Calling Michael Dell

Following my post yesterday, I called the Big Dell to inquire about cheap laptops. The call was somewhat askward, I think Michael expected me to say that CGI was for sale. You Texas bastard, you'll never gonna get me. So anyway. After the usual chit chat about the state of the industry and how we hope that our freaking customers will double their IT expenses for 2010, I went straight to the point.

I go, Michael, CGI doesn't mind continuing to purchase its laptops from you guys, but man you gotta work on the price. It's still awfully expensive for what you really get. I asked him to design the cheapest laptop model ever, I don't care about the specs, just bring the cost down. Dell goes, we're already making shitty products on the low-end, even the Chinese are impressed, I mean Roach dude, how low can I go?

I go, Michael, remember when you were living in your dorm building PC clones for your college buddies? He goes, sure I remember. I go, when you were a fucking student you could live with $50 a week, you'd buy Kraft Dinner at Wal-Mart and a can of Folger and you could sustain for a week. That's what I call lean. Today your grocery bill is runs what, probably in the 4-figure zone for a single week now? Not counting the booze. So you're a pretty fat bastard.

Michael, I said, you totally lost perspective of what cheap is, I guess you don't even know how to write the word anymore. Dell goes, but I have a team of cost specialists working full-time to find the cheapest components out there, I mean you can get a fucking Inspiron desktop for less than $400, what's the issue here?

I go, Michael, I'm talking to you as a friend, not a competitor. CGI is buying a freaking huge number of laptops from your company, and I need to bring this cost down by all mean. If I have to take a screwdriver myself and pop all the duplicate "Shift" keys from the keyboard to save $0.07 from each laptop purchase, I will do it. After all, who needs 2 Shift keys, do you know? And that NumLock key? Gone. Wi-Fi? Get rid of it, take $25 off. So this is what I'm talking about. Let me give you another idea. Have you ever thought of bringing EGA screens back? Call it a "classic" laptop, or whatever shitty name you like, but if you can shave $300 off the current preferred price you'll the man.

Dell goes, jee I've never thought of that, are you sure you want to go that low, I mean don't your employees will scream when they see this piece of crap on their desk? I go, sure they'll whine for a few days, they might even post their rants on the Web, but you know what? I don't give a damn. Profitable growth is about squeezing the lemon until subatomic particles of juice come out.

Dell was silent for a while, and then he said, sure we can do this. We might have to dig a local landfill for find some components, but if this is what CGI wants sure we'll do it for you. We should have lunch you and I some day you know? I see a good fit between CGI and Perot, maybe we should talk strategies over lunch ya know?

I then said to Dell that I was entering a tunnel and that my cell phone connection was bad, then I hung up. That always does the job.

On managing business units

A long long time ago, our fearless founder Serge had this noble vision that CGI business units should be managed in a very liberal way. Give them targets, and let them manage the "how". Business units work locally, so they know their battle ground very well. Plus, giving local managers more power to grow their business was a very strong trend in management book at the time. So Serge envisioned this very lean CGI headquarter, where the CEO would basically act as a coach to all business unit leaders.

I mean, dude, welcome to the real world. Even Serge gave up this romantic idea of self-managed business units and he hired me to bring order to chaos. Command doesn't work like a brotherhood of well-intentioned men, it takes a strong leader to say things and others just follow orders.

CGI Montreal has gained more power over its business units during the past few years, and my goal of 2010 is to increase that control even more. I have this chart in my office where I pin pictures of all the business unit VPs worldwide along with revenues and cost of operating, and frankly what I'm looking at is the largest collection of bozos ever assembled. They are all middle managers who worked long and hard to achieve VP status, but they are no leaders. What they are good at is following rules and orders, and those are the instruments of profitable growth.

Even Fidel who's a total communist prick understands this concept, probably more than today's business leaders. We are all created equal of course, but like the pig said some are more equals than others. Someone has to take charge, and most people are much more comfortable following a strict set of rules. Give them room to choose, and you're likely to end up with errors and this will show on your next quarterly results. You can't trust your trusted lieutenants, I'm telling you.

Let me give you an example. CGI employees may use a laptop depending on their project and the business unit to which their payroll comes from. Some BUs don't have this program, some BUs have some kind of program. Some BUs do not charge employees for using a laptop, and some of them do (this is brilliant by the way, you must use a fucking laptop for your job and we make you pay for it!). Some BUs offer 2 or 3 different laptop models, some of them just offer one.

This is where the CEO comes in and say: this had got to stop. Variety breeds costs. My plan is for all BUs to charge employees for using a laptop, because we all know employees use their laptop at home to surf the net and mostly download movies. So it's morally okay to ask employee for money, and this improves the bottom line.

As for the laptop model, I'm planning to call Michael Dell personally today. I'll let you know about it.

