In my book, "Asymmetric Marketing: Tossing the 'Chasm' in the Age of the Software Superpowers", I characterize the competitive challenge facing 21st century ISVs by using the metaphor of a sandstorm. A sandstorm characterized by impaired revenue visibility in locked-in superpower-dominated enterprise markets, positional confusion in rapidly eroding categories, intensified heat from regulatory oversight and management/board intervention into the marketing function, and broken sales and marketing machinery as the moving parts of your organization are impacted by all of the above.
Sanjay Kumar, former CEO of Computer Associates (now CA), sentenced today to 12 years in prison for his part in the company's revenue recognition scandal, is the latest high profile casualty of this sandstorm-like competitive environment in the software industry. The scandal in question took place as the bubble was bursting in 2000, and involved the desperation behavior of the so-called '35 day month', in which deals were backdated in order to 'make the number' in a given quarter.
Was this practice a crime? Yes.
Was this practice a sign of broken marketing and sales machinery, and a dysfunctional operating culture? Yes.
Has Kumar stepped down from any leadership position at CA? Yes.
Has CA corrected its bubble-era revenue recognition practices in favor of its subscription model? Yes.
Should Sanjay Kumar be going to prison for 12 years? No.
For the record, I don't know Sanjay Kumar. I have never met Sanjay Kumar. And Sanjay Kumar has not PayPal-ed me a few million bucks to come to his defense.
And also for the record, I purposely did not include CA among the list of software superpowers in my book, despite their multi-billion dollar top line, because of the significant brand reputation crisis that resulted from this scandal. As well as from the fact that software superpowers with high levels of customer lock-in and cross-category asymmetric market dominance usually don't need to back-date customer invoices. They creatively manage customer lock-in and dynamic revenue growth within the parameters of both anti-trust and accounting law, thank you very much. That's how they got to be software superpower natural monopolies.
But 12 years in prison for Sanjay Kumar for back-dating customer orders during the bursting of the bubble. That's what I would politely characterize for the judge as a non-productive sentence. A sentence that reflects a post-Enron political agenda more than justice. A sentence that does not allow the industry to learn the really valuable lessons from the parable of Sanjay Kumar. The parable of a software CEO getting lost in the sandstorm.
My suggestion. Sentence Sanjay Kumar to go on the road on his own nickel for the next 5 years and tell his story to every software CEO, CMO and CFO that will listen. Especially the part about how the culture of the organization is the key competitive differentiator of the organization. And if the culture of the organization is broken, well...As the Scottish say, shite happens. Better yet, sentence him to write a book titled "Memoirs of a Broken Marketing Organization'. Given away at no charge to students of marketing everywhere.
So Free Sanjay Kumar. And let us all learn in his own words about the shite that has happened to him and to his former company. From the standpoint of the new generation of entrepreneurs in the 21st century software industry, that's a whole lot more valuable than the supposed $400 million dollars in lost shareholder value that is the basis for his sentence. In fact, put his parable on the CA balance sheet as an intangible asset. And let the whole industry leverage it. As one component in the open source of software industry 'worst practices', which are as valuable as best practices. Especially in the superpower sandstorm.
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