Techstrong Gang – October 25, 2024

Hey, everyone. Happy Friday. The weekend is here.

You know what? Election season is less than two weeks away. Have we turned Economic quarter?

Is there enough good news out there or bad news? The se s SEC's laying it down on SolarWinds. And finally, we are gonna fight for your right to cancel.

You're watching Textron Gang. Hey everyone, it's Alan Shival with Techstrong. Thanks for joining us on this lovely Friday Tech strong gang addiction edition.

We've got some great topics to cover and some great people to cover them. Let me introduce you to our gang for today. First of all, I have, I, I haven't seen him.

I guess he's been out on a royal tour, our czar of Silicon Valley, John Swartz. Hey, John. How are you?

I'm good. It's good to see you. It's been a while.

Um, I'm, I'm like a little bit battling a vestiture at Coal. I have some crappy wifi, but otherwise I'm terrific and I can't wait for a game one tonight. I was just gonna, the Yankees, who Are you kidding?

Yankees, you've been studying of getting ready for the World Series? Yes, I have. You know what?

It's a classic world series. Um, the Yankees versus the whatever, whoever they're Playing. The Dodges not, Yeah.

I never, that name is a Giants span. Never. No.

Well, you know, I saw an interesting, uh, uh, video promo, not a promo, a video show on MLB Network, Yankees, Dodgers World Series through the years. So they've played so many times. I I've, I've seen that.

It's an awesome Documentary. Yeah, they have footage of the forties and fifties games. It's amazing.

Really Good. Are you New Yorkers? Is this called the, the subway still?

The, is still this a subway kind of? Oh, no. No longer You a long Subway Between extended subway.

No, de de bums left Brooklyn a long time ago. Yeah. Rail in this country, but no, um, it's not.

But anyway, joining John and I today, also from Silicon Valley area, our marketing expert leader, thought leader, and Holton, everything else. Lisa Martin. Hey, Lisa.

Nice to see you. Great to see you go Yankees. Yeah.

We're, we're, we got a heavy Yankees group here. Oh, yeah. Well, they're from Francisco.

What do you expect? Yeah. Um, speaking of Go Yankees, these next two people also have a geographic, well, one by marriage, uh, a geographic affinity to the Yankees joining us.

Uh, Kimberly Bates from Future of Group. Hey, Kimberly. You wanna explain that Yankee Connection?

Oh, my husband's a Brooklyn boy. So we're, we're in Colorado. He's been displaced, but you know, it's the entire season.

He's on his phone or watching the game, so I'm, I just consider myself a Yankee widow. Okay. Well look somewhere.

Get this woman a Yankee hat. All right. Um, speaking of Yankees, Haley from the Bronx, he throws Lefty, and that's righty.

He's also the CTO at Visible Visible Act. Yes. Guy Courier.

Hey, guy, how are you? I'm great. Great to be back here.

Um, hate to break to everyone, but I might be the sole, uh, Zen of the Bronx, who is a Mets fan. Really? They must have beat you up.

What does that mean? Huh? Can You still, can you still work against the Dodgers?

Well, as a, as a Vikings fan on the NFL side, it just means I'm a gluon for punishment. Ah, yeah, yeah, yeah. That's true.

What was it like? Did, did something happen to you as a child? Well, Vikings fan, twins fan have a strong family affiliation with Minnesota, so I can't really support the Yankees.

So the Twins, Shades of Harmon Killer Brew all, we'll, we'll, we'll move on. He's a switch hit. I think he is.

But he's also now a season ticket holder for the Yankees wearing his, his Yankee shirt. Hes, he's old, he that for the game already. And, and I, And I pulled my old Ricky Hens Club.

Great baseball Ricky Henderson Offers So, so many great players. Hey, Mike, how are you? I'm doing great.

I looking forward to an awesome weekend of baseball. Absolutely. I, I had, so I'm flying up to New York later today, and I was, I was, I actually had visions of staying over on Monday, just catch a game, but my, I sometimes the vision just doesn't work out, so I'm flying back home Sunday.

I've got too much to do next week here. Um, but anyway, enjoy. It's, it's great to have you all on here.

As I mentioned, we've got a couple of, uh, great topics to cover. One is about have we really turned the economic corner? And I have some thoughts on this one, but it's a good one.

Let, why don't we start with that, Mike, what, what's it about? Yeah, I mean, the Federal Reserve has lowered interest rates and, uh, I was at a BMC conference last week, and the CEO gave the keynote, and he led with this whole thing about saying, Hey, economy's turning it, organizations need to get ready now. We need to start building software that's gonna be ready to roll out in 2025, because otherwise you're gonna miss the boat.