Do not daytrade GIB

When I was a teenager living in Pembroke Ontario, life was much simpler. I was the head of the Young Visicalc Club, a non profit organization aimed at teaching the wonders of this new thing called a spreadsheet. Yes dear members, that was before Excel, that was before 1-2-3. Life did exist before the Internet. While some of my friends were launching Estes rockets and some others were learning to play the Stratocaster, I was at aw with the power of the TRS-80 Model III. I was consumed with the desire to use this new spreadsheet tool, and I could foresee a not so distant future where an entire corporation could be numbers-driven to profitable growth.

I did of course some stock market research and investing at a pace that was in tune with the era. Those were the golden Louis Rukeyser days. Men were real men and they wore 3-piece suits even on week-ends.

Nowadays I feel like I’m totally disconnected with the world, or maybe it is the world that is disconnected with the reality. CBNC announces a breaking news every 5 minutes, and it is usually a pointless press release or a 0.05% share price drop from a low-volume stock. I was a teenager back again, I’d feel obligated to post every thought that crosses my mind on Facebook.

This is why my friends CGI does not issue mindless press releases 5 times a day, and this is why - even if you're a shareholder - you should not daytrade our public stock. GIB is like slow cooking, it is a long term value that keeps on growing if you are patient. Truth is, I don’t check the stock price 25 times a day because daytrading GIB is verboten in the C-suite. What I check though every 15 minutes is our revenue stream, where it is coming from, why some business unit is having a bad week, how many traitors left for a competitor.

If you want to daytrade a stock, why don't you pick a company whose products loose value every day, like Dell. Makes sense, doesn't it?

Dude, you’re getting a Perot…I mean a Dell

I love hitting on this nail as I think this merger is something that eventually will kill Dell but save their shareholders. Twenty years from now - assuming Dell will still be a brand name which I doubt – people will associate this company with IT services, not crappy netbooks or PCs whose name sounds like a villain from a bad sci-fi movie. In the end, I believe people will stick with the Perot name and the Dell particle will be dropped out. Or rather ejected.

Perot consultants are now told to promote Dell hardware because their earnings dropped 54% and my sources say Michael is going ballistic over the abysmal sales figures. And things won’t get any better for Dell in 2010.

Picture above was taken during an IT conference in Texas where Perot was sponsoring the event. I’m being told the poor Perot guy was promoting the Optiplex line of desktop, he must have felt like a total douche doing this. Why the hell am I doing this? Are the folks at EDS forced into similar humiliation? Do they have to dress in a 12-C outfit? Can I go work now?

Note to the Perot guy in the silly outfit: Dude, if you still care about your dignity, send me your resume. We’ll treat you right. Selling PCs is not a secret agenda at CGI.

Black Friday special at CGI

This Friday only, get a 2% discount on a senior project manager, 5% on any business analyst, account manager, QA testers or technical analysts, and a whopping 10% on anyone that is currently rotting on the bench.

Picture above was taken at the CGI headquarter on Sherbrooke last night when news of this discount was leaked on a blog. Some people were just plain nuts, they were expecting a CGI person to go troubleshooting their virus-ridden PC at home, like we were some kind of Geek Squad or something. We used a fire hose to cool down the crowd.

To benefit from this very special and one time discount you need to sign (or renew) a 3-year contract with CGI Group and clear any competing firm from your organization, especially the temple merchants from Dell/Perot or the folks from the Blue Man group. This special cancels any other discount you may have been promised by rogue account managers. Void in certain states/provinces. Restrictions may apply on certain projects where money is no object.

I’m feeling generous, this does not happen very often. Act before the effect subsides.

Reader's Column Day

Your dedicated CEO is listening again to you today, let’s take a call from Roberto:

I’m a junior Java developer and I work at the CGI office. The company is blocking all access to Facebook and MySpace, how am I supposed to do my work if CGI is blocking communication to the outside world?

Let’s do some profiling on Roberto. This is the kind of Gen-Y slacker who posts what he had for breakfast on Facebook, in addition to what kind of socks he’s wearing (let me guess: white), how he feels about the world at any particular moment (meaning, whining about events outside his control), and what score he just achieved at Bejeweled.

If your local CGI office blocks Facebook, it’s probably because you spend too much time posting rants about your lasting acne problems and you’re not delivering any decent code for your customer. Here’s my advice to you: remove the RJ-45 cable from your PC and try doing work – any work – without Internet access.

The first day will be awful, you will experience full blown hallucinations due to withdrawal. Like seeing Pauline Marois in a sexy nurse outfit. Or Michael Dell announcing that he wants to buy CGI. That kind of really scary thing.

Jee, I just scared myself with the last one.

The next day you will able not to launch MSN when you get to work. You may even be able to use other mean of communication, like a phone, to get in touch with someone. Yeah, like talking. Sounds old school, isn’t it?

