Will Panasonic and Sanyo Gain at Sony’s Expense?

As the recall of Sony notebook PC batteries spreads, encompassing more PC vendors and an increasing number of affected models, one wonders how seriously the Sony brand and its business as a battery purveyor will suffer.

MarketWatch’s Andrew Simons considers the question, poses it to a few analysts, and comes away with an ambiguous picture.

Roger Kay, president of market-research firm Endpoint Technologies Associates, believes Sony is in danger of losing considerable patronage in the lithium-ion battery business. Says Kay:

Sony’s brand is severely damaged. I think it’s going to be a question whether they can be in the battery business at all.

Still, he doesn’t think Sony’s is about to get whacked overnight. Says he:

Given the nature of the relationship, in the real world the way that it plays out is that the [computer manufacturers] decrease what they buy from Sony. They’ll say, ‘We used to take two million from you and three million from Sanyo. Now we’re going to take four million from Sanyo and one million from you. And that’s punishment’."

Indeed. One can understand why notebook vendors would want to punish Sony, too, not just for selling defective battery technology, but also for occasioning the logistical nightmare of a major recall program.

Even so, switching battery-technology suppliers is not like changing socks, as Eric Ross, an analyst with ThinkEquity Partners, explains:

They could choose another battery supplier, but Sony is a huge supplier. They screwed up, but they didn’t screw up royally. Switching battery suppliers takes time.

He’s right. It does take time, and it isn’t a decision that should be made in anger. I think, though, that it’s debatable as to whether Sony merely "screwed up" or "screwed up royally." I’m not sure the notebook PC vendors will be able to make such a fine distinction.

At the end of the day, the scenario Kay envisions, with manufacturers gradually and methodically shifting their business to other vendors, including Panasonic and Sanyo, is a likely outcome. They won’t be taking this decision as a reprisal or to exact vengeance; instead, they’ll be doing it to mitigate risk and to protect their interests, including their own brands.

It won’t be personal. It’ll be strictly a business decision. 

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HP Buys Into Gaming PCs

Shortly after its CEO Mark Hurd and former chairman Patricia Dunn were castigated and reproached at length by a House of Representatives subcommittee, Hewlett-Packard announced Thursday that it had acquired VoodooPC, a high-end gaming PC vendor. Terms of the deal were not disclosed.

HP’s move follows a few months behind Dell’s acquisition of Alienware, another vendor in the fast-growing gaming-PC market.

Unlike Dell, HP will take a different tack in its post-acquisition integration of VoodooPC into its corporate fold. Whereas Dell has left Alienware as a wholly separate operating division — even continuing to sell its pre-existing XPS line of gaming PCs — HP will take something of a hybrid approach, keeping the VoodooPC brand and allowing the company to remain based in Calgary, Alberta, but also integrating VoodooPC into a separate business unit, focused on the gaming industry, within its personal systems group.

VoodooPC co-owner Rahul Sood will become chief technologist for the HP Gaming unit, and his brother and co-owner Ravi Sood will become the division’s director of strategy. Both will report to Phil McKinney, chief technology officer for HP’s PC business.

The intent of the integration plan is to allow HP to benefit from direct exposure to the demanding requirements of gaming enthusiasts, who typically don’t mind paying a small fortune for their machines, so that leading-edge innovations for gaming platforms can be incorporate into mainstream PCs. Additionally, VoodooPC will benefit from access to HP’s research-and-development programs as well as from the larger company’s established relationships with component suppliers.

Obviously, HP won’t object to the higher margins that accrue from sales of gaming systems.

Even though VoodooPC’s sold approximately 4,000 units in the past year compared to HP’s PC shipments of more than 30 million units, HP’s McKinney said various estimates suggest the game-PC market is worth $3 billion to $5 billion per year. It’s clear that HP is motivated by the growth and high-end cache of the space, not to mention a competitive imperative to counter Dell’s move into the market.