And I think we've been in a downturn for so long that maybe everybody's kind of missing the message. But, Alan, what do you think is going on here? So, look, clearly not only did the Federal Reserve lower interest rates, but lowering it by 50 basis points by, by, you know, 15 points twice what was expected by some.

And they said that they'll probably have two more interest rate cuts by the end of the year. 3% range. Unemployment is low, happy days are here.

Again, the problem is, traditionally it is a lagging, is a laggard, a lagging indicator of economic growth. We don't like to put that money in there till we see the, the gears going. By the same token, we're also a lagging or a laggard in, in putting the brakes on.

When, when things don't go well, we, because we just think we're in a new paradigm, and then it's just a momentary, momentary blip. Right. Uh, so I, I happen to agree with Iman who eman Zari, who's the CEO at the BMCI, I agree with him.

I think now is the time Q4 Q1, if you are on a calendar year, is the time to stop making investments if you wanna be able to ride the cre that wave that's coming. I think you, you know, you, you mentioned, I was gonna jump in briefly. Um, you look at some of the actions you've seen recently with Microsoft Anthropic, ServiceNow kind of upping their game in terms of Cisco and other one actually at Gentech ai.

So in a sense, I, I've talked to some of the executives at this comp at these companies, and they're of the same view as the B-M-C-C-E-O, that there is gonna be a turn in probably beginning of next year. So they're starting to make the investment, they're starting to act on actions. And so I actually do give that what he says, credence.

I actually kind of feel like a bit of a turn. And there has been exhaustion, as Mike mentions, this downturn in cutting back. I think actually we are kind of at the crest of, of kind of some growth, legitimate growth.

Are we kind of seeing some sort of, uh, issue with CIOs? Is this the time of year they need to go have this conversation with the board? Or are they already having this conversation?

I think it already started. And the reason why I say that is because when we looked at the earnings that came out in September timeframe, July timeframe, we saw beginnings of an uptick of enterprise servers flowing, um, full of the couple of the vendors called it out. And specifically, I do remember Antonio talking about it, that they're saying this recovery on the enterprise side.

Um, the other side of it is, you know, we're gonna see, or starting to see the flow of a I PCs going, which means that there's investments in the AI side of the house. Um, they'll have, you know, expecting that little bit of a slowdown still on the AI environment because trying to absorb what they do have in the enterprise. There's still lots of flow going into the MSPs or the cloud providers in those devices.

But the, um, enterprises are still looking at how are they gonna do this? How are they gonna approach this space? But yes, I would agree with that.

The only thing that I'm to watch is that the debt, um, consumer debt is up, um, significantly. And, uh, that's the only thing that, that's the one thing to me that makes it, you know, it's a caution as we go into this next year. I think, uh, the perspective of, uh, the head of BM CED is a particularly helpful one or, uh, thinking about IT growth because, uh, what, what does BMC produce?

It's, uh, a lot of operations, infrastructure management, service management software doing forever. They have tons of experience and frankly, data, um, uh, about what their customers are, are doing and, uh, uh, in, in their data centers and with their IT landscapes, right? So, you know, a little bit, uh, like some other operations companies, when companies are upgrading, investing, um, adding, uh, we even today cloud, uh, resources, um, someone that, that filters up out of the field, BMD, the operations field, sales field and everything, and it becomes an understood trend within BMC that I think has relevance for at least on the enterprise side, the entire industry.

So that's like a leading indicator of its own. That's maybe more soft data than hard data, but I think when the heads of these companies, ServiceNow would be another one, start talking about things in this way, it's really worth taking as, as pretty good anecdotal evidence. I think another indicator though is investment in tech.

And I don't think that has rebounded. As a matter of fact, I think it's, as I saw something like investment in security, which is a top priority, as it always is, was down 53% last quarter, 53%. Now investment.

Usually the VCs invest on the, you know, buy, buy on the downturn, sell on the up, right? And so usually VCs invest when they think that TR is, you know, they're trying to time it because they're all smarter than the average bear and, and they're trying to time it, you know, right when the, IT starts heading up. So they could ride it up.

Listen, I would listen. Do you think that the marketing folks are in looking at all this right now and making a case? Or will they be behind the curve?

I think they are looking at it right now. I think to Kimberly's point with the CIOs, I think the CMOs are evaluating this now and understanding how they can help this flywheel of, of, from a DevOps perspective, I think there's a number of areas in which marketing can help from an alignment standpoint because they're front and center with user feedback, kind of pulling that in gathering requirements and helping this flywheel to really go forward. So I think marketing can be kinda a cog in this wheel, and they are looking at that, and they are also reevaluating their investments, which we've seen go down over the last couple of years.

