STEPHEN RICHARDS AND THE CA FRAUD

My Weekend Herald exclusive on Stephen Richards, the New Zealander caught up in the Computer Associates securities fraud scandal is out now. You can read it here.

The overall feeling I'm left with after meeting Stephen again and researching the story is that a huge amount of good talent was frittered away in his whole debacle.

Kumar was already a wealthy man before the period covered by the indictment. Stephen was making serious money himself. I just can't explain what possessed these men to
let this go on and to be complicit in it. It's do to with the lust for power, wealth and prestige within the industry and is something only men as ambitious and confident as these would understand.

As a companion piece to the article, here is an abridged excerpt from the 12,000 word transcript of my San Francisco interview with Stephen Richards...

STEPHEN RICHARDS INTERVIEW – MONDAY DECEMBER 4, 2006

PG: Through the 90s at CA, how sales driven were they? Was there a huge amount of pressure to get sales in with pretty aggressive sales targets?

SR: Yeah, always aggressive sales targets and the culture was always very sales focused. Everybody was focused on doing that. Remember that in the early to mid nineties, access to internet was not as strong as it is today. So the whole concept of the stock price and how the company was performing, you were kind of a little distant from that. There was an element of knowing that you were only a small fish in a big sea and that beating your number by 20 per cent was going to make a difference but not a great deal of difference. I think Australia was doing a hundred million in revenue a year and when you think the company was doing four or five billion in revenue, it’s a pretty small percentage.

PG: So it wasn’t until you came to the US that those types of things really started to become more apparent to you, stock price movements and things like that?

SR: Yeah, and one of the things that I tried to do as far as my reports around the world were concerned, was give them a level of visibility as to why this was important. What a difference Italy or Hong Kong or China could make to the overall performance of the business. You’d let them know that their contribution was important versus irrelevant to the overall business.

PG: Being in the states in 1998, we’re coming into dotcom boom era, people more focused on stock price movements, could you see that people were hanging more on these quarterly earnings, hanging more on the stock price? Was it something the company became increasingly sensitive about?

SR: In the industry that’s very true. CA was never considered to be part of the dotcom boom. They were a legacy provider in legacy markets so they didn’t see the explosive growth in their stock price that a Sun Microsystems or Oracle or Microsoft saw during that timeframe. Growth was good but much more stable as far as revenue growth was concerned and certainly stock price growth. I don’t think we saw a change in the organisation based on those markets. Unicenter was just coming to be a real force in that area. That was probably the main product we had to approach those sorts of technology companies with.

PG: As far as analysts were concerned, were you seeing more of an obsession with the share performance of the company?

SR: I didn’t have exposure to the analysts until around the North American business. But they were very interested in customer satisfaction because that had been a challenge for the business historically. Because we were considered a legacy player, they had a number of other legacy players they followed as well, BMC, Compuware, to a lesser extent IBM. Their focus was very much on the acquisition of competitive replacements versus not necessarily the revenue growth you were seeing, but they were worried about the sustainability and growth of those markets. There’s no doubt those markets are big markets but there’s also, when you look at the mainframe base as an example, only so many mainframes in North America, only so many worldwide, if you’re going to continue increasing your revenue, you’ve got to be taking business from other companies in order to continue to grow your business. They were focused on which deals did you replace BMC on, or IBM or Compuware. That was their predominant focus as we moved forward.

PG: So leading up to the millennium, the perception was that it was a legacy company trying to change and there was a little conservatism on the street about the prospects of the company. But there were other things going on in the company, Wang made that huge pay out to himself and a couple of others. What did you think when you saw that happening?

SR: I had a different level of knowledge about it than most people did. In hindsight, I think everybody would agree it was about the dumbest thing the company ever did. Not the least of which was a level of anger that the market and the customers expressed over that size of a transaction. But you know, I knew for the previous three years, those three guys had not received any options at all. The reality is if they’d received consistent grants in line with what they’d received previously, the numbers would have been much the same based on the growth of the business and the growth of the stock price. It was a dumb thing for the compensation committee to do, it was a dumb thing for those three leaders to accept that it was the way they were going to have it done. They’d have been much better just taking options like everyone else in the industry does. Nobody bats an eye at the size of the option payments the CEO of eBay or Yahoo gets because they’ve been earned over a period of time. It’s not just one big number put out there as a chunk of money and I think there was a very negative reaction to that in the marketplace.

PG: That reflected badly on the company, but did you feel, that if you played your cards right, you could expect a similar sort of remuneration yourself?

SR: No. I thought it was a one-off. Frankly, I thought it was irresponsible. And the company learnt some lessons through that process. I didn’t have an expectation that one day I could take in something like that. I was happy earning the money, the option allocations I was getting. I was focused on growing the profitability and stock price of the company and being able to benefit that way.

PG: It was your ambition to lead CA?

SR: Yes.

PG: Sanjay was grooming you as his right hand man?

SR: I believe so, yes.

PG: This brings us up to the time covered by the indictment. If this was going on so long, why did they only focus on those quarters in 1999 and 2000? Why did they hone in on that timeframe?

SR: I really don’t know. I think it was the last two years of the old business model. The Government has neve expressed any concern over the new business model and the way those transactions worked. Those were probably the last two fiscal years they could look at and say “this is the behaviour that existed in the company for a long time, these were the last two years that it existed.”

PG: If they’d looked back earlier, the policy would have been the same in the 1990s?

SR: Yep. Absolutely, even back into the ‘80s.

PG: Do you think from your interaction with other software companies that the sales guys in those organisations were doing exactly the same type of thing?

SR: Absolutely. It was an industry-wide practice. I think it’s important that people understand the difference between some of these types of transactions and the way that business was conducted and the way some of the other bigger names that had significant problems. CA is still a viable and thriving business today. The transactions were not made up, they were not fraudulent. They were legitimate transactions, customers paid for the software, they had valid licence agreements. It wasn’t a case of dreaming up something out of nothing then sticking it in the books or pulling it out of the following quarter. These were legitimate transactions that carried cash with them. The cashflow of the company was never affected by any of the processes.

PG: Even in the restating it was only a couple of million dollars –

SR: A couple of million dollars on the earnings, but from a cashflow perspective no change. We’ve argued that the valuation of the company is obviously tied to cashflow as opposed to the earnings aspect of the business. Fundamentally, I’m not sure that there was a tremendous amount of impact on CA’s ongoing viability associated with this.

PG: So you think it’s unfair to tar CA with the same brush as Enron, WorldCom, Adelphia and all those others?

SR: Yeah. They’re radically different. WorldCom bankrupt, Enron bankrupt, Adelphia bankrupt, it’s a radically different environment to those. There were no shell companies where liabilities were hidden or liabilities converted into assets or any of that kind of stuff. This was simply a timing issue of a deal coming in and being recognised two or three days earlier as opposed to two or three days later. You talked about the restatement. When you go back and restate, it nets out to zero, because it a quarter starts on the fourth and finishes on the fourth, you’ve still got 90 days. It’s the fact that at some point in time someone had started that process of cutting it off on the fourth as opposed to the 30th or the 31st. The quarters didn’t get any longer, you still had that 90 day period, you’re just lagging by those three or four days. If the company decided, say, it was going to do a quarter or year-end close on the 4th of April and not on the 31st of March, none of this would be a problem. The company would report it in the normal course of business.

PG: Mark Schonfield from the SEC summed up CA’s actions when he released he released the indictment as: “like a team that plays on after the final whistle has blown, Computer Associates kept scoring until it had enough points to make every quarter look like a win.” Some of the percentages of revenue taken from the next quarter were significant percentages, 20 or 30 per cent. It’s implied in the indictment that towards the end of each quarter, you and Sanjay met with Ira to discuss how you were looking for the end of the quarter. What were those meetings like?

