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The Cost of Bad Behavior

Like many of you, I watched with equal parts grimness and satisfaction this week as Bernie Ebbers' was convicted on all the counts of fraud and malfeasance brought against him. Apparently the jury didn't buy his testimony that he didn't understand the technology or the accounting of a company built by crafty acquisition. Pity the investors, former employees and customers who will be left trying to pick up the pieces for many years.

The verdict brought to mind a conversation I had about 18 months ago with Jerry Gross, CIO of Washington Mutual. In the summer of 2002, he was about to commit millions to WorldCom, not to mention primary responsibility for the bank's nationwide data backbone. Sufficiently spooked by the budding investigation into WorldCom's bookkeeping, Gross flew to New York to meet with then-CFO Scott Sullivan. Over dinner, Sullivan assured Gross that all the charges were baseless and that pushing ahead with the multi-million dollar data deal was a sound choice.

So imagine Gross' chagrin a week later when he watched Sullivan on CNBC being led out of WorldCom's offices in handcuffs.

That sort of duplicity and the customer ill will it generates has got one of our regular columnists pretty fired up. Take a look at Jon William Toigo's latest rant on adding a surcharge for storage technology that's obsolete before it leaves the packing crate or that has no useful afterlife. If this is the cost of doing business with the big storage vendors, then the practice has to stop, he argues, with a couple real world anecdotes that should make you wince.

If his examples are familiar ones, or you can top them your own vendor misadventures, please drop me a line. It probably won't result in any CEO convictions, but it's time that vendors of hardware, software and services are held accountable and stop expecting customers to accept bad behavior as a cost of doing business.

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