So I think it's looking positive from the CMOs desk. Alan will, some of these companies find themselves being left behind. I know everybody has a bad case of f for ai, but I think maybe they should wake up and go, Hey, you know, by the time I start making my move, you know, I'll miss the train.

You know, Mike fortune favors the brave, but, um, this is this, this is normal. This, you know, it depends on your risk profile, depends on what, how do you feel about it? Do you, do you agree that this is, you know, that we're, we're, you know, happy days are here again, I think there's a lot of people look at our elections for Christmas sake, right?

Half this country thinks we're in an American carnage. The other half thinks we should be joyful. It's no different.

It's no different than here, right? This is what you're dealing with. And, and so no matter what you or I or any of us say, there's gonna be a good chunk of CEOs and boards who are gonna say, you know, let's go slow here.

This, you know, and, and it, and it may very well also depend on what happens with this election, right? Do we have a clear winner? Are there, is there gonna be nonsense involved?

And, you know, what's effect is that gonna have on the economy there? There's so many variables here. Well, Kimberly, I would just point out one thing I think that we can be optimistic about is, hey, maybe demand for IT expertise will increase in the 2025, and people will find it easier to get a job.

I don't think that's gonna change from where we're at right now. I mean, I think it's the demand is there. The demand is, and it's selected, uh, skills that are there.

Um, what we see is some of the application of AI into the IT roles. Um, and that's gonna continue, um, as we get smarter how to use it, um, that will have that impact. We've also seen this last two years maybe, you know, you had this huge hiring during 20 21, 20 and 21.

And so now what they've done is cleared back. You have these things like Google saying, if you don't move back into the building, you're out and you have a bit of the same thing from AWS and you have a few of the others. So now they're, you know, they're kind of moving towards that piece of it, bringing the people in.

So there's, there's a bit of a, looking at the staffing, do I need that staffing? And I think that's normal processes. Going back to what Alan is saying is I think we're going through that normal where we had that huge hire.

Now we're getting back to, uh, maybe some, you know, where it's, uh, we're really identifying what we need. Um, the last thing I'll say about that is that the other thing that happened in the last two years is who we seeing a culling of the products in companies. They've looked at what their core products are, many of them have.

And so they spun off some of these things that they're not gonna spend the money on and, um, saying, okay, so here's where I'm gonna make my money. And that has an impact on staffing as well. Yeah, I think from a user's perspective, um, the question is, uh, if I see these kinds of headlines or statements, um, uh, the, the user, meaning the end user, the, the, the implementers, the adopters, um, what they probably want to know is, oh, does this mean that my budget is gonna go up more than I expected?

I've been fighting this fight for however long. Am I going to get, uh, more budget to hire staff? Am I going to get more budget to spend on cool software and infrastructure and like whatnot?

Um, and I think, uh, it's, it's probably fair to say that the answer is probably no, certainly not as much as you would want. Because I think there really is there, there are all these constraints right now, thanks to this incredible demand for this thing. Uh, I'm gonna use it first time I think in this conversation of ai, this thing of ai.

Um, so they were already trying to modernize and do cool things with cloud and all this stuff. Now they're supposed to add ai. So no one's gonna have all these great new resources.

A lot of our discussion here has been how is this affecting the vendors and their sales and their ability to develop new products and be innovative and all that stuff. But I think the user perspective is really important as well, which is my budget may stay, may stay, stay stable, or it might grow a little more than usual, but at the end of the day, I'm still gonna have to make some kind of trade-offs and not do everything that I wanna do. I'm gonna strike a more optimistic note.

And I think that the budgets as written will be constrained, as you guys have said. But as we go along, I think the business units are gonna be looking to take advantage of various opportunities and we'll see more spending on it in 2025, significantly more. I'll even go as far as to say it just won't be driven out of the CIO's budget.

I would agree. Very good point. Yeah.

Mike, Mike Ard with the good news. Bizarre. That's the cognitive dissonance.

Alright, Let's take a break. We're gonna come back, you know, the SEC laid down some wood on a couple of companies, uh, around the SolarWinds hack. We'll talk about that and what it means for you.

You're watching Text on Gang. All right, folks, we're back and we're talking about our second federal agency that's having an impact on our lives. The SCC laid down some, uh, penalties against companies that apparently from their perspective did not disclose the full extent of the impact of the SolarWind hack, um, to their customers and to the government in general, and also investors.

And I think Unisys is in that set and a few others. I think Unisys was like, for $4 million and the total number of fines was 7 million. Um, it does raise a question though, in my mind.

Um, let's see, Alan, when was the whole SolarWinds? Heck, it was like four years. SolarWinds was about two years ago.

I, years Ago ago. So, so Around January, uh, maybe, well, almost three years ago now. I bet.