It remains to be seen whether HP or Dell has taken the better approach with regard to integrating (or not integrating) its gaming-PC acquisition.

There’s less risk involved with the Dell approach, but there also are fewer spin-off benefits to be had. HP is taking a more complicated, ambitious approach, one that is fraught with integration risks — there’s a real danger that VoodooPC could be utterly subsumed and diluted — but might pay off enormously if HP’s vision comes to fruition.

The Strange Story of Liberate Technologies

Some of you might recollect, as I do, the prior incarnation of Liberate Technologies, when it was a vendor of software for digital cable-television systems, including set-top boxes.

As this cached SEC filing attests, Liberate essentially wound up that business last  year when it sold its North American assets to Double C Technologies, LLC, a joint venture majority owned and controlled by Comcast Corporation with a minority investment by Cox Communications, Inc. That asset sale closed in April of last year, with Liberate receiving approximately $82 million in cash.

Subsequently, Liberate sold the remainder of its business assets to SeaChange International, Inc. That left Liberate with no product- or service-related business to operate on an ongoing basis. As Liberate put it in its Form 10K issued on August 15, 2005:

We will continue to operate Liberate to resolve existing liabilities, prosecute and defend pending litigation and pursue other claims as appropriate that we may have against third parties, and dispose of non-operating assets to maximize shareholder interest. Although our board of directors has not yet made any determination, we also will continue from time to time to evaluate and potentially explore all available alternatives including a dissolution and liquidation of Liberate, a share repurchase, an extraordinary dividend or other transactions to maximize stockholder value. We believe that our cash, together with the proceeds from Asset Sales, will be sufficient to meet our working capital requirements for the next twelve months. In fiscal 2006, we expect to continue to use net cash to fund our operating activities.

Apparently, Liberate Technologies has found a business it would like to enter. You’re probably thinking it’s a technology business, somewhat related to the markets and technologies in which the company had been involved previously. Well, you’d be wrong.

Instead, Liberate Technologies announced today that it has offered to pay $21 per share for medium-haul trucking company USA Truck Inc., which apparently has declined the proposal.

As a result, Liberate’s CEO, Paul Vachon, has gone to the extraordinary lengths of publishing an open letter, addressed to Jerry D. Orler, USA Truck’s president, in the guise of a press release. You have to read it to believe it. Basically, Liberate wants to take USA Truck private, and it’s willing pay a decent premium to do so.

How many other failed technology firms, literally shells of their former selves, will take this route? Are we about to witness a trucking bubble paralleling the technology bubble of a few years back?

I’m being facetious, of course, but I think it’s fascinating that a former technology company is attempting to remake itself as a acquirer of decidedly old-school companies in industries such as commercial transport.

For those of who hadn’t noticed, or who are in a persistent state of obdurate denial, this is just another data point emphatically stating that we aren’t in the late 90s anymore.

Bechtolsheim Leaving Sun for Startup?

Rumors are intensifying that Andy (Andreas) Bechtolsheim, co-founder of Sun Microsystems and a certified serial entrepreneur, will leave Sun for the second time in his career to join and lead a startup company.

Bechtolsheim first defected in 1995 when he founded gigabit-Ethernet switch vendor Granite Systems, which was acquired by Cisco the following year for $220 million. A savvy investor as well as a brilliant technologist, Bechtolsheim was said to have owned 65 percent of Granite at the time of the transaction. He also made an early investment in Google, which proved to be a particularly sagacious move.

His circuitous route back to Sun began when he left his role as vice president and general manager of Cisco’s Gigabit Systems Business Unit to launching Kealia, Inc., a vendor of high-performance Opteron-based servers.

Sun acquired Kealia in a stock-for-stock transaction in early 2004, with Bechtolsheim and his 58 Kealia engineers becoming  the Advanced Systems Technology Group within Sun’s Volume Systems Products unit. There’s no doubt the Kealia and its technology played an integral role in reversing Sun’s flagging fortunes in the volume server market.

