyone always thinks its so easy. When you
get there, what your going to find out is that
many people (including your friends) are not
as trustworthy or dependable as they seem when
they are co-workers. And that if you build an
organization of any size, you can't just staff
it with people you know.

Your also going to find out that one of the
major roles of a senior manager is forcing people
to talk to each other. And your going to find
out that its much harder to get that to happen
if you can't force them into face-to-face
meetings. Your also going to find out that
people who work remote can duck phone calls
and email with amazing ease.

What you will also find is that slowly you
will start developing a whole management staff
under you that does nothing but sit on the phone
all day coordinating all the remote staff.

telecommuting works fine if the project is small
enough or the dependencies between portions of
the project are tiny. But the bigger the project,
the worse the integration issues become and the
more that remote development becomes a real
problem.



mrcasual
mrcasual
12/4/2012 | 7:48:09 PM
re: Companies Rethink Corporate Travel
There is NO logical explanation as to why Sr. level engineering folks
need to be located in the same building.

As long as you have access to the development systems through a secure
VPN or net.


Don't get me wrong, video conferencing and VPNs are great, BUT if you have ever tried to use them extensively you will quickly become aware of the shortcomings.

As an example, our three sites, spread across the continent, have video conferencing across our intranet, using dedicated FR (T1). With the state of the technology today we still see frequent drop out in audio and video and the communication is still only half duplex. Latency is also an issue. For the service to be really good we would have to dial the B/W up from a T1 to a T3. Have you priced a fully dedicated T3 lately?

Don't even suggest using the public internet for the video.

We also have very wide deployment of people using VPN for home access and while it is generally good you are at the whim of your DSL provider and the public internet for your performance. Sometimes it's good, sometimes it's unusable.

When (if?) there is unlimited, cheap, low latency, low loss connectivity to everyone's home/office/toaster we might be able to change the whole work paradigm. Until then, video conferencing and VPNs are just tools, like cubes and meeting rooms, that need to be used effectively.

Of course we're all in the business of making the B/W nirvana happen so I should get back to work.
rfennis
rfennis
12/4/2012 | 7:48:08 PM
re: Companies Rethink Corporate Travel
Let me give you prime examples.

1)Caspian Networks.
2)Cronona Networks.
3)Atrica.

Many, Many others.

And how about those Systems Engineers who
are sometimes an extension to the Test or
Integration Engineering teams at corporate.
rfennis
rfennis
12/4/2012 | 7:48:08 PM
re: Companies Rethink Corporate Travel
Hey, Don't get me wrong. I concure with some
of the things you mentioned.

I'm talking about about seasoned Sr. Engineers.
1) Who know what is entailed and have a
track record of doing it, timley execution and delivery.
2) Who are aware of the shortcomings and
work together to overcome those issues.
3)Are self directed, objective oriented who
really don't require upper management's direction.

They know what the #$% thier doing and how to do it.

Got a project ? Let me prove it to you.
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