I think it was around January of 2022. So are the wheels of justice maybe moving a little too slowly here, or it feels like this took forever? No, I, So look, first of all, if you believe, you know, the Verizon data Breach report, we don't know about a hack usually on average for nine to 18 months after the hack anyway, this hack we knew about pretty quickly because of the terrible repercussions of it.

But if you remember, Congress had hearings on this, right? Some people were called on the carpet. Um, and there was a, a long forensic cycle of exactly how, I mean, this became, you know, kind of the classic business school case of, of a, how a hack takes place and how it filters down the software supply chain and, and ultimately ends up with, with, uh, the repercussions that we saw.

Now, look, let's not get crazy. This was four companies, four tech companies, as you said, Unisys was, was 4 million. The other three got roughly a million each, let's call it.

And why did they get fired? For, for under, I don't wanna say underreporting, but under disclosing the, let's say the seriousness of the hack, right? And this goes back to something that the, the back when the, the Congress had the will to do things, they weren't throwing out speakers left and right.

And all the other craziness we have now, they actually did pass the law that when you were the, if you had a breach, you had to disclose within a certain amount of time, you had to provide for credit monitoring and, and all of these things. We've all gotten those letters in the mail, I'm sure, right? Um, and what the SEC is saying, and the SEC had similar, you know, especially for public companies, the SEC is saying these public companies didn't live up to the, to the letter of that legislation of those rules, which, you know, they had to disclose the hack not, and not just disclose the hack, but disclose details.

What information was taken, whose information was taken, make an effort to reach out to those whose information was taken. And I think what happened here is, it's quite frankly, the SolarWinds thing happened. Microsoft, 'cause you know, SolarWinds was, let's call 'em the third party supplier that, you know, 97% of the Fortune 500 was using.

But that allowed a back door in to a lot of these other software vendors who were, you know, who, who incorporated SolarWinds into their supply chain. Microsoft being a big part of it. Microsoft, if you remember Brad, I forget his name, the president of Microsoft, or the guy who was charged with that.

Um, it wasn't Satalia, it was Brad, someone, I wanna say Brad Park, but he was an ranger defenseman in the seventies. But anyway, um, you know, he got called on the carpet. And I think a lot of other companies then kind of just tried to minimize the, they didn't want to get painted with that brush.

And they maybe disclose that, you know, they were part of that SolarWinds kind of thing, but they didn't fully disclose the, the nature of the repercussions, the breadth of it, and good for the SEC. Here's the lawyer, you know, having gone to law school and done the lawyer thing. I'd like to see, are these companies going to appeal this to the courts?

'cause the courts have recently said the SEC has overstepped their bounds. And if Congress hasn't specifically given them the authority for these kinds of tribes and these kinds of, uh, enforcements, they have no right to find these companies. Okay, Len, I thought that they said they agreed to pay these.

Is that Actually, I, I think uni did, did the other one. I mean, for a million bucks, it may not pay to, as silly as it sounds to individual people who a million bucks, it may not pay to appeal. There you go.

Right. But I do think that that is, you know, I think the SEC is, it's hemmed in. If they go too high up, it does pay to fight these in court.

And I'm not sure, given the current federal court, especially at the Supreme Court level, um, posture that the SEC is in fact empowered to do this. So the Microsoft President is Brad Smith, and he gets rolled out every time that the Microsoft gets hauled in front of the government. And he's like, been doing that job for 30 years as far as I can remember.

Yeah. Guy Brad Park for the New York Rangers. Yeah.

Guy, let me get your opinion on this. I feel like there still isn't like a standard set of rules for when you're supposed to disclose what if you have a breach. And I feel like it's still a little bit mushy out there in terms of, well, what am I supposed to share and how much can I keep secret?

Because if I do share everything, am I not invite any more trouble? Yeah, I think you're right. So, so it's interesting, Alan, that you, that you bring in the courts just sort of been a, sort of a trend in the courts to, um, shift depending on how you look at it shift, um, the answers to such questions that Mike asked, um, into either the courts or to legislators, because where, um, this was the import, if you've heard about Chevron and how Chevron was partly overturned, Chevron was a rule that the Supreme Court set or the an interpretation that the Supreme Court set, uh, in the eighties saying that where the law is a little vague, um, reasonable interpretations by agencies like the SCCs are allowed to rule.

And then just this year, the Supreme Court said, no, wait a minute, that's actually not true. Um, and was, was actually, frankly, I think objectively speaking, vague this year in that ruling and saying, what's supposed to be done other than enacting, uh, more well-defined regulations, which Mike, in a case like this, security, it's almost a trope. We talk about it all the time.

Cybersecurity things are changing all the time. New modes of attack. You can't get too specific.