It’s not clear at this point whether Bechtolsheim’s latest active entrepreneurial vehicle is Cresta Technology, a stealthy wireless-chip company based in Los Altos. Until now, Bechtolsheim has been a “passive investor” in that enterprise, but, as the playwright David Mamet wrote, things change.

Whether he’s moving fulltime to Cresta or to another venture, the word is that he’s decamping from Sun, which cannot be auspicious news for a vendor that still needs as much positive reinforcement as it can get.

Lifestyle MVNOs: More Bust Than Boom

When the acronym MVNO was first explained to me several years ago, I was skeptical that such a business model could work over the long haul.

I grant that there’s a certain plausibility to the concept of lifestyle-oriented mobile virtual network operators. Still, practice often diverges from theory, and the devil, as the saying goes, is in the details.

The MVNO game, to my mind, seemed like a pure reseller arrangement, whereby a lifestyle company — Virgin, MTV, or ESPN, for instance — slaps its brand on an existing wireless-operator’s services, leveraging its network infrastructure, while defraying the mobile carrier of operational costs relating to billing, marketing, sales, and support.

I can see the appeal for the wireless operators, which often do not have the marketing acumen to address relatively untapped demographic market segments, but I wondered how much control or game-changing value the MVNO could realistically deliver to differentiate its service from the wireless operator, which — at the end of the day — still overwhelmingly controls much of what subscribers will experience. 

In the case of Mobile ESPN, which functioned as a wholesaler for Sprint Nextel Corp., the MVNO model apparently did not deliver the goods. Launched earlier this year, Mobile ESPN will fold its tent and close shop at the end of this year.

ESPN’s parent company, Walt Disney & Co.,  had been under mounting pressure to pull the plug on its sports-oriented MVNO operation, which an analyst at Merrill Lynch claimed would lose $80 million and attract just 30,000 subscribers by the end of his year.

I understand that the failed ESPN MVNO experiment is just one data point, but I haven’t seen compelling evidence to suggest that the MVNO model serves the interests of the brand that resells the services as much as it does the interests of wireless operators.

As a rule, there are more productive ways, offering more compelling ROI, to enhance an established lifestyle brand than entering the MVNO space.

HP’s Omerta?

According to several news reports that surfaced this morning, including one from CNET’s News.com, Hewlett-Packard General Counsel Ann Baskins has resigned her position with the company, effectively immediately.

The timing is uncanny, because Baskins, through her lawyers, also announced that she will not  testify today before a U.S. House of Representatives subcommittee that is investigating HP’s bizarre and potentially illegal probe into leaks from its board of directors to journalists.

Baskins, again through her legal representatives, said she had every intention of testifying at the subcommittee hearing, but that she was advised to invoke her constitutional right to remain silent.

As reported in today’s edition of the Wall Street Journal, Ms. Baskins’s lawyers, K. Lee Blalack at O’Melveny & Myers and Cristina Arguedas of Arguedas, Cassman & Headley in Berkeley, Calif., issued the following statement:

Please understand, however, that Ms. Baskins very much wants to testify and discuss these matters with the Subcommittee. Were she to do so, we are firmly convinced that the Subcommittee would recognize that she acted legally and ethically at all times. Given the current environment, however, Ms. Baskins simply has no choice.

Yes, that last sentence, particularly the reference to the "current environment," puzzles me, too.

The "current environment" includes a separation agreement between Baskins and Hewlett-Packard. In exchange for her agreement to aid HP with its investigation into the board leaks and to refrain from suing the company, Baskins will be indemnified by HP, which will also pay her legal expenses.

What’s more, Baskins retains rights to exercise vested stock options, valued at nearly $3.7 million as of Sept. 27. HP also has agreed to accelerate the vesting of other options so that the "aggregate intrinsic value" of the unvested options equals $1 million on November 20.

It’s no wonder Baskins has declined to provide testimony today to the House subcommittee. It clearly is not in her interest to talk.