By the end of the week you will realize that all you can do with a computer is actually work, meaning producing deliverables for which a client is willing to pay. You may realize that Facebook is just a way to channel your inner frustrations and it leads to nothing but more frustrations because no one really cares that you had Christmas-theme Rice Krispies this morning.

Face it boy, the world is a harsh place and self-interest drives this place. Now get back to work.

What a surprise, Dell earnings down 54%

Really, no one saw that coming. Even me. Revenue was down 15 percent over the last year, and profits fell 54 percent. They blame weak pre-order demand for Windows 7 machine, which is typical of the denial phase when your business is going down. What does Michael think about this?

Founder and CEO Michael Dell said he expects companies to begin to order new PCs as part of the so-called "refresh" cycle starting early next year. "With an aging install base ... an accumulation of new technologies with hardware, software, virtualized clients...IT managers know they can't extend these assets forever," Dell said. "I think it will be a refresh that occurs over perhaps 18 months. I can't remember a time when a high percentage of (IT managers) skipped an entire operating system."

I agree, even we at CGI skipped over the Vista ditch, we’re still running XP with Explorer 6 and although it’s far from being perfect it works okay. Here’s the problem, you entire hardware business depends on how bad Microsoft screwed up with their aging Windows code. PCs are commodities, it doesn’t matter if you buy a Toshiba or an HP laptop anymore. It’s all the same shit.

Michael, if you were a smart man you would sell all your PC business to some nameless Chinese company, admit that Christmas is over, and focus exclusively on Perot, because that’s where the money is. Even IBM who is not the sharpest knife in the drawer understood that a long time ago, but you’re still fighting a war that is basically over. Michael, take a word of advice from that final scene in Chinatown

Jake Gittes: Why are you doing it? How much better can you eat? What could you buy that you can't already afford?

Noah Cross: The future, Mr. Gitts! The future.

Yes, the future. We at CGI understand this very well, IT service is where the future is, nobody cares about nuts and bolts anymore.

CGI is not for sale

When you’re a teenager girl and no one asks you out, either two things. Your physical appearance puts you in the Susan Boyle class and most people would guess that you live with approximately 12 cats, or you’re a total knockout and no one dare to ask you out because they know you’ll turn them down just by the way you grin.

In one very good interview I gave to the Financial Post recently, I said that CGI has never been approached for a merger because everyone knows we’re not for sale. I like to think that our more of the same (MoTS) strategy will ultimately deliver more value to the shareholder (me in particular) and we can grow this thing slowly without taking unnecessary risks.

I don’t want to be in a position where I have to sell knickknacks like Perot has to do now. Now that those guys report to a hardware outlet, guess what happens when Perot consultants do let’s say a strategic plan to overhaul your infrastructure. You’re right, they’ll want to shove a truckload of blade servers up your butt so that the local VP from Dell get a huge fucking bonus this year. Everyone has an agenda. Same thing with IBM, their codernauts want to lock you in a long-term mainframe service plan along with their biased consulting expertise.

You can’t be all things to all people and pretend you have your customer interests at heart.

Of course what I don’t say is that a merger would put me in a position where I would have to report to someone, and when you’re a CEO this is like a total demotion. We all have egos, don’t we? I would rather retire, go back to Pembroke and grow a subsidized product like pigs or corn.

But I have to admit, I’d like to have offers on the table for CGI. Just for the pleasure of being considered and then politely say no. Or yes. But no one calls. Is it because we’re so heavily in the Canadian market which is considered a niche from the U.S. perspective, or is it because we’re a prized jewel whose value puts us above the rest? I’d like to think the latter, but I have my share of doubts like everyone else.

One less competitor?

Says here that I told the press that Dell buying Perot was a good thing because it eliminates a competitor. Serge kindly reminded me after the event that our competitor still exists, Dell will not convert Perot into a laptop manufacturing business. Oops. Maybe I got too carried away. I mean, I hope the Dell/Perot alliance will bear as much fruits as AOL/Time Warner and General Motors/Saab if you know what I mean.

Great, Dell is now a competitor

The world has gone upside down, I'm telling ya. This kid from Texas who built cheap PCs in his dorm room has bought Perot Systems for $3.9 billion.

Earlier I said that CGI could buy something in the range of 1 to 2 billion, and I was hoping those guys at Perot would give me a discount cause I knew they were selling. No, man, they preferred to sell to another Texan, I take no offence and it makes perfect sense. But next time Michael and I have a discussion about renewing our contract to buy laptops for all our BUs, I will tell him that his freaking Latitude model is so heavy that my back hurts. And I will ask Serge to teach me to swear in French Canadian, that will impress Mr. Dell. Tabarnac. I will even go ballistic and threaten him to switch to Apple, that should scare the bejesus out of him.