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Hype Vaporware, Go To Jail?
Tim Dierks writes "The New York Times (registration required) has an article describing a federal case against executives in Enron's broadband data division, based upon the charge that Enron claimed that a software platform was more complete and more functional than it actually was. It seems to be that if this case holds up, most of the software industry is guilty. Would the world be better off or not if it was illegal to overpromote the functionality or features of software?"
I think vaporware is critical on all levels in many different arenas. Not only for consumers but for developers as well. If companies aren't able to throw out plans and ideas then innovation is stifled. For consumers this give people a great place to see what is coming soon and to learn to expect more from technology companies thus pushing more and more creativity in the industry.
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If release dates are touted and pushed and touted and pushed, would that constitute vaporware? I know of one company in particular that was guilty of that severely until August 24, 1995...
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I don't know if this specific case is the right or wrong way to go about it, but there are a great many American companies that desperately need to have the fear of law put into them.
How about we apply the same logic to overstated legal claims, too? Especially those designed to spread FUD about a particular product, hmm?
I'd be curious to see, specifically, what the "functionality" the case is talking about. I was the lead QA engineer for a time on the Broadband Streaming Media platform.
The organization had a LOT of sharp engineers. Unfortunately, the management was completely incompetent and didn't allow many of the better engineers to have a say in functional requirements/technical specifications.
There was also a disturbingly bad attitude that pervaded the works at EBS as well. Case in point: during one meeting, I made the point that the service level metrics they were using were horribly vague. I didn't believe we should do business like that (goodwill is, I think, an important concept in business), but their response was "oh, if they'res a problem, we'll just sick our lawyers on them." Assholes.
I suspect that an answer common to comments here will surface once again;
Closed Source projects would be mostly 'at risk', as they can claim to do anything without simple review by the user/the masses to make sure of this.
Open Source, however.. the client has the code, and can determine for themselves, or have determined by others, that the program will or will not live up to any claims.
In other words - yet another instance where Open Source would be exempt from common practice based on the premise that if somebody has the code then they have the means to verify, bugfix, adjust and invetigate claims themselves.
I think we can attribute this same kind of advertising to what you would see on TV in the middle of the night. "It slices! It dices! It feeds your pets!" This is the kind of marketing that everyone has grown used to. While in the computing industry there are numerous sites which review software products, the ability to download demos or trials, and then you can avoid the whole problem by using OSS..
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based upon the charge that Enron claimed that a software platform was more complete and more functional than it actually was.
Boy, this sort of behavior is rampant among companies small and large. I have known several small software companies whose sales divisions were always making promises that were not grounded in reality. Promised functionality that had simply been discussed, but was not actually in code at the time. I'd say to the sales managers, "what the hell are you doing?" to which they would reply, "making sales".
That was hugely dissapointing for me as I would much prefer a product based sales strategy where something is not announced until it is ready as opposed to a timeline driven or sales driven paradigm where products tend to be pre-announced and then released half-assed.
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Law is notoriously slow to catch up to technology. It was years after the first car showed up that someone had the bright idea to install traffic lights, or impose a speed limit. More recently, file trading took the RIAA completely by surprise-- it was many months before they even acknoledged the problem, let alone started to take legal action.
.Mac service... not from vulnerabilities, but from sheer load on the infrastructure. All it takes is for some pissed off, Mac-using litigator to realize that negligence on the part of Microsoft is damaging a public utility, and we're off...
In the case of damaging actions which are currently part of accepted business practices, I think we'll start to see the law come around. I'm particularly interested in when the first major lawsuit against Microsoft will appear for lost business due to mass internet slowdowns from Outlook virus propogation.
I just clicked over from MacMinute, where they reported the BugBear virus had slowed the
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I agree that tossing out ideas must remain legal, but there are different types of vaporware. I for one see no reasons why it should be legal to imply that you have a reasonable capability to deliver something when you know that you probably don't. That is called initiating fraud in libertarian terms. If I tell you I can build a house for you and all I know how to build is a basic shed, but I'm in the process of learning how to build a nice house, don't you think that's not merely tossing out an idea but rather fraud?
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Good! I'm sick and tired of buying software that is NOT up to par as the advertisements claim to me.
