By The Bell

VMworld UCS sign brings back an unrelated memory

The sign at the entrance to Moscone Center last week specified that the impressive display of 16 UCS systems was not just "blinking lights", but was powering VMworld. That made me think of a situation I was fortunate to escape where racks of mostly blinking lights were used to fraudulently extract $120 million in loans from unsuspecting banks.

On September 12, CNBC's American Greed will air Fraud in Cyberspace, which chronicles the career and Ponzi-like scam of Barton Watson, CEO of the CyberNET Group. He used proceeds from newer borrowings to stay current with older loans while continuing to fund his lavish lifestyle. When the Feds finally stopped the music, he was found to owe somewhere north of $100 million against assets of only $2 million.

I first encountered Barton, or "Mr. Watson" as his employees were forced to refer to him, nine years ago when he came to northern California to discuss acquiring my Citrix integration company, RYNO Technology. Barton had been recommended to me by a senior Wyse VP, and seemed to have impeccable credentials including a Stanford MBA and former Goldman Sachs partnership. During the next six months, we had over a dozen meetings including multiple all-day affairs at his opulent Grand Rapids, Michigan headquarters.

Certainly, the first thing most people would notice about Barton was his sheer size of around 6'2" and 400 pounds. This would be quickly followed, though, by an impression of extraordinary intelligence. Barton had an uncanny knowledge about almost any subject. A valedictorian of his Belding, Michigan high school, Barton was said to be without question the smartest kid in the school district.

Barton and his wife, Krista, traveled first class around the world staying in the best hotels and eating at the finest restaurants. He drove a Ferrari, Bentley and Rolls Royce among other luxury autos. While I've never been much for the trappings of luxury, I was beguiled by Barton's charm and intelligence. He and Krista would frequently fly to San Francisco where he'd meet my wife and me for wonderfully entertaining meals at expensive restaurants. I met his top executives and spoke with his two largest Citrix clients, both of which gave his organization glowing references.

I began to see another side of Barton as negotiations progressed. He exploited his talent of quickly reading character in order to throw people off balance and make them more susceptible to his thinking. The "gut feeling" cliché became increasingly tangible for me in the form of an aching stomach, but I was determined to see the acquisition through… until he made an offhanded comment about being friends with Citrix CEO, Mark Templeton. Shortly afterward, I happened to run into Mark who assured me that he did not know Barton…and Barton was not the type of man anyone was likely to forget meeting even one time.

This encounter prompted me to hire a private eye firm to investigate Barton which eventually revealed a significant record of litigation, fraud and jail time. In the interim, I did some deeper due diligence on my own. I called back CyberNET's two big Citrix references, and this time reached someone different at one since Barton's contact was on vacation. The replacement said terrible things about CyberNET and that his company would never again work with them. I also called up both Stanford University and Goldman Sachs to verify Barton's claims of an MBA and former partnership respectively…both of which turned out to be untrue.

I emailed Barton about the strange inconsistencies and he angrily retorted, "I will not have my integrity questioned. THE DEAL IS OFF!!!" This was quickly followed by a letter from his attorney demanding the return of every document related to our aborted merger and stating that if I mentioned a word about the details of our transaction to anyone that I would be sued.

Barton managed to keep his charade going another four years. CyberNET was listed as #110 on the VARBusiness 500 with 2003 sales of $300M, though actual sales estimates are between $10M - $12M. On November 18, 2003 the Feds surrounded Barton in his posh Grand Rapids, Michigan home. After drinking a $700 bottle of Le Tache wine, he placed a 911 call to police. "Hi, this is 911 Emergency, what's your emergency?" asked the sheriff's dispatcher. "Well, there's a gun in my mouth," replied Barton. He repeatedly urged the dispatcher to relax. "The theory is that I wouldn't call you if I didn't want help. But…I just want someone to clean up the mess." Barton proceeded to lecture the dispatcher about what was necessary to make a good bottle of wine. He was found dead at the age of 44 from a gunshot wound to the head.

Author Update (08/20/2010):  James Cameron, Assistant District Attorney for Maine, was Barton’s friend as a kid and is writing a book on his life. James called and interviewed me for his book. He is since lost his position and is on trial for storing child pornography.

 

Excerpts from my VMworld 2009 vExpert presentation

I was surprised when John Troyer asked me to present on evangelism to the group of charter vExperts. I mean, come on...that's like being asked to speak about partying to a San Diego State frat house. But being reluctant to ever turn down an opportunity for exposure, I of course accepted.

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While being fortunate that I don't have to justify my daily activities, I do want to ensure that senior management knows they're getting a good return for their money, and that my blogging and Tweeting is actually benefiting the firm. This is more important now that other company execs are starting to follow me on Twitter and can see me Tweeting during the middle of the day instead of doing real work.

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Differentiation works personally as well as professionally. Seven years ago I found myself in a surprising divorce. I dreaded the prospect of going back into the dating scene...I was never that successful the first time around, and now I was a heck of a lot older. But I quickly discovered Internet dating, and then was pleasantly surprised to learn that most men have little concept of marketing. Most match.com tag lines read something like, "Great catch", "Last good man on earth", or "Likes to take long walks on the beach at sunset". I, naturally, took a different approach.

My dating experience was vastly better the second time around, and I eventually met a great lady who I married. I've drafted her as part of my evangelistic efforts – she assisted Krystal Lowe yesterday by driving the VMworld spouses up to tour our good customer, Korbel Wineries. By the way, the VMworld wives were joking about how their geeky husbands upon arriving at the Moscone Center immediately flocked to the huge Cisco UCS display to take pictures.