SR: I always viewed those meetings as something of a game. I was never sure if I was being motivated to go out and close more business, get stuff in that had slipped so it could be counted in the following quarter. Ira was always very tight-lipped about the overall performance of the business. Anytime he would talk about ‘this is how much we need’ or ‘here’s how much we’ve got’, there would be rounding involved. ‘How much is maintenance for the quarter Ira?’ ‘Well, let’s say it’s $300 million for the quarter.’ ‘Well, it’a either $300 or it’s $290 or it’s $310. It’s not $300.’ There was always a lot of flex in the positions that he would report. Because of that, I felt it was almost a tool to keep the motivation of the sales organisation as high as possible and drive them to close as many transactions as they could. When you look at any software company and the revenue that they generate, you get towards the end of the final month of the quarter, it’s not unusual to see 70 per cent of revenue delivered in the final month of the quarter and of that 70, 70 or 80 percent delivered in the final few days of the quarter. From a business process perspective, we used to focus very hard on making sure once a quarter had ended there were deals that were just about closed but hadn’t been closed, and the danger was always that if you let those transactions slip, and consistently slip, you didn’t see them again until the last ten days of the following quarter. The purchasing offices of the buying company weren’t motivated to get a transaction done. They thought they’d have more leverage towards the end of the quarter. They’ve all been trained in the way of US software companies which means you negotiate at the last minute to get the best price. So we worked very hard on the concept of ensuring that once a quarter had closed, that any deals that had slipped, or that we had missed in that particular timeframe, were things that we’d go after aggressively in the first 14 days of the following quarter so you weren’t chasing the same deals quarter after quarter in the last ten days of the quarter.

PG: What role did you play in setting the sales targets for the company, the targets on which those analyst made forecasts for the company’s performance for the quarter?

SR: The process of analysts setting a forecast for the company is actually very unscientific. A whole bunch of them go out and identify what they think is going to be a reasonable number for the company to earn. In many respects they lead you to the number rather than you leading them to the number. We’d sit down at the start of each fiscal year and look at what the consensus estimate was for the next 12 months from a revenue perspective and set the internal quotas based on those numbers. You have a little bit of flexibility in terms of being able to talk down the top guy or talk up the bottom guy to get him more in line, but invariably, if you want the company to perform to the expectations of Wall Street, then you really need to end up taking their numbers rather than using yours.

PG: During those quarters, CA either hit the analyst forecasts or exceeded them by a cent or two, so it was very much driven by analyst expectations.

SR: Yeah and that’s a reflection of any sales-driven culture. But when you get to the number, even if it’s a psychological thing, there’s a drop off in intensity, deep-breathe, I made it, now I can focus on the next quarter. Whether you beat it by a penny or two pennies, the business itself had so many components of revenue, whether it’s channel revenue or maintenance revenue, the way that they were recognising revenue back in those days had interest income, had revenue from older contracts that came in over time. So the actual new component of revenue, as in new deals that you were doing, was probably only 40 per cent of the overall revenue for the business for the quarter. So to be able to beat the street by a penny or two pennies, you’d need to be $20 - $30 million over the revenue number. That’s still a pretty big number and miss by a penny or two pennies and you’re $30 - $40 million short of that number. There’s been a lot made of hitting the number exactly or one or two pennies over. What people need to understand is that there’s a lot of money that goes into one or two pennies. Just because of the culture of the organisation being so sales-focused, we’d give a number at the start of every quarter to people and they would be aggressively pushed to deliver on that number. That’s the way the business had always performed.

PG: What was the atmosphere like in those meetings you had with Sanjay and Ira towards the end of the quarters? Were they incredibly stressed if they could see there was going to be a shortfall that meant they’d miss that earnings expectation from the analysts? Was there an atmosphere in the company that you had to get there no matter what?

SR: No, I don’t think so. There were a number of occasions where we pre-announced having missed results and that’s a stressful situation to go through. But every quarter would be reasonably controlled and well managed. One of the things I was always frustrated with was the financial organisation and looking at the projection of the sales numbers and saying ‘that’s never going to happen, we’ll take half of that or we’ll take a quarter of this,’ and over time we built up a better level of credibility with the finance organisation, so that when we said we were going to deliver another $200 million before the end of the quarter, we could be counted on to deliver that. Those meetings in many respects, were a tool to motivate me and motivate the sales organisation than anything else.

PG: This whole thing about the 35 day month, was that a generally accepted thing at CA that was widely known about?

SR: From a sales perspective, the concept of having some time to close out the transaction and make sure you closed out your slipped deals was something that was very common in the company, but also very common in the industry. It’s just good practice. It’s just the mentality of both the sales organisations and the procurement offices.

PG: So you didn’t see anything wrong with this, it was a practice before you became VP or worldwide sales, it was something you thought was happening widely across the industry, so saw no problem in going to your sales people in the first few days of the following quarter and saying ‘hurry up guys, we need to get this accounted for because we’ve got to make our figures for the quarter.

SR: No, I don’t think I ever reflected it as that, more, that we needed to continue to push the transactions, because if we don’t close that transaction we’ll be looking at it in 90 days time. That level of intensity was more about making sure that any deal that had slipped was a deal we’d continue to focus on and try to close in a reasonable timeframe. Was there a knowledge of it within the organisation? Probably, but certainly not one that I fostered.

PG: The indictment implied that there was a distinct move by the senior executives to make the paperwork look like it was signed on the last day of the quarter as opposed to the first few days of the next one. The indictment talks about changing time stamps on faxes. We’re you involved in that?

SR: No, no. Not at all. One of the things you learn is that there are things going on in a business you just have no knowledge of whatsoever and that was one of those things. I fired teams of salespeople for participating in programmes like that, where they had either forged a signature of a customer or had changed the date on a contract. It was a dismissible offence and I dismissed people for doing that. At the same time, I had no idea the finance organisation was running around doing similar things.

PG: As to the serious allegations about booking revenue on the last day of the month as opposed to the following quarter, you were the head of sales at the time, but you weren’t aware that practice was going on?

SR: [A long pause]. That’s a hard question to answer. Everybody has feelings ‘maybe this is happening, maybe that’s not happening’. I guess I’d always had confidence in the internal systems and controls, that there were things in place that would be able to differentiate between a deal on the 30th versus a deal on the 1st. I’ve been proven wrong on that. Ultimately, it’s my responsibility, the sales organisation reported to me, the processes and practices, either I put in place or I supported the implementation of and ultimately we came to find out that those things were part of the problem rather than part of the solution. For that I’ve got to take responsibility and I said to the judge and other interested parties, I accept that this is my responsibility, I accept there’s going to be a punishment associated with it. I’m not trying to walk away from it in any way, shape or form. It was my job and I should have done it better and I understand that there’s a price to pay for that.

PG: What you’re effectively saying is that you pled guilty to being negligent rather than conspiring with those people to do things like alter dates. You’re guilt is that you let those things go on, rather than participating in them yourself?

SR: In that specific instance, yes, that’s my guilt. There were things that we did in the sales organisation that allowed that process to occur more easily. The fact that we chased deals and closed them, the fact that if we had a contract out in a customer that had a month’s-end date on the contract and we didn’t return it until the 3rd of the month, we didn’t send it back and tell them to re-sign it. There were things that we did from a sales perspective, because you don’t want to pull a contract and take it back to the customer again, if they sign it, they sign it. There were things we did in sales that in hindsight that facilitated an initiative inside of finance.

THE PASSENGERS: A SUMMER STORY

BY PETER GRIFFIN

I was tired and numb and in that state long road trips tend to leave you. Still she insisted I take the car to Washworld and clean it thoroughly.

“Vacuum the hell out of it,” she commanded as I stood on the drive way looking at our bags spread out on the tar seal, as though ready for a customs inspection.

I was tired with the early swell of a headache. But for now the overwhelming sensation was that of numbness. Numb from the dead silence that had rolled like a fog over most of the East Cape, accompanying us all the way up Highway 2 and the length of Highway 1.

Numb too from thinking about the passengers and trying to imagine what she was thinking about the passengers. Did we really leave them behind on the side of that pot-holed road at Otamaroa Bay or had they hung on, like Max Caddy clinging bloody knuckled to the bottom of the Buick in Cape Fear? The question surely was in both of our minds.