For example, if I were to buy a car that was advertised at getting 80 MPG, I'd
*EXPECT* 80 MPG!
What is even worse than that is, you can't take the software product back!! (Or at least I have NOT found a store around here that'll take the product back)
I think, in what will be considered "criminal" in the Vaporware world is whether or not there's money involved. It's one thing to put on a smoke and mirrors show in order to get more investors money - and then not spend that money on what was claimed to be invested in.
Investors? Investors?
Why is investors money more important than Customer's money? In fact, screw the investors. If customers' money is stolen through vaporware, then the investors are not the ones who are wronged the most. The customers were screwed. If this adversely affects the value of the company, then the investors have a different cause of action due to the bad management that did a criminal wrong and resulting in harm to investors.
I'll see your senator, and I'll raise you two judges.
I would expect that the Greman readers of
Whin I lived there in the early Late 70's, early 80's one of the cultural differences between Germany and the United States that stood out was that the law prohibited making false claims, and was strictly enforced. If Volkswagen claimed that it's car was better than Ford of Germany, it has better be specific, and provable, not just opinion, inference, subjection.
And the Government took great joy in persuit.
So would software be better if it had to tell the truth? Again, Ask Germany.
No. Currently, the Federal Trade Commission allows "Puffery". A slight exaggeration of a things greatness. Or speed. Or value. An example would be video cards. How can everyone advertise they build the fastest cards? They all do. They are faster than everyone elses, at one particular mode or function. This is where driver fixing for benchmarks comes into play. It allows them to make claims that aren't fully truth, or fully lying.
Another example of puffery that goes too far: weight loss pills. The FTC recently persued over 30 diet pill manufacturers for making entirely false claims. Have you seen in a magazine, the advert where there are side-by-side pictures of before and after using a product. The FTC realized that these before and after shots were really airbrushed, processed, computerized, or somehow otherwise altered. In many cases, the before and after shots didn't even have the same people; the head of a fit person was grafted onto the body of an obese person. This is blatant false advertising.
There is a difference between false advertising and puffery. False advertising is when claims made are false in entirety. Microsoft does have functional security; it is just far more lax and insecure than they admit.
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
Puffery, exaggeration and just plain lying to the public about your product is usually considered pretty tame stuff, especially if you qualify your fibs with enough weasel words ("we believe", "according to" "you should see" "tests show", etc.). Even if you don't qualify them, but use your tall tales primarily to sell the product, you usually don't incur the govt's wrath (health claims excluded). No one is generally prosecuted for falsely claiming they make the best widget or for failing to meet a delivery date. However, lie or exaggerate to the "market" in order to affect your stock price, (in other words, investors, analysts and the SEC) and all hell breaks loose. Looks to me like this is probably what the fuss is about. It's not necessarily right (why do investors get more protection than customers?) but I don't think it's anything new, Times article notwithstanding.
It all comes down to that. Marketing people are not accountants or financial analysts. Their job is to oversell everything. Then the legal department has to come in and put disclaimers all over the press releases.
After reading many on the comments here I have a number of things I would like to say. First, for the last 16 years I have tried to honestly create solutions that are innovative and useful. At the same time I have tried to set expectations and schedules that were achievable. This can be a difficult process and is made more difficult by both the engineers and management.
At one company a number of years ago (who shall remain nameless), I was told by my manager to cut my schedule in half. This should be based on hireing 3 new engineers (doubling my staff). And then she said it did not matter if they were actually hired (we had no reqs for them) because it was expected that software schedules will slip.
I the other side I have not been selected for several very interesting projects as an engineer because I was honest with the manager about the chances of success on time. I would not commit to having a product on a data I knew could not be achived. On at least two of these I was brought in in the end to try and work some of the problems out. One was so badly done I left for another company rather than be stuck with it.
Since then I have been just and engineer on a couple of projects and back in the low level manager / project architect position on a couple others. I now have an MBA and more training in project managment. I still do not know how to adaqutly bring the two levels together.
The MBA tought me some basic business information which has helped me alot. It also tought lots about managing employees that I beleive are more contributors to the problem than solutions. And I think this is the basic problem with Enron Broadband screw up.
