October 17, 2003

The May Report: 10/17/2003: Another Motorola insider comments on SPS and
CSC; the Galvin succession speculation

Editor and publisher: Ron May, ron@themayreport.com, ronaldmay@aol.com,
773-525-3944.
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TABLE OF CONTENTS

The Scoop section:

— Another reader gives the inside story on Motorola IT, CSC and SPS
— Briefly noted, by Ron May

1. READER COMMENTS AND RESPONSES
1a. The Wagner Group of Companies celebrated its 150th anniversary
1b. What’s up with Learning Insights lately?
1c. Identity Theft
1d. Tony Caputo: more on NowComics
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The Scoop section:
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Another reader gives the inside story on Motorola IT, CSC and SPS

From: Name withheld upon request.
To: ron@themayreport.com
Subject: Motorola – CSC comments PLUS IT Sourcing .
Date: Fri, 17 Oct 2003 15:24:45 +0000

Ron,
I have read two of the articles/stories on this topic and have to tell
that I too would agree with most everything that was said in both,
especially with the email dated: 13 Oct 2003 10:51:19. The comment:
“Motorola IT management are useless & unfortunately there’s too many
over-paid pathetic managers who care more about their own arses rather than
doing the right job” is absolutely accurate.
The part that is missing is that SPS, in and of itself has no idea what
I.T. “is”, what I.T. “does” and how it COULD be leveraged so much better
if the organization was allowed (and capable) of doing the job that an I.T.
shop SHOULD do. So, given the complete lack of fundamental appreciation
for the I.T. by SPS leadership, it is a small wonder that I.T. is lead by a
political hack, who in turn surrounds himself with yes-folk.

On another major front, if you think that the CSC debacle is big, just
take a look at the SPS I.T. outsourcing that our friends Mike Wolfe,
Barbara Theiss & Sam Desai has pressed through to completion. Sam’s
seems to have strong connections to India, what a coincidence?? But now
we have entered into an agreement to outsource our application development,
and then will reduce our organization by 100 more people.
This leaves, theoretically, the business analysis and high level design (or
architecture) to Motorola I.T. Unfortunately, MOST of our application
expertise is ALREADY GONE, we are losing more and I wonder how well we will
be able to perform the “ba” function.

A few facts here:
> SPS IT has laid off over 50% of the I.T. organization over the last 3
years… MANY of those people being the most technically proficient
around… probably 80% of the expertise has been lost already.

> SPS has HUNDREDS if not THOUSANDS of software systems in use to support
it’s 24,000 person workforce all of which are to be outsourced
(really? why so many?? can an outsourcer really support that?)

> Layoffs happened (IMHO) with more of an eye on the political
correctness of the individual, than on the skills and value that the person
brought to the organization.. why else would we have KEPT so many “middle
level managers” as described above????

> We are about to lose another 100+ of the remaining “knowledgeable”
applications people

> Many of the outsourcers people have less than 4 years experience in
the software industry

> Clients have been told that our outsourcing activity will NOT impact
iternal projects and EXPECT that IT will continue to function “as it is
today” from a process and delivery perspective

What outcome can you see given these points? I suspect the outlook is
less than optimistic.

All this simply indicates to me that SPS is in as much trouble from an
applications perspective, if not more, than from the CSC hardware
perspective. The unfortunate thing is that there ARE a number of really
qualified people that do “get it” inside of IT. Most have been beaten
down for so long that they no longer have the will to fight the good
fight.. (How many times can you get your ass kicked??). One might ask why
they stay? Well, I can speak for myself.. I know the value of IT, the
value that we CAN bring and the opportunity that exists therein. I also
know that it COULD be better… IF and only IF SPS leadership takes heed,
comes to understand that which I.T. does and takes appropriate steps ASAP.

My (our) ONLY hope is that Mr. Anderson takes a hard look at
I.T. He really ought to LISTEN to people that understand I.I. both
organizationally and functionally, and NOT listen to the MANY idiots living
in the SPS population that have a personal, vested interest (and desire)
for the collapse of IT as it stands today.

It is pathetic here, much of the I.T. Staff is weak and several of them
have NO UNDERSTANDING of IT themselves. AND, it’s not getting any
better. maybe you could tell Scott. Dig deep, wear boots.

Respectfully,
A CONCERNED Motorola IT employee

PS>>> Please DO NOT publish my name
___________________
Briefly noted, by Ron May

* I am writing up the three events from yesterday, so this will be quick,
but I wanted to do some housecleaning before the weekend kicks in.

Since Motorolans have been subscribing in large numbers (I have to count
but I would bet it is over 100 new subscribers, many from Motorola in the
last few days) we must “feed the beast” as the saying goes.