Return of the Apple iPhone Rumors

I suppose it’s possible that Apple could be working with Cingular on a mobile phone sold exclusively by the latter. Almost anything is possible.

It isn’t probable, however, and David Pogue does a commendable job explaining why on his New York Times blog. As Pogue opines:

The problem is that when you build a cellphone, the carriers (Verizon, Cingular, etc.) have veto power over EVERY move you make. You have to fight, wheedle, cajole, beg, demo, refine, lather, rinse, repeat…all in hopes that the carriers will accept your design–and stock your phone.

I cannot imagine Apple giving veto power to ANYONE over its software design. It just ain’t gonna happen.

Pogue’s reasoning is sound.

It’s unlikely that Apple would be able to make the endless design compromises and business accommodations that are conceded on a regular basis by mobile-phone market leaders such as Nokia and Motorola. Those companies, too, would enthusiastically embrace more creative freedom, and more business latitude, in their relationships with wireless operators, but they know such a favorable state of affairs is unlikely to materialize.

In the world as we find it today, wireless operators control the relationship with the mobile-phone customer. Handset vendors are equipment suppliers, and their customers, unfortunately, are the wireless operators, not the ultimate consumers of their products. They’re at one remove from the customer.

Is that a situation that Apple would amenable? Even if did, is there any reasonable expectation that the bastardized and neutered products that eventually filtered through the process would meet the aesthetic and functional standards of Apple’s iPod and other products?

Don’t get excited about the prospect of an Apple iPhone. Even in the remote likelihood that it comes to pass, it won’t be up to Apple’s usual standards. Remember the ROKR? Well, you’d probably see an incremental improvement on something like that.

Perhaps it’s better than Apple stay away from the mobile-phone market, at least for now.

Breaking the DRM Stranglehold

Digital Rights Management (DRM) today doesn’t seem to be so much about protecting the integrity of creative content and other intellectually property as about enabling device and software vendors to lock customers into their products and brands.

Look no further than DRM as it applies to music and video. An article in InfoWorld today covers most of the relevant ground, noting that consumers ought to pay close attention to the topic because “nobody wants to build a library of favorite movies and songs, only to find that . . . switching to another computer or software makes it unusable.”

Indeed, that’s a fate I’d like to avoid, and one you’d doubtless like to escape, too. But how can you do it?

Unfortunately, you don’t have a lot of options today. In DRM as it applies to music, we have Apple’s Fairplay (which spans iPod and iTunes) and Microsoft’s Windows Media DRM. As these vendors would have it, their DRM systems are incompatible, meaning that consumers cannot play cannot Windows Media files on their iPods.

Video DRM, which applies to television programming and movies, is a work in progress. Perhaps something will develop to prevent Apple and Microsoft from applying their mutually exclusive DRM strangleholds on the burgeoning video realm.

One potential alternative comes from the Digital Living Network Alliance (DLNA) — whose membership roster includes Intel Corp., Sony Corp., Samsung Electronics Co. Ltd. and Lenovo Group Ltd, — which is working to define and promote an industry-standard DRM format. There also are moves afoot to produce open-source DRM mechanisms, and, of course, hackers continually seek ways to circumvent and thwart DRM technologies.

Interestingly, free-software exponents such as Richard M Stallman, who founded the Free Software movement and devised the original GNU public license, believe that open-source DRM would represent a bigger affront to freedom and liberty than proprietary DRM schemes.

In an article published earlier this year by UK-based The Register, Stallman opined:

If you think that the important thing is for the software to be powerful and reliable, you might think that applying the open-source development model to DRM software is a way to make DRM powerful and reliable. But as far as I’m concerned, that makes it worse — because it’s job is restricting you. And if it restricts you reliably, that means you’ve been thoroughly shafted.

Well, if you view the world through Stallman’s ideological prism, we’re all going to get shafted, because I don’t see the content kings retreating from their insistence on DRM. If we must have DRM — and it seems it’s an inevitability to which we must reconcile ourselves — then we need to have a DRM model that is flexible and allows for fair use and portability of content.