The front door clicked shut as her tanned back disappeared behind frosted glass. There was nothing else to do. I’d take her precious car to Washworld, empty the glove box of gold coins, rent high-pressure hoses, steam and wax at a dollar a minute and purge the awful memory of the passengers. As I slid into the driver’s seat, a needle of pain shot from temple to temple, punishment for such deluded thinking.

The forecourt at Washworld was nearly empty, but the wet concrete shone purple and green with the oily detergent left by motorists recently departed. I picked up the spray gun by its slimy handle and fed some change into the wash ‘n wax. In the bay next door an athletic mother stretched over the bonnet of a dusty Pajero, lathering soap over the windscreen. I could tell she was a mother by her awkward, hurried washing technique and by the “baby on board” sign suctioned to the Pajero’s back window.

From behind the four-wheel-drive emerged a blonde-haired girl, her head level with the vehicle’s bumper. She wore a pink t-shirt that stretched to her knees and her bump of a nose was mildly sun-burnt.

Spray from the high-pressure gun drummed the roof of the Audi as I looked through the rivulets running down the window at the map book left open on the passenger seat, open on the page for Gisborne – the place where we picked up the passengers. Yellow and red lines to signify streets, pale green topography meeting a gentle curve of blue.

It all looked so innocuous on paper, so straightforward and logical. Our plan had been to spend the lazy days between Christmas and the New Year at her family’s bach with Kate and Graham, her sister and brother-in-law. As the bach was accommodating other visitors, we rented a cottage a short distance inland. The steep-roofed house was set on a quiet block of land dominated by big, old pine trees that sighed in the breeze.

It was a charming little place, full of mismatched furniture, the woodwork of a proud handyman and a coating of dust suggesting it hadn’t been occupied in some time. We
unpacked and headed down the road to the bach.

The waves rolled up Wainui beach in uneven sets the local surfers nevertheless seemed to read with great accuracy. The roar of the ocean was loud in the bach, a dilapidated three room structure. We walked along the water line, looked at the large pit of a sperm whale’s grave, played cricket with the locals. Teenage life guards zigzagged across the damp sand on quad bikes.

The bach received a stream of visitors, locals coming to talk about fish-smoking techniques or the problems caused by coastal erosion. There were sun-bleached paperbacks strewn about the place, flippers and masks and surf boards all over the lawn and in the bathroom, a faded map of the world that had the U.S.S.R. dominating its middle.

As the sun was setting I went out on the inflatable boat with Graham. We skipped over the gently rolling sea to a white buoy where he asked me to haul up the crayfish pot. I could barely lift the thing it was so heavy. Six crayfish flapped around inside the cage amid the debris of a partially eaten mullet.

We returned to the cottage and though I felt like sitting up and chatting, the way we used to, sharing a bottle of wine, her legs propped up across mine, she wasn’t in the mood. She was too tired to make love, though the setting was certainly romantic enough. We slept on the mezzanine, the house ticking around us as it cooled down.

The next morning we were up early. Graham’s catch of the previous day was being served early at the bach so we loaded the car and headed once again down the gravel road.

We were unloading the car at the beach when she let out a scream and jumped back from the open boot. I looked up surprised and went around to the back of the car where she was standing, with a look of horror on her face. In the boot were dozens of tiny brown creatures, shooting in every direction, bumping into each other, running over each other. They disappeared down the sides of the boot carpet, wriggled behind plastic trim, squeezed their sleek bodies into the slit between the back seats. Cockroaches. Dozens of them had been there. Now, with a few exceptions they were all gone, hidden. She was suddenly beside me, her sandal in her hand hammering at the few laggards that remained. She swore as she stamped at them.

“How the hell did they get in there!”

She brought the sandal down, pulverising one of them. A pulp of creamy green guts smeared across the carpet. She screamed, furious and threw the sandal down the driveway. She stamped away from the car, wiping her hands against her shorts. I looked into the boot silently, replaying in my head that bizarre sight – all those bodies shooting around like kids in a playground. It was bizarre.

How the hell did they get in there?

“Oh Jesus,” she said from behind me. She was standing there holding the body board bag by her fingertips.

“The thing’s full of cockroaches!”

She dropped it. Brown bodies burrowed into the grass all around.

The body board bag. A slideshow of images rolled past in my mind – unloading the car last night, draping towels over the washing line, leaning the body board bag against the big pine tree by the house. The expression on her face told me she’d seen the same show. She looked at me, indignant, her eyebrows scrunched together, her small lips curled back from her teeth.

“I didn’t…know.” I said.
“How much effort would it have taken to put the thing inside!”
“I’ll take care of it.”
She stamped off around the house.

I spent a couple of hours hunting for cockroaches, but they had the upper hand in this murderous game of hide and seek. I looked up to see her leaning against the bonnet, arms folded, looking at me.
“Kate found a cockroach on the kitchen bench. They’ve never had cockroaches here. Not in 25 years,” she said.

The elderly man met me at the front door of the shop.
“Mahogany birds,” he said casting his eyes over the Audi.
I gave a hollow laugh, trying to hide my confusion, then simply, pathetically said, “pardon?”
“Kate rang ahead, told me about your wee problem with the roaches.”
He held an orange can in is hand, weighing it up as though it were a hand grenade. I soon realised it was exactly that.
“They’re Gisborne roaches. Our own variety, smaller than the German and American kinds. They thrive in this climate.”
He held up the can.

Kevin was his name and he sold all sorts of things in his immaculate hardware store. He pulled the pin on his grenade and threw it into the foot well of the car, slamming the door shut. Then he proceeded to tell me everything he knew about cockroaches – how they were nine times as resistant to radiation as humans, could live for weeks after being decapitated and contrary to popular belief, were quite clean creatures.

Across the road from the hardware store, beyond sticky tar seal, lush vines stretched in perfect rows into the distance. As the toxic gas spread through the car, I wandered among the vines, checking my Blackberry occasionally because the reception was good.

Back at the car, there wasn’t a cockroach in sight. Kevin had hung a coconut-scented air freshener from the rear view mirror to try and disguise the rubbery smell of the insect bomb.

Before the board bag incident we hadn’t seen a single cockroach. Now they were everywhere at the cottage, peeking out from under the stove, hiding behind the toilet bowl in the outhouse, walking across the walls with a sluggish patter that suggested they’d grown complacent in their kingdom, seldom visited by humans.

That night I lay awake in the dark. She lay beside me, her breathing muffled by the duvet she’d pulled protectively around her neck. She’d turned away from me the moment I’d gotten into bed.

A thousand tiny hearts beat away silently behind the particle board centimeters from our heads. It was my fault. I’d left the bag carrying our boards leaning against the tall pine tree.

So why couldn’t I just say sorry?

We set off the next day, a day earlier than planned. The bomb seemed to have done its job. We left the rent money in the cottage’s electricity box along with a note informing the owners of the infestation. We pulled onto Highway 35 and headed north.

In our haste to beat the southern motorway crawl out of Auckland I’d forgotten to pick up my bulging wallet of CDs. The only soundtrack to this holiday was the disk already in the car, a solo effort by the guy from Pink Floyd – “miserable crap,” she called it.

“I awoke in a fever. The bedclothes were all soaked in sweat. She said, ‘you've been having a nightmare and it's not over yet.’”

For some reason the music calmed me.

A brief detour to Whangara. No sign of Paikea there. The marae was empty, the whole place felt desolate. On to Tolaga Bay, a silent stroll down a very long concrete wharf. The road swung inland through rolling green fields that hid the ocean.

We were approaching Te Puia Springs when she yelped and took her hands off the steering wheel. A wriggling body slid down the wheel into her lap. I lunged for the wheel as she slammed on the brake. A skipping, rasping sound as the anti-skid braking system kicked in and we veered to the left. The rear left wheel hit the gravel and the Audi pulled sideways, spinning the rear of the car around. It stopped with a wobble.

We looked at each other, both in shock. Silently, we got out of the car. No damage done. No one else on the road. The acrobatic cockroach was gone. I sat down in the driver’s seat and we carried on. Not a word was spoken.

Moving east now, the land rolled up to meet Mount Hikurangi. The landscape began to change, the lush bush gave way to dry scrub. There were boarded up shops, blockhouse pubs emblazoned with Lion Red livery and run-down weatherboard houses, satellite dishes perched atop them all.