Enron is just one example of the problem. The whole dot com crap more of the same. Most of it starts with somebody who has an idea, builds a business case for it and downplays all the problems. Expectations to investors are set that are unrealistic due to lack of business sense. Investors put money into it no understanding the technical road blocks and set expectations back to the company that are unrealistic. A great deal of this goes beyond tacking a calculated risk.
In this industry, everyone has a grand story with a kernel of truth. Open source software is no different. I like it because I can take the source and solve my own problems if I have the time. However, a very small percentage of people can do this so it is at best a minor argument. Much of the claims I have seen over the years are out right fraud. I left companies that were good because a buy out changed companies from engineering to hype / fraudulent.
Big business in the US is based mostly on hype. To keep "market share" this is necessary. Enron Broadband was a hype. It had a core of truth masked by hype in a search for that all important market share. In this case it was also fraudulent because its hype was so large that it was out right lieing and not just streaching the truth. It occured because business in the good old US of A is about making money and NOT about producing products. As long os the multi nationals can keep paying off politicians this will not change.
My tirade is ended. All of you who stated you could go to jail if this is true, check your resumes. In the economy today getting fired is just as bad as going to jail. Maybe you are guilty.
Consumers didn't get hurt one bit by Daikatana taking four years too long, but Eidos took a $30M hit. Worse, the reviews, word of mouth and demo ensured that to this day the game sits in $5 dust bins.
However, convincing people to buy into a streaming video technology which really consists of a VCR in a PC case (not in this instance but in another I've heard of) is a vaporware scam.
I think people are confusing frustration at sliding ship dates with an actual crime.
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Would the world be better off or not if it was illegal to overpromote the functionality or features of software?
Too many of society's current problems have to do with the ever-widening gulf between "legally acceptable" and "morally unacceptable", particularly in the business world. WorldCon, Enron, the whole investment banking industry pump 'n' dump of the late 90s, the car dealer, and many commonly accepted marketing practices can ALL be blamed on people doing "what's legal" but which are by any common standard of ethics dishonest.
Even spam (especially spam?) can largley be blamed on people marketing "products" which really don't work or for promoting "deals" which really aren't.
It'd be great to see more significant penalties and more streamlined punishment procedures for what essentially amounts to dishonesty for dollars.
The case of vaporware is essentially just a subset of the larger problem, and can be a particularly malicious tool used by big companies against small companies when product choices and switching are high-cost endeavors.
What about a company saying 'don't buy our competitors product, b/c ours will have xyz when its released in a few months'?
You are wrong about puffery. Puffery is not a "slight" exaggeration... it is an over-the-top claim that is obviously not factual... like claims "this is the greatest car in the history of the world!"
Back to the original post, it is easy to define the endpoints of what should and should not be criminal vapor-hyping... if you do it to forestall consumers from buying a competitor's product... if you do it with the intent of making a competitor try to duplicate it.... Basically, if you do it to gain a competitive advantage, but know it is a feature/product that you aren't going to offer or not in the way you promote it.... that deserves some time in the iron-bar timeout room.
Announcing something that you simply fail to accomplish or not following through on something that the market tells you they don't want after you announce it.... is at the other end of the spectrum.
The grey area in between is the killer. You have to get into the state of mind, and big corps are good enough at masking the details, they will make what should be criminal vapor-hyping look like innocent failure to produce. They will introduce "weasel words" into everything... instead of saying "XX will offer 4x speed over YY" it will say "we hope for XX to offer 4x speed over YY"
Essentially, you will have to have a smoking gun memo saying "I know there are no plans for it, but lets announce that XX will have feature blah-blah anyway to preserve market share for 6 more months."
The only other way to do it otherwise, is to write a statute that requires a party challenged on its claims about future products to back them up... and then you get competitors doing it for harassment and to uncover a competitor's strategies. The FTC (and FDA) already has this problem in several areas.
Clear as mu
This isn't an issue, because anyone that installs commericial software (typically) forfits any right to protest, copy, refund, etc. before they even install it through the court-proven click-through EULA.
I suspect it would mostly apply to more of the custom-application market (banks, hospitals, restraunts, etc.)
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