You need, um, a deeper understanding, uh, in order to really sort of figure this sort of thing out. So where does that leave us? It kind of does leave us, as Alan said, towards going into the court.

But, um, if you like myself, feel that you want some experts who will still make mistakes and get things wrong, but have the expertise to more often get them right than the court or even legislators if you want them to do their best to interpret, uh, you know, laws that are not specific enough. In this case, I think the government of the law doesn't mention cybersecurity specifically. It's just talking about material things that affect the material outcomes for a company.

Right? And I think I would say that things like breaches and potential disclosure of personal information have a material effect on the profitability of Unisys. And so that's within scope.

That's my unexpert opinion. So yeah, it's all very mushy and becomes this sort of political question until the day that one of these things really affect, you know, a whole swath of affluent Americans, frankly, in a negative sense, in which case, you know, the winds could turn in the other way. So it's mushiness upon mus this, so I saw.

Yeah. So the big question that I had with this is, as I read, um, some of the materials, and I did, uh, and I am not an expert at all in this, but my question was what was the material impact? How did an, you know, the uni's lack of whatever, you know, um, disclosure impact their earnings or whatever, that there was a, what was the material impact here?

And that was very unclear and everything that I could read that was publicly released, Well, is brand is damage to your brand and material impact. Yes, I think it probably is. That's what we talked about a lot.

Absolutely. But that's argue As opposed reach is not the permitting damage to your brand. I mean, the entire federal government was shut, half the federal government was shut down because of Silver Winds.

So Yeah. So maybe they canceled a couple of Unisys contracts, or maybe they didn't. I mean, what is the Material?

No, I think we did. They didn't. They didn't, they did it.

But here's the thing, guy, you, you mentioned it before under the Chevron case, and I'm not, I don't wanna get legal beagle, but under the Chevron case, the SEC was given some broad powers to interpret. The disclosure laws were not just about the financial impact on the public stock price of a public company, but it was on that public company's duty to disclose to their customers, right? And there were specific things that need to be disclosed.

What what information of yours may have been exposed or was definitely exposed, right? But it usually, it's may have been exposed what you can do to protect yourself offering free credit monitoring or something like that. If, because it wasn't just that the federal government was brought down that supply chain attack, the SolarWinds attack allowed, there were very specific targets that they went after that didn't just bring stuff down, but allowed access.

It was a back door into things. So The question I would have, Alan, is that an FTC issue was thatt c Well, It's not an F ft C issue. It's for whatever reason the SEC stepped up when that, when these cyber laws were, were Congress was doing something and, and, and the administration, I don't even remember what administration it was.

It might have been Obama, it might've been, uh, w Bush or even before to Clinton. But whenever, whenever that came into effect, it wasn't Clinton, whenever that came into effect, the SEC stepped up and they made it just, and, and I always remembered thinking, why did they, so they only did this for public companies. Why, what about non-public companies?

Right? 'cause the FC doesn't deal with non-public companies. Here's, um, here's what I think needs to happen though.

The gardens, you know what Gerald, just like we have the National Transportation Safety Board shows up every time there's a train crash, plane crash or whatever else, if there's a major cybersecurity incident, we need the equivalent of a body who doesn't have a particular dog in the race to just come in and do the analysis of this thing and say, here's the official record of what happened. Here's what the damages there were. And then if people wanna sue each other, whatever, that's fine.

And they can do whatever they need to do. But right now it's just, it's too mushy. And so, uh, I don't see how any of the analysis stands up even after you look at all the reports.

'cause it's just like, well, what was the damage? What exactly did happen? And who was responsible?

But if you are gonna put teeth in a disclosure law, it's the question of who's, who has teeth. I say we need a, I say we need a new dog with teeth. Just what we need another federal agency, A better federal agency.

No, no, no. It would be one of the existing federal agencies. I knew this would be the FTCI think it would be.

But now, now you're putting a regulatory role on the FTC that would, might be similar to what, uh, which I, I'm losing my mind with these acronyms. The one that governs, uh, uh, uh, you know, air travel and stuff. Um, Federal Aviation Commission.

Yeah. FAC. Yeah.

In any case, uh, to give them a role, Alan, um, that, uh, would be somewhat similar. Uh, well, to do sounds pretty extreme to me as well. You need a Specific act of Congress to empower them to do that under the current Supreme Court.

Mm-Hmm. Ruling. Yep.

We don't have a Congress that ha they they could barely pass a budget. They didn't actually. So there you go.

They can't keep a speaker, you know, so it's, this is all pie in the sky. Look, maybe the EU will do something about it. I, I, that's, I say we turn the CSA people loose, give 'em the money and let 'em do the job.