On the Blaupunkt Floyd summed it up, in his out-of-tune croak.
“Dunroamin, duncarin, dunlivin…”

At Te Araroa, we very nearly didn’t make our planned visit to the cape lighthouse. She was slumped in the passenger seat, dozing, glancing down warily at her feet every few minutes. I’d come a long way to see this lighthouse, so I swung the car right at the beach and followed the gravel road.

Stones clattered in the wheel arches. In my rear view mirror, a big Holden raced up and to my amazement swung sideways on the narrow road and proceeded to overtake us. I looked across as the white Kingswood sailed past, a teenage Maori girl behind the wheel, her skinny arms positioned at ten to two. She looked at me with that defiance, Paikea herself. The car motored on pulling in front of us and kicking up dust, heading on determinedly towards the cape.

By the time we got there ourselves it was too late in the day to climb the 700 steps to the lighthouse. Instead I persuaded her to pose for a photo with it in the background. She didn’t stand still long enough. On the camera’s screen she was a blur of hair and skin. The lighthouse was in perfect focus.

We checked into the motel at Hick’s Bay. Bruce, the owner, had hats from all around the world pinned to the walls. We sat in silence looking out at the darkening bay, while locals leaned on the bar, laughed too loud and received regular top-ups from Bruce, who re-filled his own half-pint glass each time a patron ordered a round. She decided to go back to the room even though her meal hadn’t been served up yet. I sat there on my own listening to Bruce and his mates laughing and drinking.

The night was light, as though the Southern Aurora was visiting, though I knew well it wasn’t visible from this latitude. I walked across the property, in no hurry to return to the room. Some Japanese tourists were having a late meal on their verandah, foregoing Bruce’s well-done steaks for noodles eaten with chopsticks.

When I got to the door of our room, I saw my bag was sitting out on the doorstep. Surely she wasn’t kicking me out in the middle of the East Cape, with no means of getting home and no Blackberry coverage. I tried the door. It was open.

Thank God.

I’d barely crossed the threshold when her voice cut across the darkened room.
“Leave your bag outside. I found two in it, there may be more.”

I left the bag on the doorstep.

We were on the road early the next day, me driving again. The road was bad and required all of my concentration. But glancing down I noticed a brown body crawling around the foot well. I braked slowly, indicated and pulled over just before Otamaroa Bay. I scooped up the creature with the floor matt and shook it onto the road. The roach struggled to find purchase on the gravel then scrambled down into the ditch.

No more visits from the passengers, if indeed any remained. Te Kaha, then Opotiki, Ohope. A short stop for gas and a search for brown bodies. Whakatane, Te Puke, Highway 2, a crawl past a three car pile up, Highway 1, home.

The memory of the trip was dominated by the appearance of the passengers. But standing there at Washworld, I didn’t think of anything – cockroaches, Hick’s Bay, the gentle Wainui beach I’d probably never return to. I was mindlessly feeding two dollar coins into the wash ‘n wax machine when I realized the kid was watching me, standing there in her pink t-shirt, dirty water running between her feet and through a metal grid into the ground.

I drove the car forward to where a vacuum hose sat coiled like a sleeping snake. I pulled the dusty mats out of the car, expecting to see sleek bodies scuttling away. There wasn’t a passenger in sight. I opened the plastic foot well vents and peered in at the dark recesses. Brown bodies nestled there. I froze, my heart fluttering. Thankfully, they remained motionless. On closer inspection I could see that they were hollow, empty husks, surrounded by the debris of shattered body armour.

I reached in and took a roach between my thumb and fore finger. The shiny brown shell was intact, the wings clinging to its back, antennae erect, brittle legs extended. It had been eaten from the inside out. The passengers had turned on one another. A war had raged deep within the air vents of the Audi, a war as silent as the one fought on the outside. I held the vacuum cleaner up to the vent and the shells disappeared up the hose with a clatter. Still, I held the sole remaining roach up to the light and looked at it again.

Despite everything, I thought, there was a strange inevitability in its demise. It had survived the toxic bomb, our attempts to stamp it to death and all the same, ended up a meal for a hungry relative. It was designed to survive anything, even the loss of its own head. But it had died. Sometimes, that’s just how it is. Natural selection.

I realised I was a passenger too. I’d never been anything more. Something else had died on that long trip around the eastern seaboard and I grieved for it as inevitable as its passing was.

Just then the timer on the vacuum ran out and the suction died with a gasp. The four wheel drive rolled across the forecourt, the blonde-haired girl buckled safely in the back seat. She looked down at me through waxy beads of water and smiled. The diesel engine roared as the vehicle found a hole in the traffic and lurched forward over a speed hump.

I was left alone, crouched in the carpeted foot well of the Audi, the distant sounds of passing cars keeping to the speed limit and the stereo playing low, playing a familiar song.

That guy Pink was muttering again, some miserable crap about hitch hiking.

“And I have to admit, I don't like it a bit, being left here beside this lonesome road.”

TRADEME BROKEN

It's not often you see an "out of service" sign like this one on the front of the country's most popular auction website...



No idea whether it's internal systems or connectivity but it's the first time I've seen Trademe completely down.

UPDATE: Trademe was out all night due to a major equipment failure. Ouch, don't you hate when that happens...

UPDATE 2: From Trademe's Mike O'Donnell who says the Trademe outage was down to a load balancing switch breaking down around 9pm last night...

"Once we isolated the problem we switched across to our Auckland DR site and switched on Trade Me out of there – about 6am this morning – after an all night session by our tech team.

"They are busy doing a full diagnostic at the moment and plan to bring it back to Wellington once the investigation is complete.

"A horrible thing for our members – only mitigating factor was that 3 Jan is a quiet time in terms of traffic and auctions. About 4500 sellers had auctions close over the 9 hours. If that had been a month ago (or in three weeks time) it would have been three times that number.

"We extended all the effected auctions by 24 hours."

A FITTING END FOR AN INCURABLE TYRANT

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GUESS WHAT? VISTA'S VULNERABLE...

Microsoft's new operating system Windows Vista, has already been pulled apart by hackers and security firms who have found several vulnerabilities already.

That was to be expected. If anyone thought Microsoft was going to deliver a water-tight product this time they were dreaming. It's a shame because from a user interface point of view and in terms of functionality, Vista is a good improvement on Windows XP. I've been playing around with it for a while and in conjunction with Office 2007, it's a powerful package. Hopefully Microsoft gets it together with Service Pack 1 to plug the gaps that have been found. There'll be plenty more holes discovered, no doubt. That tends to happen when every hacker in the world is looking for a way into your shiny new operating system. Nothing will change as long as MS has such a huge market share of the OS market. With Google and Sun be the ones to change that in 2007 - 2008?

TELSTRACLEAR, DR FREETH AND DICKENS

A great story turned up just before Christmas, broken by Juha Saarinen, who generally writes for Computerworld but had this particular gem published in Aussie telecoms industry magazine CommsDay.

The story arose from a leaked memo the chief executive of TelstraClear, Dr. Allan Freeth, sent to his key executives. The is quite bizarre, unlike anything I've ever read from a chief executive.

Dr. Freeth is an odd character to preside over a telecoms company. He came fromagricultural supplies company Wrightsons and has a scientific background. He's
notable for having completely departed from the style and and approach of previous TelstraClear Rosemary Howard, who had huge ambitions for the company, but departed once she realised she would never be able to achieve them without unbundling. On Freeth's arrival, he immediately went about distancing himself from the rest of the industry and reining in aspirations for the company. TelstraClear would now be a niche player, cherry picking business only where it's profitable for them to do so. That's all well and fine, Freeth could be seen as a shrewd and realistic operator for doing so. But TelstraClear has languished under his leadership and is in serious danger of being usurped completely by Vodafone and it's new acquisition ihug.

It's ironic that the challenger spirit Howard attempted to foster has been dumped and that Freeth is now complaining that TelstraClear is being hammered by its competitors. TelstraClear is in serious trouble. Only new leadership can save the company from ending up a patchy take-over target for one of its strengthening competitors.