First, my info. is that Richard Notebaert is the leading outside-of-company
candidate for Galvin’s job. Second, there is speculation that Jack Welch or
the former COO Fisher who went to Kodak may be brought in. In the case of
Jack, there are a lot of GE/Motorola connections, and the question would be
whether he would stay long enough to turn things around.

The real issue, my sources tell me, is why Chris resigned without a
replacement in hand. This has caused some disappointment and lower morale
within the firm. His resignation brought euphoria and elation, but the lack
of a replacement after almost a month has left a void.

The even better question is why the timing was what it was. They could have
had him leave at year-end. And why did they do it a week before the
company’s 75th anniversary? Furthermore, their earnings report was not that
bad.

So, one is left wondering what they were thinking.

On the subject of the CSC outsourcing deal, I need some help on research.
My information is that other firms have sued CSC for poor performance on
outsourcing. Is this true and if so, what firms, when and why?

I have also been told that the outsourcing deal with Motorola employees is
a tough nut to crack to begin with because the Motorola IT people are laden
with great bennies and any outsourcer needs to cut costs to make it a
viable proposition.

* I have been getting some info. on the fate of INTV that does not square
entirely with what Barry Loshin told me yesterday. Apparently, Fritz Golman
has started a related business in video streaming (is that right?) using
many of the same clients the INTV operation had. And, I am hearing that
Barry and Fritz were “on the fritz” so to speak going back two years. It
may have even involved a lawyer or two. The split was possibly over
differences on company direction. Barry did leave in June, that much I have
confirmed. My sense is that Barry has been reluctant to talk because there
is more there than that the company was just not making it.

* At the ITAA conference there was a good discussion of a “Buy America”
provision that has been added to a defense appropriation bill and it is
stirring up a lot of controversy. The provisions are such that 65% of any
products purchased by DoD would have to be made in America and that goes
for components as well. So, some things, as a practical matter, could not
be purchased because there is currently no domestic industry producing
them. An example is flat screens.

It is not some off the reservation back benchers who are behind this, but
rather some powerful Congressmen, including the Chairman of the House Armed
Services Committee, Duncan Hunter. I believe that Senator John Warner is
opposed to the legislation, as is the ITAA and the DoD which has said the
bill is terrible. But our own Congressman Frank Marzullo is in favor of it.

More on this later.

* The overall Federal IT budget is $60B, but that does not count another
$20B in what is called the “black” budget for classified activity in DOD,
and other national security agencies, and it does not count another $15B to
$20B in embedded systems, so the total number may be approaching $100B.

Here are three websites that one speaker recommended to the audience:

www.fpdc.gov
www.fbo.gov
www.bpn.gov

* One statistic that David Wilhelm reiterated several times in his speech
yesterday was that there is more venture capital invested in the city of
San Diego than the entire Midwest and that includes Pittsburgh —
Pittsburgh, he said, is not even in the Midwest.

Related to that, what is Tom Churchwell’s beef? It is quite simply that it
has been easier for him to raise money in Peoria and Kalamazoo than it has
been in Chicago. He has been beating his head for a number of years and
seems to be showing some wear and tear because of it.

* A minor correction. The other day I wrote about Vicarious Solutions. It
is Vicarious Communication, actually. And the website is www.vicariously.net.
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1. READER COMMENTS AND RESPONSES
1a. The Wagner Group of Companies celebrated its 150th anniversary
Date: Fri, 17 Oct 2003 10:41:50 -0500
From: Todd Tokarz
Subject: 150 Year Old Company in Chicago
To:

Hi Ron,

I hope this short note finds you well and in better health.

I am not sure if you are aware, but The Wagner Group of Companies
celebrated their 150th year in business last night.

They are 3 companies: Wagner Printing, Infocomm Print, and Jade Creative
Services.

They have current print clients that go back to 1908, I believe they
printed the annoucement posters for the Lincoln – Douglas Debates.

How about a interview and write up about them?

I mean, 150 years in business, 6 Generations of Printers located in the
North Loop, there has to be a story there!!!

If you would like their contact information, I can direct you to their
Communications Director.

Keep up the good work, it is great to receive TMR again in my in-box.

Take care,

Todd

todd tokarz
business development manager
b|media
1375 remington road
suite e
schaumburg, il 60173
p | 847.839.8900 x14
f | 847.882.9319
www.bmediaweb.com

“In the business world, everyone wants to “b” something. Some want to “b”
more exciting. Others want to “b” the next big thing. Many simply want to
“b” more effective. Whatever you want to “b”, you can realize your vision
through b|media.”
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1b. What’s up with Learning Insights lately?
From: Name withheld upon request.
To:
Subject:
Date: Fri, 17 Oct 2003 11:33:24 -0500

Ron,

Please keep my name and all other information confidential. Have you
reported on anything related to Learning Insights lately?
_____________________
1c. Identity Theft
Subject: Identity Theft
Date: Fri, 17 Oct 2003 14:34:34 -0500
From: Name withheld upon request.
To:

Ron I am sending this again with a couple small corrections for clarity.

