Behind the Week’s Headlines: Creative Accounting 101

One plus one equals three! Enron, Worldcom, now some murmurs and rumours from Xerox. Creative accounting seems to be a way of life in today’s market especially if it is big business. Or is it bigger business news because of today’s instant access to information via the Internet?

For

the last nine months, the biggest news in the tech sector has been the ongoing acquisition/merger of HWP and CPQ (Hewlett-Packard Co. and Compaq Computer Corp.). Using their respective stock symbols is quite appropriate, since the function of every business is to increase “”shareholder equity”” and that’s exactly the challenge of the new management team. The battle was about focus, intent, methodology, and how the companies were going to be managed, either jointly or separately. The shareholders had nine months to decide their fate by voting “”a management strategy””.

The new management team will have some challenges, it may take some time for customers to say HP ProLiant and other previously competing technologies. For resellers and customers, we are going to be hearing words like “”Hybrid Model””, “”Channel Friendly””, and “”Non Channel””. Those are only indicators of business strategies as they try to grow their business.

As far as “”the New HP”” is concerned, if their business doesn’t increase, there will be a lot of resellers and “”New HP”” executives getting their CVs updated.

Now customers get a chance to vote with their P.O.’s, and we get a chance to see if one plus one does equal three!

Frank Abate is the president and founder of Mississauga, Ont.-based Infinity Technologies Inc., one of the top VARs in Canada.

Share on LinkedIn Share with Google+