A knight’s tale

In moments of great danger you hope and pray that a white knight will come to rescue you. But when you’re the white knight, who’s left to come galloping in and save the day?

Apparently, no one: earlier this week Vancouver-based White Knight Distributing, officially shut down with a brief message on its Web site. The company is “closing the door forever,” it says. “We (would) like to thank all our vendors and customers for the past support. We wish you all to have great success and happiness in the coming years . . . ” The use of ellipsis is an interesting touch; it is as though the future is so uncertain the company shied away from finishing the sentence.

No explanation was officially given for the closure, but we can guess: soft market, sales slump, stiff competition. Heavyweights like Ingram Micro and Tech Data know this story; so do smaller players like the former Empac and GB Micro.

White Knight will best be remembered as one of the only channel players with the guts to joust with Microsoft after being sued for allegedly pirating its software. Normally those stung by anti-piracy campaigns keep a low profile once a settlement has been reached, but White Knight president Steven Wong angrily accused Microsoft of acting solely on the hearsay of a bitter ex-employee. He claimed Microsoft never contacted him directly, despite having sold products through White Knight throughout its 18 years in the business.

Microsoft Canada, naturally, refused to comment on the case, so we’ll never know for sure how well the two parties communicated. With its exit from the IT landscape, however, White Knight is among the many companies who need to perform that final act of due diligence. I’m talking about exiting gracefully.

By now, the company may have already informed its network of resellers, its vendor partners (which included AMD, 3Com and many others) and other parties with which it conducted business. This might sound like a standard practice, but it doesn’t always happen. In fact, 2001 will not only be remembered for the number of technology companies which failed but the number that stole off in the night. In the case of HyperData, for example, the notebook vendor’s former landlord had to hire a private detective to try and chase down its rent money. Empac founder John Pang meanwhile, has not been heard from since the distributor folded in May, leaving a long list of creditors scrambling for information. Creative Labs, which used Empac to distribute its Blaster line of consumer PCs, told us it relied on rumours to make the decision to find alternative distributors.

Maybe no one expects this kind of forthrightness from smaller companies, but what about those which are the industry equivalent of household names? I’m thinking of one of this year’s biggest fiascos, the collapse of Itemus Inc. This was supposed to be the quintessential new economy firm, spanning the fields of software, consulting and incubation. There was a lot of bravado when it launched, and even more when it bought out Digital 4Sight, the company founded by IT guru Don Tapscott. When the castle walls began crumbling around Itemus, I called Tapscott myself. He had plenty to say off the record, but nothing he felt comfortable sharing with his colleagues. “I’m too close to it,” he said.

That’s not good enough. How sad that the author of Digital Capital, who no doubt receives lucrative speaking fees for his insights, is unable to offer any lessons learned from his personal experience as a businessman.

There are still a few troubled firms who can muster the courage to be up front with the industry. A case in point is GB Micro, whose president Solange Dugas Baizer began speaking to the media before the company sought bankruptcy protection. This is not to say that companies deserve a medal for airing dirty laundry, but closing a business is like leaving a job: you will be remembered by your performance and conduct in those last few days.

This is an industry where the word “leadership” is bandied about as though every other technology company was led by Pierre Trudeau. It’s easy to be a leader when you’re fresh out of the gate and your IPO has gone through the roof. Real leadership acknowledges mistakes and takes the necessary measures to see that customers and partners aren’t adversely affected by their own misfortunes. Nobility in the IT industry may be rare, but it should not be the characteristic of white knights alone.

sschick@plesman.com

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