But they're not empowered. CSA iss not empowered by Congress either. You need a congressional I do.

You need a Bill. We need some lead legislation and maybe some actual Leadership. So, so now, so now while, while we have a minute though, I would love to hear Lisa's perspective on this because we're, we're sort of saying this is like, these are like, it's like a wishlist of things that could happen.

Uh, you know, Mike, you're being very optimistic, this podcast. It's very disorienting. I'm thinking, you know, I'm thinking that, uh, uh, these are, these are essentially, uh, you know, public communications exercises that the SEC happens to be the intervening agency in.

So Lisa, you know, when we're talking about the market of ideas in the market of commerce and all that other sort of stuff, that's the only controls that we have. How, how is that operating? Um, it's mushy there as well.

I would say. I think what, what the NCC is doing here may be, um, making examples out of these four companies. For example, Unisys was, they said they were, they called the, the breach hypothetical, which is very misleading to, to shareholders.

I think what we need help with is, is brand reputation management, um, for these organizations to make sure that the shareholders are swatched based on these concerns that these scapegoats might be, uh, leading in that space. But I think to all of your point, there's, there's ambiguity with this from a, an enforcement perspective. Um, I think from a messaging standpoint, that's where marketing can come in and help.

Now, I was looking at the statements by these four organizations that were find to try to understand, well, how did this me who crafted this message? And I think it's not a marketing issue. I think it's an an executive leadership team collaborative discussion.

Maybe it's a board discussion about what they're going to say, what they're going to disclose. Um, and now ultimately I think what they need to do is move forward, um, managing their brands well and ensuring that they can as squash to the best of their abilities concerns when the next one happens. I mean, the other thing to remember is, look, as, as Kimberly pointed out, all these firms sort of pre, you know, agreed to pay their fines and not appeal.

I'm sure there was a negotiation there, right? Uh, maybe the fines were lowered. There was a, it was, you know, and even, quite frankly, $4 million to a company like Unisys is a, it's a slap on the wrist.

This isn't, you know, material. So it, it is what it is. And, and I think we, we have to recognize that for what it is.

But, you know, the government could say, we did something about that SolarWinds thing. Companies gotta get real about disclosure. Um, we're gonna get real here and take a break on Textron gang.

Let's come back and talk about fight for your right to cancel subscriptions on Textron Gang. All right? And then our third government agency, the FTC is out saying, Hey, you have a right to cancel your subscriptions.

And it should be easy, as easy as it was to actually subscribe in the first place. On the face of it sounds pretty reasonable, Lisa, what are the marketing community saying about all this? 'cause a lot of this effort is usually involves like, Hey, come sign up for my little service here.

Oh, you wanna leave? You know, there's no button for that. Exactly.

That's the, the challenge is the fact that it's so challenging to cancel subscriptions or to avoid kind of the sneaky auto enrollment. Um, now a lot of that's driven by marketing. So it's sort of a double-edged sword.

I think it will please the consumers of the products and services to be able to cancel something easily. It also might have, should affect, will affect the revenue of the company. Marketing has to do a dance there to make sure that the benefits and the risks are balanced, if you will.

I, I'm pro that fight for your right to cancel because I, I don't even wanna know how many subscriptions I have that I never use or I signed up for HBO Max because I wanted to watch something and two years go by and I'm still paying for it. Um, it reminds me of this friend's episode where Chandler goes to cancel his gym membership and ends up with a joint checking account with Ross. 'cause I can't say no, uh, 25 years later we're still having these challenges, but I think it is a positive for the consumer.

And ultimately when the consumer wins, the brands win too. There's just, it's not necessarily a direct correlation and it's not necessarily immediate, but I think this can be a win-win. I say about damn time, because this is a major PIA, right?

I do remember that Friend's episode, Lisa, that was a good one too. I Ms. Chandler.

Um, Ms. Ross also. I think I miss Rachel more.

But anyway, the, the point is this, the point is this, I've moved to most of my like apps subscriptions like a max or something like that. I buy through Apple because Apple does give you, when you go into my Apple account or whatever, there's a button there that says subscriptions. And it lists every subscription that people are banging your Apple on.

You, you know, your Apple account. And you can just hit do not, do not autorenew cancel, right? And, and, and it automatically does that for you.

On top of that, there's a whole like carnage industry. I've seen TV commercials. I sound like a politician.

I saw it on TV anyway. I've seen TV commercials for an app that will actually, I guess go into your bank account and, and look at, you know, reoccurring charges and treat those subscriptions. And I, you know, allow you to manage them better because this, this is a real problem for people.

You know, it's, it's $9 here, $90 here, 40, you know, before you know it, you're talking real money. Yeah. And, and it's the same thing with the dreaded seven day free trial.