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John asked me whether or not being really smart is necessary to be a good evangelist. I can assure you from first-hand experience, it is not. Over the years I've co-authored many Citrix books and a VMware book. Many people assume that I'm an engineer who knows what he's talking about. The reality is that I work with very bright co-authors who are far more knowledgeable than me, but I get to share in the glory.

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Speaking with a client led me to the idea of approaching PG&E about extending rebates to clients who virtualize. I told a couple of our VMware reps about it in confidence, but otherwise kept the program secret thinking that it was a competitive advantage for AccessFlow. But then Diane Green was on the stage at VMworld along with the CEO of PG&E, never mentioning AccessFlow or Steve Kaplan. It taught me a good lesson about the folly of trying to horde good ideas. I might as well put them out there and get credit for them.

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The first company in the world to receive a utility rebate check for virtualizing was our good customer, 1-800RADIATOR – which has about 25% of the U.S. radiator market. The CTO was speaking for us at a VMware seminar, and held up our T-shirt which had a picture of VirtualMan unplugging a server and which read, Fight global warming…virtualize now. The CTO said, "Steve gave me this T-shirt and I'm thinking, 'What the heck is this? We're a radiator company. We like global warming.'"

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Like many things, you can either put a little effort or a lot of effort into evangelism. If it's the latter, I encourage you to do some self-reflection in order to ensure that your personal objectives are in line with the level of time commitment required. In my own case, before I decided to commit to a high level of evangelism at INX, I first did some extensive soul searching. What I realized was that, deep down, what I really want….is to make a lot more money!

 

 

Why We Sold AccessFlow to INX

As the June 9th anniversary of our sale of AccessFlow to INX approaches, I've been reflecting about our decision and how things have turned out.  We were fortunate in that AccessFlow’s success as a leading VMware partner led to a fair amount of interest from potential acquirers.  In early in 2008 my partner, Gary Lamb, foresaw the coming convergence of VMware and Cisco in the data center, and felt it important that we be aligned with a strong networking organization.  We agreed to be acquired by INX last June because of the firm’s stellar reputation as one of the nation’s top Cisco partners.

In our acquisition discussions with INX’s executive team, we made it clear that we did not want to become the virtualization division of a networking/UC company.  We were assured that INX was making the investment to acquire AccessFlow because the company wanted to become a leader in the data center virtualization space.

INX has lived up to the promise.  The firm quickly became a VMware Premier Partner, acquired a seat on VMware’s Partner Advisory Council and began hiring great VCP engineers at its branches across the country.  And while it was initially a challenge to convey the virtualization messaging to 125 account managers steeped in “speeds and feeds”, the receptivity has been fantastic.  I have to confess that it is a bit intoxicating to be ushered into large Cisco accounts across the country in order to talk about our virtualization vision to a very attentive audience.

It turns out that the Cisco and VMware partnering went beyond what we expected.  Cisco’s VN-Link technology is incorporated in the vNetwork Distributed Switch of vSphere 4, while VMware technology enables the existence of the Nexus 1000v , and to a large extent, the market for UCS and the Nexus 5000 and 7000 family of switches.  Products from both organizations are, in our opinion, essential if the objective is 100% data center virtualization – something that Gary and I have felt should be the goal since we co-founded AccessFlow in May of 2005.

Last week INX achieved another milestone in data center virtualization by being one of the first few companies to receive the Advanced Technology Partner certification for Cisco’s Unified Computing System. http://finance.yahoo.com/news/INX-Achieves-ATP-for-Cisco-bw-15169875.html?.v=1

Accent on Sales

Our VP of Sales says that I have the best job in the company – and he’s probably right.  I get to go around the U.S. accompanying our account managers on data center virtualization (DCV) sales calls.  Although I’ve primarily run companies over my long career in IT, the favorite part of my job has always been getting in front of customers.  It’s especially a kick now that I work for INX to be introduced as a DCV expert and be able to participate so fully in the most enjoyable part of the sales process.

The experience with INX has also expanded my perspective because I meet with so many different organizations across the nation rather than primarily in Northern California.  One of the interesting things I’ve observed is the power of accents.  I’ve often wondered why accents tend to hang around in many places despite the globalization of our economy, the transitory nature of our country’s inhabitants and the media bombardment of primarily accent-free messaging (at least accent-free to those of us from California).  The answer became evident to me during a recent trip to Boston.  One of the local INX DCV team members had not previously been introduced to most of the folks with whom we were meeting.  Nonetheless, when he addressed them in his heavy New England brogue, they noticeably relaxed and responded with an interactive demeanor borne from a sense of familiarity and comfort.

I concluded that accents are a means by which people subconsciously perpetuate a sense of shared geographic culture.  When our Boston team member began speaking, the customers knew he was one of them – and immediately embraced him as an insider.  This probably explains why it is particularly difficult for outsiders to sell into tight-knit enclaves such as New England.

Sandler Sales Training is a popular course which includes a methodology whereby a salesperson is supposed to mimic the speech patterns of the customer.  Proponents swear that it works.  If true – it may be partially due to the whole accent/culture mindset.  It is one of my goals to continually improve in sales, whether in Boston or Houston, so I need to take Sandler a step furthah and think about larnin’ some different U.S. dialects.  Talk to y’all later.