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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?"
Guess Duke Nukem Forever is really screwed...
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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How about we apply the same logic to overstated legal claims, too? Especially those designed to spread FUD about a particular product, hmm?
IDNRTA, but is this applying to future predictions that don't hold true (ie. Duke Nukem Forever will exist sometime)? It seems Enron claimed that something existed at the time they said it, which didn't hold true. Surely companies should be able to state that their product will be at point b in production by date x, (whether they truly believe it or not) and then have it at only point a when date x rolls around.
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.
Also, just for reference, even if the prosecution succeeds, it just means that you can't lie to shareholders about vaporware. There's still nothing wrong with sowing FUD against competitors by making vaporware claims in your advertising so long as you keep them out of your stock prospectus and annual report.
It's just the executives who go to jail. That's one of the risks that go along with the insane salaries, bonuses, interest free loans that get forgiven when they become inconvient, stock options, etc.
Of course, if there were any real justice, every person in every marketing department everywhere would be forced to use nothing but vaporware to create their copy...
That's "Mr. Soulless Automaton" to you, Bub.
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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Boss: How is that <insert latest project here> coming?
Me: Oh, I'm almost done
My Brain: Mental note. Start that damn project
-- Thou hast strayed far from the path of the Avatar.
...now that Enron itself turned out to be a vaporfirm.
Look at the history of the softare industry and you'll see that honesty is the best policy.
Case in point -- Phillipe Kahn decided to "open the kimono" a bit and show off Paradox for Windows 18 months before it was ready to ship. Stock values went through the roof and people thought it was going to come out practially at any moment. Especially when he said it would be shipping in six months (18 months later it finally *did* ship).
If they'd only known at the time just how rehearsed all of that was. When they realized Paradox for Windows *wasn't* going to ship any time soon, stock values dropped sharply and Borland was investigated to see if any wrongdoing had occured. Fortunately what had been decided was that Borland's board of the time was just stupid in showing a product too soon. R&D knew it wasn't ready, but overzealous management thought that R&D was just being too cautions. Next time, listen to those who are being honest with you. Don't listen to just what you want to hear...
Today Borland (and many other software companies) all have the same policy; "We'll show it to you when it's ready. When will it be ready? When it is, that's when."
Personally I think *every* software vendor should be honest in the cost and timeline of something. And the same holds true for other vendors as well. Look at King County, Washington and the now demolished King Dome. They took the lowest bid on the dome from a company that simply couldn't deliver based on the the timeline and cost to contruct the dome. The result - Seattlites for *years* had to content with something that was dark, dismal, looked like a garbage can, and is still *being paid for today* even tho it's been demolished and replaced. If they had gone with an *honest* vendor and an *honest* price, who knows - it might still be standing today....
Now should you, as a software vendor, be held civially or criminally liable when you are less than honest about what you can deliver and when? No. I think you should be punished accordingly - your business should go elsewhere and you should simply cease to exist when your customers disappear. That's what's happened in the past and it's been effective. Many of the companies that couldn't deliver on their promises have gone. Or they *learned* (as in the case of Borland) and have gone on to thrive.
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Only if it's illegal to say that drinking a certain type of beer is going to get you more women.
Forget the whales - save the babies.
Hey,
Is the software industry the only one that "overpromotes"?
see any weapons of mass distraction yet?
You will have to pry my proprietary software $$$ from my cold dead hands!
Nobody would argue that it is critical for companies to announce where they are going, both for developers and customers.
However, I have a big problem when a company says something exists or can do something when it doesn't. This is fraud.
I don't see any issue for noting on advertisements and product packaging that a product will be able to support a given feature with an expected firmware upgrade or additional feature/download/whatever. The Internet is ideal for telling customers what is happening with their product and when/how/where updates will be available which will add the missing features.
The carrot and stick for Vendors? I know that in my own case when I've bought something that didn't work as advertised, I make sure that people hear about the issues - while they sold one to a sucker (me), there is a net loss of all the people I can influence.
myke
Mimetics Inc. Twitter
Everyone is guilty of hyping unreleased stuff.
Well, I guess that makes it all okay then.
I hear this argument "Everyone in business would do what Microsoft has done" from a Microsoft shill coworker. My argument is always "Does that make it okay?"
Everyone in politics is corrupt. So it must be okay.
All of the copyright holders are persecuting search engine dude because his code could potentially tell you where to get mp3's. So it must be okay.
(From the 70's, that's ninteen-seventies, last century...) Everyone litters. So it must be okay.
All businesses would rather just dump their pollution into the river due to cost effectiveness. So it must be okay.
So it is that case that as long as it is in the name of profit, that it is okay to do wrong? No matter what? If everyone else would also do it for profit, then it must be okay? Why don't we just get rid of many laws then?
I'll see your senator, and I'll raise you two judges.
As a programmer you make sure you document what you promised and on what schedule. And you make sure you can deliver as promised. Then when sales starts promising more faster and gets nailed by this, you can produce the documentation showing that you were delivering on your promises. Then it'll come back on Sales for promising more than they were told would be delivered. And it'll probably be worse for them, because your documentation trail will show that they knew they were over-promising and courts tend to be harder on people who deliberately write checks they can't cash.
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.