Nothing is straight, right? Um, so you, you sign up for that free trial and then, you know, good luck. A lot of these places, they make you put your credit card in with the free trial and then, you know, they charge you and then you write them and say, Hey, I canceled.

Well, no, we don't have record of that, you know, and good luck. So again, for 1499, are you gonna, how much are you willing to fight? And, and then you say, okay, well make sure you don't charge me next one.

And it, it's, this is a long time coming. This is, and again, not to get on a soapbox, but this is the kind of stuff that Elizabeth Warren has been talking about in terms of a, a, a consumer rights kind of, uh, panel for a long time. We need the FTC and the other agencies to be doing these kinds of things to protect us from, and it's not unscrupulous.

I'm not, I'm not saying these companies are ne, I mean, some of 'em are very legitimate good companies. It's just bad business. Hey, it's bad business.

Hey, you Know, one of the great things about losing your credit card is, is you start getting emails from these people telling you, Hey, your credit card did not renew and you Well, That was a drug way of doing it. Yeah. And then you're like, Who are these people?

And get off my cat out. So Yeah, you Have a good point, Alan, about the cottage industry. I think it's rocket.

That's one of the commercials that I've seen that it will actually, you just subscribe to that I imagine. Or you pay for that service to then find, um, all of the, of the recurring transactions, to your point. So it's interesting that it's opened up this other industry for organizations to monetize services, to help people get, you know, subscriptions canceled.

I agree with you completely. I think it's about time. It's gonna be interesting to see how it unfolds and how quickly the consumers actually are able to benefit from this.

Well, I Don't think another industry with more cost. Okay. So I don't think it's just the consumer.

Um, literally I'd be, I, we, we've got a lab right now. I have to ring up the lab here. Um, and we, the lab uses AWS Azure services for doing testing and we will set it up.

And, you know, I have more than, you know, as you know, I was business leader for, for the other company. And more than how many times I'd walk into, you know, Russ Fellows who runs the lab over there, and I said, what the heck is this charge? He goes, I thought we canceled it.

And I'm like, and it's going back there. So, I mean, we have an entire industry that is in your CIO's department that is monitoring those billings coming from AWS and Azure and trying to figure out how to cancel it. And it was difficult.

I mean, there was still some carry on. And what that is what we did. We closed down a credit card That that's exactly what we Did, was the only way we could get rid of it.

We finally closed it down, we got rid of it, and they, you know, signed up for the other stuff on the other things that we wanted. We did the same thing because at at Textron, you, you signed up for some marketing program and then, you know, you used it for about two months and then no one uses it. And then all of a sudden you get a $399 or $999 charge as an order renewed.

You call up and say, we haven't used this in six months. We don't wanna renew it. Well, very sorry, you had to give us 30 days notice on your non-renewal.

You never even told us it was renewing. Oh, if you read paragraph 16, we don't give you any notice. You knew that when you signed up a year ago.

And so once the credit card was changed, now they'd call you up and say your credit card didn't come through. I'd say, well, too bad. I, I, uh, so hang on, Mike, do you wanna say something optimistic?

'cause I'm about to go all doom and gloom On everybody. Go for it. I I was, I'm, I was killed on it.

Yeah. First of all, completely agree with you Alan. It's about damn time and the general sentiment here.

Um, but I think I want to focus the about damn time on just the announcement by the current administration and the setting of the rule. Because this rule is gonna maybe last a little longer than a snowflake in a, in, in, in, in a, you know, in hell or whatever. But not much longer than that.

The lawsuit was filed in the fifth Circuit. The fifth Circuit is, uh, is a, um, uh, a notoriously anti agency action, anti-regulation group. Um, I think an injunction will be coming extremely quickly.

And uh, it's this sort of thing I guess gets filed in the court of appeals instead of a district court. Um, so, you know, just in short order, it's gonna make it to the Supreme Court and the whole thing's gonna be smothered. I'm quite certain of that, um, on numerous grounds.

But mostly I'm just going on, on how the courts have acted. There's a reason that this was filed in the fifth, uh, uh, circuit Court of appeals. 'cause if it was filed in DC it would be completely different story based on the composition, the History Texas one, Uh, Texas, Louisiana.

Yeah, Oklahoma. Um, I think that, yeah, I think that that, that, uh, it properly belong belongs in, there's over The Drew Scott decision there. Yeah, I think it properly belongs in DC because this is national and it's a federal agency and everything.

But apparently this is how we, that's our courts play the courts right now. You've couldn't f*****g chop it, but, but making the announcement, which I think if you cynically believe, I'm not quite such a cynic as I often sound, you cynically believe that's an announcement made prior to an election to get people more on the Democrat side, the current administration. I think there may be some truth to that, but I don't care because putting this issue into the public discourse is what it is about.

