Of Greed & Grubbiness
LAS VEGAS – Networld+Interop – So I guess Jack Grubman gets to keep his house in the Hamptons?
Over four years, Salomon Smith Barney telecom analyst Grubman made well over $70 million in salary and bonuses (probably more, but the calculations were too painful) and then landed a reported $32 million severance package (see Jack Grubman Goes).
In the big GLOBAL SETTLEMENT announced yesterday, evidence released by New York Attorney General Eliot Spitzer’s office paints Grubman as an agent of Salomon Smith Barney’s investment banking arm who was posing as an analyst (see Salomon Slammed in Settlement). He was willing to do whatever it took to generate new financing business (see WorldCom's Grubby Secrets). Spitzer and the Securities and Exchange Commission (SEC) have determined Grubman should pay a $15 million fine and be banned permanently from the securities industry. Not a bad retirement if you can get it.
Fittingly, the news broke on the Monday of Networld+Interop. Here in Vegas, after all, Networld+Interop is but a shell of its former bubbly self. They say 40,000 folks will arrive – well down from numbers closer to 100,000 in the boom times. But judging from the lack of cab lines and the sparsely populated streets, even that figure seems low.
As tumbleweeds tumbled along past crates of Ethernet switching gear, I tried to find somebody here in Vegas who knew about the investment banking settlement – or even cared.
“Spitzer? Was he the author of an IETF draft?”
Herein lies the good news… These days, the technology hunting grounds are largely devoid of the money mavens. They’re not gone because Spitzer and the SEC are cracking down (if you could call it that) – it’s because the market scared them away long ago. Wall Street wolves need money in order to feed. The easy prey is gone.
As we’ve learned, the bursting of bubbles creates truly dismal business climates. One could dwell in bitterness about the inadequacy of the settlement. But whether it’s a fair settlement or not, the event does serve as a sort of punctuation mark on the era of bubbleheads. Here in America, where would we be without climactic eras of speculation?
Stranded in this great wasteland know as the “capacity overhang,” it’s now back to business as we know it: Technology, to be successful, must have significant drivers and commercial applications before it becomes successful. Technology is back to earning its keep, rather than being prisoner to a Wall Street Ponzi scheme.
Real technologists have already put these times far behind them and figured out how to build revolutionary new products that will get us out of this mess.
Some experts say much of today’s post-bubble technology is targeted at unraveling all of the boxes and bits that were planted pell-mell in enterprises and service providers during the late nineties.
“These days we’re really just cleaning up the sins of the late nineties,” says Dave Roberts, co-founder and vice president of strategy at Inkra Networks. “Then, people were incented [sic] to just build up infrastructure by brute fource, and it wasn’t very elegant. We’re moving to reengineer these networks.”
It’s an interesting image – think of all the boxes bought by executives on bubble-fueled spending binges. As the government tries to unravel the crimes and misdemeanors of pinstriped pinheads, the technologists are now laboring on the sins of the overbuilt data center.
Not unlike Grubman’s Wall Street in many ways, the network has become a giant knot of string that needs to be untangled. As engineers and executives unravel their knots, there will be opportunity for crafty entrepreneurs. Chaos breeds opportunity.
— R. Scott Raynovich, US Editor, Light Reading