The existing DRM systems, whether proffered by Microsoft or by Apple, fail that test. Let’s hope, and push, for something better.

More Rumors Regarding F5 Networks; Is IBM Knocking?

There were rumors a month or so ago that EMC was making an acquisition bid for F5 Networks. So far, those rumors have come to nothing.

Now, however, and specifically within the last couple days, rumors are intensifying that IBM is making a move to acquire F5. According to the assumptions and reasoning behind the rumors, F5 is facing unprecedented competition in LAN and WAN application optimization from the likes of Cisco, Juniper, Citrix (which now is in league with Microsoft), and scores of smaller players, including the recently public Riverbed Technology Inc.

An additional factor, according to the scuttlebutt, is the continuing uncertainty regarding investigations into alleged improper accounting of stock-option backdating at F5. The company’s CEO John McAdam was involved with the sale of a previous company, Sequent Computer Systems, to IBM in 1999 during a scandal over alleged accounting irregularities.

Then again, F5 has benefited from a couple analyst upgrades recently, so the acquisition speculation could be nothing more than fevered conjecture.

F5 has rebuffed competitive incursions from major players, including Cisco, in the past, so there’s no reason to doubt that it couldn’t do so again, regardless of whether it remains independent or becomes subsumed within an industry giant such as IBM, whose own relationship with Cisco appears to increasingly complicated. 

CinemaNow Download-to-Burn Format Presages Video Future

BusinessWeek reports online today that CinemaNow will sell a $9.99 downloadable version of Universal Pictures’ new home video release "The Fast and the Furious: Tokyo Drift" that can be burned to a digital video disc and run on standard DVD players.

It marks the first time that a major studio will release a DVD in retail stores and on a download site at the same time. As for CinemaNow, it offers other movie releases in its download-to-burn format, and those sell approximately five times as much as download-to-rent and download-to-computer films.

From a product-management 101 standpoint, the move makes perfect sense. Giving customers flexibility and choice in how they access and play content — on their computer, a portable DVD player, a DVD player attached to their television sets, and so forth — unquestionably will prove popular with consumers, starting with a tech-savvy vanguard that has been campaigning for this sort of thing for some time.

It’s less clear, even now, whether the motion-picture industry sees the move as being in its immediate and narrowly defined interests. Typically, studios release movies as DVDs in retail stores first, then wait six weeks or more before making them available for download, and, even then, most downloads restrict the playback to PCs, preventing the use from burning a copy for use on a DVD or elsewhere.

The reasons have to do with the efficacy, from a revenue-generation standpoint, of existing distribution channels. According to PricewaterhouseCoopers, retailers sold about $18 billion worth of DVDs in 2005, compared with about $10 billion in box office revenues. While DVD sales have slipped in recent months, they still contribute a lot of money to studio coffers, and compromising that revenue base is not something Hollywood is inclined to do.

Yes, as the BusinessWeek article mentions, the application of copyright technology also has been a challenge, but it’s a secondary matter. If the business drivers were compelling to the movie industry, the technology challenges could be and would be rectified. Existing and emerging approaches could solve the problem. In this case, the old adage is true: Where there’s a will, there’s a way.

What’s really at issue is the reluctance of the motion-picture industry to alienate powerful channel partners, namely DVD retailers. It’s been a lucrative relationship, for all involved, and none of the principals wants to see it end prematurely.

This is a major dilemma for the movie industry, though, because there’s no question that leading-edge customer demand is pushing aggressively for online downloads with flexible copyright protections. For reasons having to do with the nature of the aesthetic qualities and appreciation of the product, I do not think the movie industry is facing the same wholesale technological disruption that was visited upon the music industry. Still, significant market pressure is being brought to bear.

As venture capital Roger McNamee has said:

Most major media companies define their technology strategy in terms of digital-rights management. Their view of the world is about controlling access to what they own. The next 10 years are about exactly the opposite. It’s about the creative people and their fans getting together. Whatever it is you like, it will be increasingly available. It’s time to give customers what they want.

