The Buzz

Blog Watch

Dell feels secure

First, it was Amazon.com CEO Jeff Bezos pricey security detail. Now its Dell founder Michael Dell who is on the security bandwagon. Heres the rather snarky recap from Footnoted.org on June 6:

"Company executives must really be feeling the heat from shareholders these days. As posted back in April, Amazon spent $1.1 million on security expenses for Jeff Bezos. Almost eclipsing that amount was Dell ... which recently disclosed its security expenditures for Michael Dell. ... In its proxy filed yesterday, Dell reported spending nearly $1 million in personal and residential security for Mr. Dell—higher than all of Mr. Dells salary for 2006 and some 11% higher than the amount spent for personal and residential security in 2005. Maybe the increase in expenses for Mr. Dell is due to increasingly angry shareholders. Theyve ... watched the stock plummet from about $40/share in July 2005 to a recent low of $25/share."

Tee Time

CA: When in doubt, advertise

Software giant CA has watched Chief Operating Officer Jeff Clarke, Chief Financial Officer Bob Davis, Chief Technology Officer Mark Barrenechea and Worldwide Sales Lead Greg Corgan recently depart.

The company has delayed its fourth-quarter and fiscal-year results for "additional work that needs to be completed on sales commission expense and income taxes" and has canceled the companys contribution to its 401(k) plan. Meanwhile, Moodys lowered its debt outlook on the company.

"We cant help but wonder what the effects of all this on morale must be," said John DiFucci, an analyst with Bear Stearns, in New York.

So what are beleaguered CA and its CEO, John Swainson, going to do? Launch a global branding campaign and sponsor the World Golf Championships. "The initiative takes the Believe Again campaign that was launched last November to the next level, focusing on the companys technology vision, called Enterprise IT Management (EITM)," said the company in a June 8 press release.

Wall Street

IBMs flat world

What do you do when you want Wall Street to see you as a globalization leader? Bring a bunch of analysts to Bangalore, India.

At least thats what IBM did. On June 6, IBM hosted Wall Streets analysts for a two-day meeting in Indias Silicon Valley. Big Blue talked about its acquisition strategy and how it will thrive in a flat world.

The big question: Did Wall Street buy it? The answer: sort of. Heres a sampling:

• Cindy Shaw, analyst, Moors & Cabot Capital Markets, in San Francisco: "In a flattening world, we think IBMs innovation strategy positions it well.

"There was widespread agreement at IBMs meeting that the world is flattening. In our opinion, the rapid pace of change as the world flattens creates great opportunity—and risk. We believe IBM is adapting its business model to take advantage of this shift, not only by lowering labor cost but also by tapping new sources of human capital. But it appears not everyone on the Street gets IBMs value-add. During Q&A, it became apparent not everyone understands how IBM can leverage leading-edge technology, sophisticated solution skills, and global capabilities to its benefit and to its clients benefit as the world flattens."

• Benjamin Reitzes, analyst, UBS, in New York: "While we have positive views on IBMs ability to cut costs via globalization and the lower cost of overseas labor, we are still wary of top-line growth trends for almost all of IBMs segments, including hardware, traditional outsourcing, consulting and mainframe-related software."

• Keith Bachman, analyst, Bank of America, also in New York: "We believe that IBM is trying to send the message that it can compete and win against the Indian service providers. IBM has 43,000 employees in India, one of the largest employers in India. We believe this is the right strategy to maintain a competitive cost structure, and we note that IBM has one of the largest teams in India, including compared to Indian service providers."

Call it a draw.

—Compiled by Larry Dignan