Anyway, here's that bizarre Dr. Freeth memo for your amusement (thanks to Juha for supplying it)

From: Infoline
Sent: Tuesday, 19 December, 2006 15:01
To: * All TelstraClear Staff
Subject: Message from Chief Executive Allan Freeth
Message from Chief Executive Allan Freeth
This morning, I delivered the following message to the Leadership Team (LT) and senior managers, at the last ‘Start of Week’ for 2006 - week 51 for those of you who are counting.

Thank you for your hard work and commitment during 2006, I want to review the progress we have made during the last year and to outline some of the challenges, and the key challenge, we are facing for the remainder of this financial year.
So, as I have started some other presentations, the first few lines from Dickens’s
Tale of Two Cities come to mind:

" It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief it was epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way …"

For TelstraClear, it was the spring of hope and light with everything before us, because we have convinced Sol and Telstra, that we have a future and we intend to win - the so called Big Plays of 2007 - more on that later.

The best of times because we have been successful at completing a large number of very important and difficult achievements - let’s consider some of them:

* Implemented our new strategy and structure, including some of the last minute changes made this year to Small and Medium Enterprises (SME) and Large Enterprise (LE)
* Established a Project Office and some impressive management of projects
* Began really thinking about the customer in a way that had been lost for sometime in the company
* Rebuilt our ISP’s ‘in flight’ and then upgraded them, so that today, we are way-ahead of the competition in dealing with spam
* Strengthened our core networks and began removing single points of failure
* Completed a good part of the South Island loop, the one talked about and never started for five years
* Have finished, done, dusted and blown-up the Mega billing system - remember the one we tried to get onto for five years
* We are building a 3G network in Tauranga that will lead the world in terms of a converged service and is, we hope, a precursor to a full national play
* Reclaimed our brand position with Hello World and product advertising
* Began looking at remuneration and leadership
* Achieved an improvement in our EOS results that reflects the turnaround underway in this company
* Cleared away the many headaches of audit problems and conducted one of the most
comprehensive disaster recovery tests undertaken by the company
* Opened our first retail store in Wellington with several to follow in Tauranga
* Reduced our install wait times in the Consumer on-net space to the lowest in the company’s history
* Undertaken a major project to see how to transform our Operational Support Systems (OSS) and Business Support Systems (BSS)
* Improved productivity throughout the company
* Taken the first steps to understanding our need to work as ‘One Team - One Company’
* Been the recipient of the benefits of the largest Government intervention in an industry since the 1984 Reforms of Roger Douglas, ironically the very philosophy which has denied us a fair go since
that time.

So yes, it has been the best of times, the age of wisdom and the season of light. But we have still not been able to translate all this into some notable achievements, namely:

* Our customer service is overall indifferent at best, rubbish at worst
* Our revenue and profit are not reflecting all the hard work
* We are slowly and gradually losing customers
* We are not hitting our Plan numbers, nor are we now hitting our forecasts – our Chairman last week accused me of running a company that ‘was out of control’
* We still work in silos and talk about them and us
* And, right now, we are on a trajectory to disaster, with a forecast EBIT (profit) loss of $7 million
for this current year - we are being out-marketed, out-smarted and out-gunned in the market place.
We are too slow in reacting and we lack the killer instinct.

Surprised - well join me, it was a surprise to me as well. Oh yes, we lack the killer instinct - we are too tame, too lame, and too timid to call ourselves a challenger.

A challenger winds their opposition, kicks them down to the ground, and then makes them bleed like something from a Quentin Tarantino movie and then finishes them off - fast.

In comparison, we are like a Walt Disney Bambi character. We are not Ulma Thurman in Kill Bill, we are more like Captain Feathersword in The Wiggles, all bluster and no action.

We are looking at the worst of times, the winter of despair, and nothing before us.
Two weeks ago, Sol’s parting comments to me were he ‘feeds those who feed themselves.’

Well,based on our current forecast, we will be anorexic and starving by the end of this financial year.

Sol has committed to this company, to me, and the Leadership Team, a number of very exciting and ‘incumbent terminating’ initiatives, some of which are underway now with launch dates for early next year. This, combined with the telecommunications regulatory changes in New Zealand, is everything we ever wanted.

At the time Sol made his commitment, he thought we were going to make $14.8 million EBIT (profit), with an attempt to get back on track for our Plan number of $19 million.

Instead, at some point over the next few weeks, I am going to have to explain to Sol that we will be forecasting a $7 million loss - with a hope of trying to get to breakeven.

Now, I know it’s not fair - I and everyone here at TelstraClear know that it’s not fair. When I started, I took over a company in operational distress. It had been the victim of not enough investment over four years, poor strategy, and a history of using accounting provisions, created at merger time, to make everyone look good.
Yes, it’s not fair, and the key point is, no one in the new team at Telstra gives a toss.

Yes it’s not fair, but let me be clear, there is no way I am going let this beat me because this company and I are going to win.

If you don’t believe that - then you are in the wrong place at the wrong time - it’s time to move on.

If you don’t have the stomach for the fight or the work that has to be done – then you are also in the wrong place at the wrong time - it’s time to move on.

But if you do, then step up and let’s move it.
So, before profit comes revenue, and as of last Friday, our overall revenue is behind Plan by around $67 million.

Assuming that’s one fight we won’t win in the next six months, what do we need to do? Here’s the

list:
* Consumer and Steve Jackson need capacity on the network, pre-consented access to multiple
dwelling units (MDU’s) and fast price changes.
* SME and Brenda Stonestreet need quick and fast on-net and off-net installations, a backlog of 300 orders turned on, and corridor plans on Arbor sorted – product development is also a problem.
* Large Enterprise and Mark Wilson need quick and fast installations and core stability of the network - I mean zero outages or at least zero effects of outages on key and corporate customers to ensure customers have faith and to stop penalty payments being incurred.
* Wholesale and Raymond O’Brien need the problems with ANIs and CDRs fixed, and all billing problems managed - they also need their product development completed.
* Unplugged or Helix must be delivered on time and to budget.
And that’s all.

Now, the other thing before profit is costs, and frankly, if it’s not providing oxygen or food, then it’s not important … shut it down and stop it where you can:
* But the headcount requests continue to pour in
* The travel has slowed down, but the message hasn’t got through
* People still continue to be focused on their pet projects or the fact they want this or that done
regardless of what’s happening around them, the context has changed, its like petulant teenagers throwing a tantrum against the real world
* Everybody wants to save someone else’s capital spend and opex
* Bottom line - if it doesn’t give me revenue, saves costs, reduce a real risk with a high probability, or improve customer satisfaction significantly in the next six months - then it’s no use to me or to you or to this company

That doesn’t mean it won’t be done, but it does mean that we live to fight another day and will do so at a time when we are generating more revenue from the big plays
So, at this worst of times, in the best of times, I really need your help - I need you all to step up, to go back to your teams and pull out your plans and budgets to ask some of the questions I have posed and the following:

* Will spending that money or undertaking that project deliver revenue this financial year?
* Will not spending that money hurt the company’s long-term success?
* Will not spending that money directly impact the business strategy? If you’re not sure, then talk to your LT member, especially about managing risk, they will help you decide.

I am not going to ask you to go away over Christmas and work this out, I need you to find the answers this week and begin stopping, starting, or changing things before you leave this Friday.

Later today, or early tomorrow, I will be appointing a person, reporting directly to me, whose job it will be to help shut down and defer projects, redirect resources to areas such as billing and sales support, to drive these initiatives.

That person, or the people they direct, will consult with you and the LT to help us focus and coordinate our efforts across the company. LT business heads will be asked to be specific about what they need and don’t need - they will call the shots in the first instance - they make the money.

Operations, support units, and I will deliver what they need while managing our costs and ensuring our strategic direction is not compromised and our long-term future is not compromised.