It’s now our job and the industry’s job to actually do it. The old business models are brain-dead, and the body will die soon.

Therein lies the dilemma. The body might die, and might well be moribund, but the motion-picture industry wants to squeeze every last ounce of life from it before shifting to a new model, with new distribution channels. If it gets the timing wrong, one way or the other, it risks severe repercussions, the sort no public company wants to experience. 

Hurd Fails the Test; HP Scandal Not Over Yet

Well, Mark Hurd and the Hewlett-Packard braintrust finally demanded and received Patricia Dunn’s outright resignation from HP’s board of directors. She’s not just stepping down as chairman, she’s gone.

That’s as it should have been as soon as the dimensions of this risible corporate-espionage scandal first became known to Hurd and the other board members. It took them long enough to reach a conclusion that should have been obvious and irrefutable.

Instead, the HP board, led by Dunn but apparently supported by Hurd, stonewalled and resisted doing what it should have done, which was coming clean and admitting ultimate responsibility for the entire mess. For some bizarre and utterly inexplicable reason — but one that suggests an ethical turpitude that should appall HP’s employees and customers — they thought they could ride out the storm, pretend that nothing happened, and comport themselves as though they were responsible for none of what eventually came to light.

Well, guess what? Dunn and Hurd were wrong.

They’re not escaping from this debacle unscathed. Oh, they will try to plead ignorance, as Hurd did yesterday, saying he briefly attended a meeting at which discussion ensued regarding the first phase of HP’s misguided and wholly inappropriate investigation into board leaks of confidential information, but that he did not stay to hear anything about the conduct of the probe that was ethically or legally objectionable.

Similarly, he claimed that he was sent, but did not read,  an email message — he cannot deny that the message was sent to him, because, one presumes, it has been unearthed in one of many criminal investigations by government agencies into the legality (or lack thereof) of HP’s probe of its leaky board — regarding the ethically dubious tactics and allegedly illegal conduct of the second stage of HP’s board investigation earlier this year. It’s convenient that he didn’t read it; if he did, and he failed to do anything to quash the probe or notify the proper authorities of potential violations of the law, then his job as CEO would be hanging from the most tenuous of threads at this moment.

When claiming ignorance doesn’t work, though, HP senior officers have demonstrated that they’re extremely adept at throwing subordinates under the bus. Apparently, in a leak that presumably was approved by Hurd and Dunn, it was let slip yesterday that two senior HP employees, both of whom were involved in the investigation into board leaks, are in the process of leaving the company, and apparently not of their own volition.

For her part, Dunn explicitly blamed her minions for her downfall, saying that they conducted the investigation in a manner that she did not approve or know anything about. Some of the evidence, though, seems to suggest otherwise.

This entire board deserves to go — and not to anywhere salubrious. It has failed HP shareholders, employees, and customers. It was and is a disgrace to corporate governance.

This board now has made Mark Hurd its chairman, assuming that an autocratic carpet sweep can allow the company to put this unfortunate episode behind it and permit the focus to return to operations, products, revenue, and profits. Governance experts, however, take issue with that decision, saying the timing is poor (everybody on the board and at the most senior executive positions at HP is under a cloud of suspicion, if not under criminal investigation), and that it suggests HP has learned nothing from the ordeal.

Moreover, what can be said of the formerly irreproachable Mark Hurd? If we believe his statements yesterday about his own negligent oversight of the investigation and its aftermath, he is at best inept.

If he was sent an email regarding something as important as an investigation that he encouraged and demanded regarding board leaks to the media, then it stands to reason that he should have read it, doesn’t it? If he didn’t read it, what does that say about his attention to detail and his work ethic? If he did read it — and if evidence comes forward proving that he did so — then he’s a goner, just like Dunn.

The goal of yesterday’s press conference, it seems, was for HP to belatedly become proactive in addressing the scandal. The company wanted to offer a few sacrifices to appease its critics and burnish its tarnished brand. It also wanted to preclude further embarrassments.

