IT Winners and Losers: Verizon Wireless, Jerome Kerviel Up; Bear Stearns, Hannaford, The Spam King Down
Winners this week included a more open Verizon Wireless and two recently freed men (sort of): Jerome Kerviel and Joseph Nacchio. There were plenty of losers: an amazing fall at Bear Stearns, grocer Hannaford Bros., SaaS adoption rates and The King of Spam headed to the slammer.
CIO — Which tech vendor had a week to remember—and which had one to forget? Which IT department needs a "do over," and which exec should be looking for a new job? On Fridays, we chronicle what went right and what went wrong in the IT world during the past week.
LOSER: Hannaford Brothers
Following in the footsteps of fellow New Englander TJX, Maine-based Hannaford Brothers announced on Monday that "data thieves" had stolen 4.2 million of its customers' credit and debit card numbers. The crimes allegedly took place between December 2007 and March 2008 at the regional grocery chain, and the thieves accessed the data during card-authorization transmissions. In a related story, The Boston Globe reported that security vendor Rapid7 stripped the grocer's logo from its list of customers on its website on Monday. Rapid7's VP of marketing said Hannaford asked Rapid7 to remove its name and logo after news of the breach went public. A Hannaford spokeswoman claims they did no such thing. As of Thursday afternoon, the logo was on Rapid7's site. Talk about a true vendor partnership.
LOSER: Bear Stearns
There has been a lot written about the historic collapse of investment bank Bear Stearns, but this is pretty much all you need to know: As of Friday, March 14, Bear Stearns had a stock market valuation of $3.5 billion, with shares reportedly near $70. On Sunday, March 16, J.P. Morgan announced its intention to buy Bear for a "fire sale" price of $2 a share, which adds up to a whopping valuation of $236 million. So what does all this Wall Street carnage have to do with IT? Remember the late '90s maxim "A rising tide lifts all boats"? Just think of how bad it smells when the tide goes out.
WINNER: Verizon Wireless
Verizon Wireless provided more details on its ambitious (and most-welcomed) plan to open up its network to handset makers and mobile application developers that aren't already part of Verizon Wireless's retail network. "Our goal is not to have you reinvent the wheel," said Lowell McAdam, Verizon Wireless's CEO, to interested industry players on Wednesday. So far, so good. Of course, AT&T is not one to be brushed aside by Verizon Wireless's time in the spotlight, and on Tuesday, AT&T announced it would hold a similarly themed conference in April. Both AT&T and Verizon Wireless are not known for their "network openness," so all of this news (which are "baby steps," say their critics) is some real progress.
WINNERS: Jerome Kerviel, Joseph Nacchio
It was a very good week for two men who have been living under dark clouds of suspicion on different continents. Jerome Kerviel, the accused "rogue trader" who single-handedly lost more than $7 billion at French bank Societe Generale, was released from prison while the investigation continues into his alleged fraudulent behavior. He had a much happier look on his face leaving La Sante Prison in Paris than what we all saw in the now-infamous mug shot taken some five weeks ago. And Joseph Nacchio, the former CEO of Qwest Communications who was convicted on 19 counts of insider trading in April 2007, learned that he would receive a new trial in front of a different judge due to a technical snafu at his first trial. Nacchio's been free on bond, so there'll be no big "welcome home" party for him.
LOSER: The King of Spam
Alas, there's no such good news for Robert Soloway, a.k.a. The King of Spam. He is now facing a possible 26-year jail sentence after pleading guilty to fraud and tax evasion charges last Friday. The King is duly known for his spamming prowess and the fact that the 28-year-old has yet to pay one cent for his civil convictions relating to his spam businesses. In 2005, he reportedly boasted that "I've been sued for hundreds of millions of dollars and have had my business running for over 10 years without ever paying a dime regardless to the outcome of any lawsuits." That could soon change.
LOSER: SaaS
Software-as-a-service certainly has a lot of hype behind it, but results from a Forrester Research survey released this week found that IT leaders have yet to warm up to SaaS products. Just 16 percent of the 1,000 IT decision makers who were surveyed said their companies were either already using or piloting SaaS product. Those who are steering clear of SaaS say their reluctance is based on several factors: they are concerned about integration with their existing on-premise software, subscription costs that may wind up being more than on-premise software in the long term, and a variety of security and application performance issues.