It is the best of times - we are poised for great things - it is our time, but it is also the most difficult of times - we need to be:

* Smart
* Clever
* Focused
* Determined
* A team in all things - a team
* And in terms of our market - premeditated, cold-blooded killers of our competition
* No tricks, no bad play, no underhand tactics, but no compassion, no quarter and no excuses, just hard, unforgiving, and ruthless actions. Giving customers a service and product set that others will die for or die by

* This is not a change of strategy, this is not a change of direction
* This is about getting oxygen, about surviving to fight the fight we want to
* This is about leadership - I know you have it in you, I hope you have it in you - if not, then you need to take stock
* This is about winning, winning, and winning
* Battles are fought and won in a day on tactics, wars are won over months and years on strategy and key principles
* If we get this right - then we are going to smash this market in 2007
* So once you have sorted out your plans, then take a rest, enjoy Christmas, rebuild your strength - next year is going to be a rush

So, finishing where I started - thank you, man for man, woman for woman, you are some of the best I’ve worked with - come back and live up to your potential - believe in it, so that it is the best of times..
It is the age of wisdom
The epoch of belief
The season of light
The spring of hope

With everything before us

And we are all going direct to Heaven

Thank you - make the next few days count.

Regards

Allan

And a column I wrote for the Herald at the time of Vodafone's purchase of ihug examining the potential impact on TelstraClear.

INTERRUPT
by Peter Griffin

Vodafone’s purchase of third-ranked internet provider Ihug is the first major side-effect of the Government’s move to open up Telecom’s fixed line monopoly.
The spirit of Ihug founders, the Wood brothers, has been well and truly laid to rest. Ihug is now owned by one of the biggest multinationals in the world, one that in May reported Britain’s largest ever corporate losses – ₤14.8 billion and is looking to convergence between mobile and fixed line services to get its business back on track.
But, more than anything the Vodafone-Ihug marriage will intensify the fight for the number two spot in the market for phone and internet services and TelstraClear is likely to be the big loser.

When Telstra bought Clear Communications in 2001, there was hope that for the first time we would have a real alternative to Telecom. Indeed we were initially promised that as chief executive Rosemary Howard repeated her “choice and competition” mantra.
Then came disaster – a Government ruling which went against the global trend not to unbundle the local loop and TelstraClear’s failure to win permission to run overhead fibre optic cables through the suburbs of Auckland.

Since then, TelstraClear has had a muddled image in the consumer market, a result of the shift in focus that followed Howard’s departure. Her vision of TelstraClear becoming a real competitor to Telecom across the board was abandoned.
Now that ambition lies with Vodafone and Ihug who with the help of the Government’s u-turn on unbundling may have the first real stab at delivering that triple-play offering of mobile, broadband and fixed-line voice services that’s so crucial to the economics of being a mass market telecoms player. Both companies know the importance of brand and of winning the hearts and minds of customers – that’s what lies behind their success to date.

Both companies have the advantage over TelstraClear of being popular with both business customers and consumers. TelstraClear lost much of the goodwill it had with consumers when it merged Clearnet and Paradise, squeezed the personality out of the two popular internet providers and let quality of service slip as the networks merged.

TelstraClear has complained for years about the restrictive nature of its resale deal with Vodafone and its weakness in not having its own mobile network is going to become more obvious as the Vodafone-Ihug relationship beds down.
Vodafone wants us all to have one handset that acts as home phone and mobile and owning Ihug will help deliver it.

Most of TelstraClear’s 029 mobile customers are business customers but the mobile business is low-margin for TelstraClear and Vodafone doesn’t appear predisposed to offering it a virtual network operator deal, the type that allowed players like Virgin Mobile to become serious competitors in Britain.

TelstraClear’s revenue increased just $11 million to $727 million in the year to June 30. The company is effectively in limbo as it waits for regulation to deliver lower cost access to Telecom’s network.

The most significant development at TelstraClear in the last six months has been its decision to spend $50 million on a wireless network – in Tauranga.

TelstraClear is still the second biggest player in the fixed-line world, but without the breadth of focus of Telecom and Vodafone, has much to lose from the latter’s move into fixed-line services.

At the launch of Ihug’s new flat-rate calling plans last month, chief executive Mark Rushworth said it was likely that Ihug would initially take more customers off TelstraClear than Telecom. There’s little love loss between those fighting it out in the shadow of the ultimate foe – Telecom.

When you can get your Ihug broadband and home phone line on the same bill as your Vodafone mobile account are we going to start seeing significant customer “churn” away from Telecom and TelstraClear?

That depends on how unbundling pans out in practice. Ihug boldly stated last year it would spend $20 million if unbundling went ahead, an investment promise more likely to happen with Vodafone as owner than if internet provider Orcon had been successful in its $30 million bid for Ihug. If Vodafone commits to a serious investment in putting equipment into Telecom’s exchanges and preserves Ihug’s strong identity, we may begin to see that real alternative we were promised.

OUT OF THE BOX

So Phitek, the Auckland headphones maker which is trying to crack the consumer electronics market after doing well making headphones for a number of airlines, decided to give away threee pairs for readers of my Hot Technology column in the Herald on Sunday. I was late putting the competition together, so instead of getting the Herald to set up a competition email address for people to respond to, I put my own email address for competition participants to respond to.

Man, it's just as well I have a Gmail account (2.7GB of storage age rising). Several hundred entries so far. I have a nifty piece of software that acts as a randomiser to shuffle all the names of the participants I've received, but entering the names into this software requires me opening each email individually which I've just spent several hours doing (while nibbling on some mince pies). Next time, I'll let some poor schmuck at the Herald take care of that.

Still, it's good to know that lots of people are getting to the Hot Technology page. As for Blackbox, it will be interesting to see how they go. I think they're probably a tad too expensive. After all, they're entering a market already crowded with some credible players such as Sennheiser, who make great headphones. I've been using a pair of Phitek headphones, ones that precede the M14 headphones, and they've been pretty good. I like how lightweight they are and the ear cushioning and headrest are very comfortable.

Still, the plastic casing around the hinges which allow the headphones to swivel position has started to crack, which appears to be a design flaw. I hope they've fixed that with the M14.

My Herald on Sunday Christmas Eve column...

THE GIFT OF GADGETS... AND THE RETURNS BIN

If you’re very lucky or have wealthy relatives, chances are you are going to be unwrapping some cool, new piece of electronic gadgetry tomorrow.

The first thing you’ll want to do is get it out of the box, so you can show it off to your envious siblings. Then you’ll want to turn it on, make it work.
That’s fine, but be careful.

To start with, take care of the packaging your gadget came wrapped in.
Just as the three-pack of underpants your mum has bought you may not fit perfectly, the TV, computer or digital camera you’ve just received might not be suitable either. Unpack carefully, keep all the plastic bags, polystyrene mouldings and cable ties. Don’t tear the box. It makes it hard to give back.

Most electronics stores have an exchange policy where you can return the product and use the value of it to spend on something else, or get your money back.
The post-Christmas sales period is a great time to browse for electronics as the “returns” bin will be full of gadgets people brought back because they didn’t know how to use them. Aside from the crinkled, pawed packaging, they’re likely to be as good as new.

With any new gadget, plug it in and let it charge, preferably overnight, but for a good few hours anyway. New devices benefit from a decent charge first thing.
While it’s charging fill in the warranty card or register online. Some say a gadget isn’t worth owning if you need to read the manual to know how to operate it. Ignore that. Make sure you read the manual, at least the installation section anyway.
They’re often badly written in pidgin English, but the manuals at least offer enough guidance to stop you frying your new device before Boxing Day.

If you’re lucky enough to receive a computer as a gift tomorrow, you’ll probably want to spend part of the afternoon unpacking it, booting it up and checking out what it can do. Setting up computers is pretty easy these days, they generally come with all the software, including Windows XP, pre-installed. Many computers come with a big wall chart that steps you through the set-up process. Don’t let that chart get swept away with the discarded Christmas paper.

And remember that you’ll want your computer to work with all your peripherals – the printer, wireless router, mobile phone, music player and digital camera.
After the euphoria of holding your shiny new laptop in your hands wears off, put it down and go and find all those discs that hold the software that are going to make your various gadgets compatible with your new computer.

Always load the supplied software driver before you plug a device into your computer, as jumping in and connecting USB cables can lead to glitches in the installation process.

