Global CIO: Dell-Perot Cashouts And The Media's 'Windfall' Idiocy - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
9/21/2009
08:19 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: Dell-Perot Cashouts And The Media's 'Windfall' Idiocy

Ross Perot started Perot Systems 21 years ago with his own name, his own money, and his own ambition. So why are media ninnies calling his take from the Dell deal a "windfall"?

After Dell offered early yesterday to acquire Perot Systems, a supposedly sophisticated financial news service pumped out this headline: "Perot Windfall From Dell Deal May Reach $400 Million."

Windfall?

Twenty-one years ago, Ross Perot launched a startup company bearing his own name, funded with his own money, and inspired by his own ideas and leadership. He hopped aboard that callow startup and charged it straight into the teeth of huge, sophisticated, and deeply entrenched competitors such as EDS (which he also started, back in 1962), IBM and others. He asked no quarter and, to be sure, he gave none. He believed his new company could connect with customers and prosper via hard work, fresh ideas, and a commitment to excellence.

Yesterday, Perot Systems agreed to be acquired by Dell Computer for $3.9 billion to help Dell expand beyond hardware and into the higher-value services market wherein Perot Systems had built itself into a $2.6 billion player. At the price of $30 per share offered by Dell, the Perot family's direct and indirect holdings will be worth $952 million.

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Ross Perot's serial entrepreneurship and his creation of two large and powerful companies in a wickedly competitive business are expressions of some of the best free-market qualities this country possesses: entrepreneurship, bold risk-taking, and a passionate commitment to excellence and innovation. That spirit has helped make the United States the strongest and most-generous nation on Earth, and although we're in the midst of temporary downturn, that same entrepreneurial spirit should be celebrated as a core element in helping create the global economy that has raised the standard of living for hundreds of millions of people across the globe.

Windfall?

I have no idea if Ross Perot thought of any of those outcomes when he started Perot Systems. But it's beyond question that he thought a very great deal about creating jobs—lots and lots of jobs—and prosperity—lots and lots of prosperity—for the people who would agree to join him on that adventure, and who agreed to throw themselves into their work at Perot Systems and defy the odds of having a startup company not just survive in the midst of giants like EDS and IBM and ACS and HCL, but to prosper quite nicely.

In doing so, Ross Perot and his team created tens of thousands of jobs—and if at one time not so many years ago we all thought of a job as something of a commodity, today's global recession has no doubt reshaped our perceptions of just how precious and valuable solid employment truly is. He created wealth for many thousands of associates—and for himself, no question about it—based on the risk he'd taken back in 1988 and the capital he risked and the commitment he made to creating something out of nothing.

And that's why, in spite of the media's regular ability to undercut our already humble expectations, I got quite a jolt out of this headline from Bloomberg.com: "Perot Windfall From Dell Deal May Reach $400 Million." What in the wide wide world of common sense was that writer possibly thinking?

Webster's New 20th Century Dictionary defines "windfall" this way: "an unexpected legacy or any unexpected piece of good fortune." The clear implication from Bloomberg is that Ross Perot and his family didn't go out and earn that $400 million, that they should somehow be less than fully entitled to it, that it was not honestly and industriously earned.

Seems like a rather naked attempt by Bloomberg to stir up some class envy, a loathsome if not-uncommon tactic these days. The approach continued in the article itself, as the writer's opening sentence said the deal "stands to make the Perot family almost $400 richer." Richer? Why not keep the qualitative angle out of it and say "stands to make the Perot family almost $400 million?"

In the third sentence as well, the writer again uses the tactic of saying something that is technically accurate but contextually misleading: "The two blocks of stock together are valued at $952 million at the $30-a-share acquisition price, which is 68 percent more than the family’s $568 million stake on Sept. 18, before the deal was announced."

Yes, that's true--but as written, the sentence singles out the Perot family as if it received some special-treatment escalator clause that entitled it to 68-percent appreciation in 72 hours while everyone else made only pennies or perhaps even took a loss. Why not just say that the value of every single Perot share held by every single Perot stockholder block went up 68% because that's the premium Dell offered?

But the real sign of class envy is the use in the headline of "windfall." And there are two and only two alternatives for why Bloomberg used that specific and loaded word, and neither one reflects very well on that news service. Here are the choices:

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