If you print, anonymous please

Ron,

I am glad that Dave Putnam has brought up identity theft, but with all
respect to Dave, I have to wonder what his or anyone s protection against
identity theft really provides. How can he protect his customers from
having their identity stolen? It sounds like he is selling legal plans that
will provide you a lawyer if your identity *is* stolen. If that is the
case, the service should be renamed to legal plans that will provide you a
lawyer if your identity is stolen.

To me, those plans are like HMOs–you follow their rules. In a time a
crisis, why be restricted by a legal plan when you can go find the right
lawyer for the job (if a lawyer is even needed). From my research, I found
once your identity is taken, the credit reporting companies can lock down
your account, letting credit providers know your identity has been taken.
You re not responsible for the theft, however, your credit is flagged and
it will become difficult to conduct business relying on information from
the credit reporting agencies. People don t easily issue credit to accounts
marked with an identity theft alert. The damage is done, you re going to
spend a lot of time of the telephone, and everyone will tell you that you
should have protected your personal information.

What is needed is a way to stop identity theft from happening. However, we
are at the mercy of others who require us to give them our personal
information and then fail to protect it. This is what I have found with the
College of DuPage. At the College of DuPage, they use your personal
information, especially your social security number, everywhere. They
throwaway printouts with your social security number and personal
information in the trash with other students information, and when you are
in line, such as the testing center line, you are asked for your personal
information orally. One day, while waiting in line at the testing center, I
was about to start writing down student names and social security numbers
and collect information from the trash to prove to the school that personal
information needs to handled better. However, I figured this might put me
in trouble, so I elected to write the school a letter and ask how they
protect my information and who has access to it. That was two years ago,
and I still haven t heard back.

Unfortunately, identity theft is an easy crime that pays the criminal well.
Some changes are happening. As a pilot, until recently, my license number
was my social security number, further putting me at risk each time I am
forced to provide someone with my pilot certificate number. Much like the
pressure put on the FAA that forced them to start issue their own unique
numbers, pressure needs to be put on the smaller organizations, such as
educational institutions, to move away from the social security number as a
means of general identification.
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1d. Tony Caputo: more on NowComics
From: “Tony C. Caputo”
To:
Subject: Thanks!
Date: Fri, 17 Oct 2003 10:53:07 -0500

Dear Ron:

Thanks for running that note I sent you, but I didn’t realize that you’d
run it on your newsletter, I was just curious to get your opinion. If you
could run this one, it may shed more light on the concept and answer some
questions.

A high-level history of the company is on the website:
www.nowcomics.com/history.asp. I have a detailed business plan and
the first product is shipping at the end of this month.

The reason for a re-launch of a decade own company centers around a few
important points:

1) NOW Comics published 95% licensed properties, such as MR. T & THE
FORCE, SPEED RACER, ASTRO BOY, THE TERMINATOR, THE REAL GHOSTBUSTERS,
FRIGHT NIGHT, GHOSTBUSTERS II, MARRIED…WITH CHILDREN, TWILIGHT ZONE,
BARON MUNCHAUSEN, and THE GREEN HORNET. These are characters that are still
alive and well in other media.

2) From 1988 through 1990, NOW was publishing an average of 12
monthly titles. We shipped 1.1 million copies out the last Friday of every
month (three semi-trucks full). We have literally millions of fans.

3) My two related books HOW TO SELF PUBLISH YOUR OWN COMIC BOOK
(1997, Watson-Guptill), which has become an industry bible, and VISUAL
STORYTELLING: THE ART AND TECHNIQUE (2003, Watson-Guptill
www.visualstorytelling.com) have given me accessibility with old and
new fans and added credibility.

4) I discovered it was simple to reconnect with old creators and
licensors who still remember the quality of NOW titles and respect my 20
years in the business.

I’ve helped three other entrepreneurs with their technology/Internet
ventures since I left NOW Entertainment in 1994, so I’ve actually
accumulated more experience and knowledge. I billed 2400 hours last year as
an IT consultant (since 2000), for a firm in Oakbrook, so I can use some help!

Thanks,
Tony
————————-
Tony C. Caputo

My New Books:

www.visualstorytelling.com (Watson-Guptill)
www.buildyourownserver.com (McGraw-Hill/Osborne)
_________________
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END OF REPORT.