If you manage to botch your new computer set-up revert to that useful feature of Windows that lets you undo all the digital chaos you’ve created – System Restore. It will take you back to just before the point you did something that made the machine go haywire.

It pays to have all your passwords for internet and email accounts handy, so you can get onto the web as quickly as possible. If someone has given you the gift of broadband internet for Christmas, it won’t necessarily work on Christmas Day. Your phone line has to be prepared for broadband which involves a technician making a modification to your line at the local exchange. There’s usually a backlog of orders this time of year, so it could take a few days to come online.

If a family member has put a wireless broadband router under the tree for you, they’ve done well. Going wireless lets you access the internet wherever you are in the house. But setting up wireless gear can be fiddley. Read the instructions carefully and make sure you set security controls as soon as you plug in the broadband cable. Christmas is a time for giving, but you still don’t want your neighbours surfing on your internet connection.

Gaming consoles such as the PS2, PSP and Xbox 360 are easy to set up – just set the kids down in front of the TV, they’ll know what to do.
But to access the Xbox 360’s impressive online features, you’ll need an Ethernet cable and to be close to your broadband connection.

If you’ve scored the Nintendo Wii, take some time to get used to the Wii-mote that’s so central to the gaming experience. Over-enthusiastic gamers have been known to accidentally throw the controller at the TV screen or hit other players. The last place you want to be on Christmas morning is in the casualty ward needing stitches for a Wii wound.

A BELATED U2 POST

I'd wanted to post my thoughts on last month's superb U2 concert, but I flew out to the US the following day and my feet barely touched the ground for the following ten days as I visited LA, San Diego, Pasadena, Kansas, New York and San Francisco.

It was a very rewarding trip which primarily revolved around visits to CDMA-centric partners of Telecom, such as Qualcomm, Sprint, and Lucent. We arrive in New Jersey the day of the Lucent-Alcatel merger so our planned visit to Bell Labs was canceled. I was gutted. I've always wanted to visit the home of the transistor. The upside was that a great guy called Bob was lent to us for the day so he could drive us around and show us the sights of New York. It was Bob's tour of Manhattan and he did a great job.



Anyway, back to U2. My thoughts on the gig, my second after the Zoo TV show at Western Springs I attended as a 13 year old, are partially encapsulated in the below column. While I thought the show was amazing and incredibly moving, I couldn't help feeling like I was at a corporate rock gig at Oracle World or E3.

There I was 20 feet from the stage and surrounded by a bunch of young people, quietly watching the show, taking photos on their digital cameras. It seems that since people stopped smoking, they made the beer incredibly difficult to buy and security was increased by a factor of ten, the atmosphere has well and truly been drained out of stadium rock concerts.

Don't get me wrong, the U2 show was fantastic, the stage and sound the best I've experienced in a long time. But where was the sweat, the surging crowd, the sheer energy you'd expect at such a major gig? It's a far cry from watching Casey Chaos of Amen fame break a microphone stand in two and stab himself with it in the Garage in London...

Anyway, an update on an earlier column about the initial U2 ticket debacle. I wrote about poor Tina, who made it into the Daily News when she burst into tears after missing out on getting a U2 ticket. She'd queued all morning, like I did and missed out on tickets as well. As it turns out, we both managed to get tickets. I was thinking of her as U2 kicked off City of Blinding Lights. Tina emailed me just before the concert, having only just read my column. Here's what she wrote:

TINA GETS VERTIGO

Hi Peter,

I have just finished reading your article:
"Why I still haven't found what I'm looking for" from way back in December 05'.

I wasn't aware of this particular article until this morning when a friend sent the link through to me. "ARRGGH! When will it end?!" was my original thought, when I read her email, titled "You never told me you were in the NZ Herald!"

I find myself emailing you now, to thank you. Why? Simply, for writing, quite possibly, one of the best articles I have read on the whole U2 ticket nightmare!

Not only did you tell the story of that morning in an accurate, first hand, compelling way, your article was relevant to the topic (IT and the U2 ticket fiasco). Not only that, you used my experience as an example and left out 'most' of the dripping despair and horror of human suffering that sold so many newspapers in Taranaki!

The only reason my story was one of the hundreds to make headlines was because a Daily News cameraman happened to be right there at the very moment, my sleep deprived, strung out, stressed self broke into a flood of tears. I remember looking up at him and marvelling at the way his entire being seemed to scream "OHHHH Human Suffering! EXCELLENT!"

I am rambling...I know. It is nice to look back, a year later, and after reading your article with wry amusement, rather than total embarrassment and despair. Of course, it does help that I now have tickets to the concerts at the end of this month! :)

So, thank you Peter Griffin - for writing a real story. It means more than you may know.

I am curious though, did you eventually find what you were looking for?


Kia Kaha...

Tina

THE NEW HERALD ONLINE & OTHER STUFF

The revamped New Zealand Herald website is now live and while there are a few missing links and content on some pages aren't displaying corrently in my Firefox browser, I'm impressed with the over-all new design.

In particular, I'm happy the Herald has broken out science from the Technology section I write for, and the new layout allows them to present more technology news and opinion on the page at one time.

The Herald site has until now been optimised for low resolution screens which means at its default setting, it's only taken up two-thirds of the screen on higher-resolution screens and subsequently has looked pretty ugly. Now it fills the screen quite nicely. RSS feeds are available for each section and there are prompts everywhere telling people to click on multimedia content. It's clear, video is going to play a much more important part of the Herald's coverage.

What has to be noted is the similarities in look of the new site to Fairfax's Sydney Morning Herald which had a nice revamp earlier in the year (see below).

But also check out the new Stuff website, which brings together the Herald's New Zealand rival papers, notably the Dominion Post, The Press and the Sunday Star Times. The site looks almost identical to the Herald and SMH sites. Some newspaper website designers have been reading from the same book.

The real changes to the Herald site will come next year when they get their online communities activities going and move into blogging and podcasting. The online news portal battle has stepped up a notch!

A STRANGE COINCIDENCE

I was in one of my favourite places, San Francisco, last week and decided to pop into CompUSA for a look at Microsoft's new Zune player. The device itself is quite nice, but a look at the physical player itself doesn't reveal the unforgivable yet avoidable weaknesses of the player.

It's outrageous that Microsoft didn't make the Zune compatible with its own PlaysForSure standard, instead, attempting to mimic the iTunes-iPod model with the Zune Marketplace. Why couldn't Microsoft have worked hard to make Zune the best Windows-centric download store so everyone would want to use it anyway. Bad move, Microsoft. The Zune is dead in the water unless Microsoft backtracks on exclusivity.

The other major miss with the Zune is the restrictions around the wireless access, which effectively only allows you to share music with other Zune users. Even then, the music expires within three days. What a waste of time. If I buy a Zune with wi-fi built into it, I want it to connect via my wireless network to my computer so I can transfer music rather than having to plug the thing in and sync it with the Zune software.


At CompUSA, the Zune was barely even given any display space alongside the numerous iPods which were attracting most of the attention. The salespeople didn't seem to know much about the Zune either. I wrote the below article about the Zune's US reception while in San Francisco, which leads me to that strange coincidence. I wanted to quote a good US tech reviewer who had played with the Zune in my story. So I went to CNet, the home of respected music player reviewer James Kim.

I've always liked Kim's work and seeing as he's from San Francisco, I thought it would be highly appropriate to quote him. I should say that Kim was a respected CNet reviewer. He was found dead of hypothermia in Oregon last week after getting lost in a remote area with his family. Kim had left his family behind at the car to go for help but the elements conspired against him. It was a real tragedy and ironically, I was watching the manhunt progress as I was in the US. I only ever heard Kim referred to as James, so never made the connection. It was weird that by the time the article went to print back in New Zealand, Kim had died out in the Oregon wilderness. A very sad end for a talented member of the US tech community.

CNet's tribute to James Kim is published here

Zune just can't get with the music

Thursday December 7, 2006
By Peter Griffin

Microsoft's challenger to the iPod - the Zune - has had a less than spectacular debut in the US, slipping down the sales charts as American Christmas shopping activity intensifies.