I think it failed. Mark Hurd’s apology seemed forced, insincere, and entirely scripted, and his claims that he didn’t know what was happening and failed to read critical correspondence do not reflect well on him, irrespective of whether you believe him. In fact, HP’s apology, as Charles Cooper of CNET’s News.com wrote, was lame, raising more questions than answers and causing many of us to further lower our estimation of HP’s board and its C-level executives.

Yesterday, California attorney general Bill Lockyer stated that his investigation so far had not produced evidence that Mark Hurd had committed a criminal offense. Still, a spokesman for Lockyer asserted that the investigation wasn’t complete and that nobody was out of the woods yet.

But, make no mistake, the woods are burning. Getting out won’t be as easy as was assumed.

Bad News Looms: HP Press Conference at 4:05pm ET

Mark Hurd, Hewlett Packard’s CEO and presumptive board chairman, will preside over a press conference today at 4:05pm ET. Yes, that’s after the close of trading . . . on a Friday.

Professional practitioners of public and investor relations prefer to release bad news, when the release of such news is unavoidable, after the close of trading on Friday. It gives market makers a few days to digest the news and vitiates the inevitable impact on the company brand and the share price.

So, we know bad news is coming from HP. Now, the question is, how bad will the news be?

I don’t think we’ll see the resignation of Mark Hurd, not yet, anyway.

Still, the deepening corporate-espionage scandal at HP — which saw the company employ a mix of KGB and Nixonesque tactics against board members, its own employees, and journalists, all in a misdirected bid to uncover board-level leaks to the press — will claim some well-coiffed scalps at Hewlett Packard before it is over. Some sacrifices, in fact, are likely to be made today on the altar of corporation expiation. The goal will be to mollify corporate-governance critics, to burnish a tarnished (and once shiny) corporate image, and to stop the sudden (as of yesterday) hemorrhaging of HP’s stock price, which had performed exceptionally well under the stewardship of Mark Hurd until now.

I think HP should completely reconfigure and repopulate its bunker-mentality board of directors. If the wholesale resignations of the entire board aren’t part of tonight’s announcement, HP will have failed to do what’s right, yet again. Patricia Dunn, in particular, should never attend another HP board meeting. The damage she has done to the company’s image is incalculable, and it’s shocking that Hurd, and many others within HP, has taken so long to recognize that fact. Maybe, as recent evidence suggests, they are more closely intertwined in this scandal than initial indications led us to believe.

HP also should dismiss its general counsel, Ann Baskins, who appears to have been far too close to the investigative shenanigans for anybody’s comfort. Maybe some of HP’s security honchos should get the boot, too. As I said at the beginning, folks, this is a serious matter, and I’m somewhat surprised that it took the market so long to figure that out.

A few good recent articles on the unfolding scandal have been provided by Reuters, which wondered whether Mark Hurd will face increasing pressure to resign; by Thomas Kostigen, at MarketWatch, who wonders whether all the trendy talk about business and corporate ethics is just a load of eyewash; and by Business Week, which examines a pervasive culture of fear and suspicion that seems to have enveloped HP late in Carly Fiorina’s reign and has gotten worse subsequent to Hurd’s ascension.

A pet peeve of mine is business journalism that attributes far too much brilliance, expertise, knowledge, sagacity, and importance to the man or woman who inhabits the CEO position. Yes, it’s a an important job, but nobody is indispensable. Not Mark Hurd, not anybody. HP had good and bad years, good and bad experiences, before Mark Hurd, and they’ll do likewise long after he leaves the building, regardless of whether he’s pushed out imminently or whether he leaves years from now.

Finally, as the Associated Press’ Brian Bergstein wrote a couple days ago, HP’s unhealthy paranoia has taken it into the realm of the disturbingly bizarre. HP employees must be ashamed and embarrassed at what their supposed corporate superiors have done to their company in the name of confidentiality.