After claiming 9 per cent of music player sales in its first week on the market, the US$249 ($363) Zune dropped to 2 per cent of the market in its second week, according to research company NPD Group.

That puts the Zune in fifth place, well behind the iPod, which claimed 34 per cent in the same week, but had a 75 per cent share of music player sales in the first nine months of the year.

Reviews of the Zune have been mixed, with its wi-fi and video functions, software interface and digital rights management system all being targeted as needing more work.

"I do feel the Zune is three-fifths baked, rushed to market to feed the holiday electronics frenzy and nowhere near its potential as a wi-fi-enabled portable media device," wrote CNet reviewer, James Kim.

The Business Herald visited several electronics stores in New York and San Francisco, but the Zune's presence was low key, the iPod continuing to dominate.

The lack of a stellar start for the Zune may be down to confusion over exactly what type of music it can play. While it supports a good range of audio file formats - MP3, Microsoft's own WMA and AAC included - playback is limited by the digital rights management attached to the music.

It means that AAC tracks downloaded from the popular iTunes.com music store won't play on the Zune, but tracks ripped to the iTunes software from a CD are unprotected and therefore will.

The device also doesn't support Microsoft's PlaysForSure digital media standard, supported by iTunes' big rivals in the music download space: Rhapsody, Yahoo! Music, and the reborn Napster.

Even Zune salespeople are having trouble explaining exactly what playback options are available. At CompUSA in San Francisco, when asked if music from download services other than the Zune Marketplace would play on the Zune, a salesman replied: "Out of the box it can't, but I think there's a plug-in you can download for that."

Down the road at San Francisco's Apple store, a giant snowman wielding an iPod Nano music player sat in the front window, grinning wickedly as shoppers milled around the displays. Apple's simple model of one device, one music service keeps working for the Californian computer company.

Microsoft wants a piece of the action with its Zune-Zune Marketplace combination but, with sluggish sales, the Zune is likely to remain a niche player this Christmas.
FEEDBACK FROM PAUL:
Hey Peter, just read your article on the Zune performance over the first few weeks. I purchased a Zune online and had it delivered here. I LOVE the device after using am iPod for many years and three generations of device. The Zune software brought my iTunes music across so nicely, and the device itself (brown is awesome) is beautiful and fits in the hand so well. Very impressed.

FEEDBACK FROM BEN:

Is the James Kim from CNET whom you quote in your December 7, 2006 review of the Microsoft Zune the same James Kim recently killed trying to rescue his family in the moutains of Oregon? http://www.cnn.com/2006/US/12/08/missing.family.ap/index.html If so, may be worth a mention in your next review. If not, it's an odd coincidence.

FEEDBACK FROM KEITH (AT MICROSOFT)
Figured you'd want to know...the CNET reviewer of the Zune - Kim - you mentioned has been a front page news story this week. They found him head of hypothermia after becoming snow-bound in Oregon with his family.

SPOT THE SONY GEAR!

My Herald on Sunday column about the proliferation of Sony product placements and tech product placements in general in big Hollywood movies. I'd love to have a chat with a behind-the-scenes type Hollywood insider who has the task of negotiating these product placement deals. I wonder how much money changes hands, how much control the companies have over treatment of their brands. Whatever the answer, it's big business and only going to get bigger...

Tech buffs play 'spot the Sony'

1.00pm Sunday December 10, 2006

It's been an average year for movies, but a great year for average movies crammed with technology product placements.

Going to the movies these days still requires you to suspend disbelief for two hours just before you stump up your $12 entry fee. The problem is that film making is now such big business that virtually every Hollywood blockbuster is a walking advertisement for some company or other.

In the tech realm, Apple, Nokia and Dell seem to get the most screen time. There's that shot directors repeatedly mimic, of the star of the movie tapping away on a laptop, the lid positioned perfectly to show off its maker's logo. Then there's the cut away to a news flash on a TV screen that includes just enough of the screen's frame to show us who made it.

As a technology enthusiast, I feel like a trainspotter going to the movies, constantly on the look out for which gadgets or consumer electronics have been negotiated into the scene. My most striking memories of Superman Returns, apart from the evil monologue from Kevin Spacey on the boat, are the numerous shots in Clark Kent's newspaper headquarters that capture those lovely Samsung flat screen TVs. Spike Lee's clever heist movie The Inside Man was loaded with tech product placements, Apple iPods and Macs battling with Dell computers for the most screen time.

Michael Mann's patchy crime drama Miami Vice devoted much of its tech quotient to ugly, featureless satellite phones, but Nokia got decent face time with its video phones and Sony's laptop made a cameo appearance.

In fact, Sony has this year claimed the title of tech product placement king. It helps that Sony owns the movie studio that makes the movies that feature its products. That's the beauty of being vertically integrated.

Tom Hanks played a tweed-wearing professor in The Da Vinci Code, but a stylish Sony Ericsson phone or Sony Vaio laptop was never far from reach. Sony's other blockbuster, Mission Impossible III was also heavy on Sony gear, but that movie's product placements pale in comparison to the ultimate Sony advert of the year - the new Bond flick, Casino Royale. This is the mother lode for Sony. There are the numerous Sony Ericsson mobile phones - one particularly gratuitous shot shows a close-up of Bond's GPS-enabled phone guiding him along a coastal highway in the Bahamas. Like, a secret agent would need GPS on an island slightly bigger than Waiheke.

In another shot, Bond looks at security footage conveniently recorded to a Sony Blu-ray disc recorder. Later, Bond composes his resignation on a Sony Vaio while sitting on a boat in Venice, and the latest Bond girl innocently snaps away on a Sony Cybershot digital camera. I'm surprised Bond didn't take time out from his high-stakes poker game for a different type of gaming - on the Sony Playstation 3, a product the success or failure of which is most likely to determine Sony's future.

As we start using digital recorders to cut ads out of TV shows, we can expect more product placements on the small screen. The big question is: Will the computers in Shortland Street be Dell, Apple or HP?

Feedback from Jaycen:

Hey there,

I was just reading your article in the herald and applaud the fact that someone else notice's that Sony is more than obvious with their placements of their products in their movies.

I went to see Fun with Dick & Jane and really felt that I watched Fun with Dick & Jane & Sony. It was THE worst I have ever seen with reference to Product placement.

I had pretty much grown accustomed to seeing Nokia phones with the "Nokia Ringtone" and ipods etc in various films but Fun... was so far over the line I felt that I was watching an infomercial for Sony.

One case in point would be a full screen closeup on the Vaio logo slowly pulling away to reveal Tea Leoni tying away.

Another was right at the end when they set Alec Baldwin up which begins with a full screen close up of the Sony logo on the News Camera which pans away to reveal that there are people in the film too.

To be honest, I felt that subliminal messages would have suited better but the blatant branding was sickening. I went to buy a HDtv the other day and felt nauseous every time I saw the Sony logo on a tv, I think I'll buy Samsung.

THE GENIUS OF MICHAEL MANN

There's an excellent feature in The Guardian entitled "Star Vehicles" which looks in some detail at the stylistic and story telling features of my favourite director Michael Mann. I watched Mann's latest film Miami Vice for the third time on a recent flight back from the US and my opinion of it is improving. Miami Vice is a bit of a stumble for Mann but there's some great, subtle moments you can't really appreciate in one viewing.

However, Mann's three movies Heat, The Insider and Collateral are what I'd consider to be his best three movies, with Heat his defining work. The coffee shop scene is one of my all-time favourites and the gun battle in downtown LA and the final dash across the LAX tarmac and the DeNiro-Pacino shoot-out are superb. The Insider is a movie I come back to time and time again to reignite my love of the journalistic profession. The "Are you a news man or are you a businessman" discussion in the middle of the movie is superbly scripted by Mann and Eric Roth. The Insider is the movie that led me to give up the IT editor's job on the Herald and move to Wellington to study under another genius, the playwright Ken Duncum, at the Institute of Modern Letters at Victoria University.

Anyway, most people I talk movies with haven't much time for Mann's unsentimental characters, violent, humourless storylines and empty, cold style. I love it all, I'm a dedcated Michael Mann fan and that Guardian article remnided me of everything I love about the director's films.