Damn time happened. Um, we have all had these experiences, Lisa is completely right, in my opinion, a hundred percent right, that it hurts your brand. Ultimately it hurts your go-to market.

It hurts what you're trying to do, which is be profitable and grow to make it hard for people to lead. You are right that the business incentives inside these organizations, the, but the, the VP in charge of unsubscribing or whatever is, you know, incentivized to keep people from unsubscribing. And this is one of the many tricks they're allowed to use to do that.

Um, and the last thing I'll say is it's really significant to me that the, the parties, uh, uh, these three different groups, three different industry groups and, uh, filing the suit, and the one that's least discussed is the IAB, which is the Interactive advertising bureau. Just think about that. The interactive advertising bureau, their job is to hook people in and to track them and do all of these things.

And that does hurt that business. And I say men, we need to have a more open, frictionless economic system that allows people to come and go do what they wanna do, stop doing when they wanna stop doing it and have remediation when there's difficulty there. So I I, I like the idea of, you know, I think it's rocket money or something like that, that you were talking about, Lisa, that has this way of finding all your subscriptions and Right.

But that's more friction and more actors in a system that should be Yeah, spelled, I mean, take a cue from the GDPR, right? If you're a European citizen, and we get these emails all the time, my name is Guy Courier, they could say, I want you to remove all of my records from your system, or I want you to remove these pieces of my identity and, you know, remain private. You know, I get have all some or not, right?

And all I gotta do is send an email and if you don't respond in seven days or whatever it is, I go to the, you know, the governing authority in the eu and all of a sudden, you know, there are like, I think 10% of your revenue is at stake or something if you, if you don't follow the GDPR. Uh, but there they have political will to get things done. So let me ask you a question.

Maybe what percentage of the revenue is being generated by these? so-called services that is a revenue Of business, good Chunk of, and so how many of them are not nearly as valuable or as healthy as people think because they're just have, you know, a boatload of revenue that, um, is not really renewed in any, you know, meaningful way, at least not with the intent required. And I think, you know, there's gonna be a conversation about that in the near future from the Wall Street side going, a lot of these companies are, you know, shaky is all there is to It.

And I think that's, you know, the measurement that go, that they report on the public companies report on, they're gonna report on their a RR, but they're also gonna report on the renewals of their, and that's very, very important, Right? 92% of our customers stay with us, or 98, you Know. And so, I mean, I, you know, on one hand we're talking about the consumer, the 9 99 subscription.

On the other hand, I was talking about things that they were in the thousands of dollars, not 9 99. And even in that, you know, it was difficult to do something rather, and I, if you've ever worked with the telcos, who was the other people that filed, um, as well, I think believe in the lawsuits. Um, they are notoriously difficult to manage.

Now they've gotten better over the years, and as I've dealt with the telcos on a, um, corporate basis, we've seen them a whole lot easier. But we all, we all had the privilege of dealing with the cable companies, those, those kind of guys. In some ways, you don't wanna hit your head up against the wall when you go through that process.

So I agree we need this. The dissent sensing one dissenting, or there was two dissenters in the FFCC, they were more talking about more the quality of the descriptions of what vi what is a violation and what the dissent from saying is saying, we need this. But this is not defined enough to, for people to be able to thread the needle to say, just like we were talking about earlier on this cybersecurity thing, security thing.

What is, what is really a violation or what is not a violation? And, um, you know, I'm not an expert on this. I mean, Lisa, you probably would know far more than I do in terms of, you know, some of the, the items that are going on with that.

But that's seems to be where a valid criticism could be in terms of what just got, um, the regulation that just got set up. Alright. I would just know one thing if you were running for office somewhere, do note that this is an issue that regardless of what your favorite color is, everybody eats.

Yeah, Absolutely. Can I, a similar, in a similar vein, I wanna bring up one thing and then, we'll, I got a letter the other day from some parking company here in Delray Beach, Florida that has a picture of, I think it's my car parked in a spot saying that the car was not allowed to be parked there, and they want me to pay $77. They're not affiliated with any local government.

They don't pretend to be, they don't, their only enforcement mechanism is if you don't pay us, we're going to the credit agencies on you. Right? That's their big stick.

There's scam. And, and we know it's like dealing with them. I'm sorry, Kimberly, there Is a scam that's going around on that.

So, um, I came across on the news or someplace and said, this is a scam that's happening. Yeah, well, I, I went on site to dispute it because we had gone to the, I pick movie theater, which has valet parking, and they said, if you park on the third floor, it's free. And I went all the way up to the third floor and parked, I'm gonna fight this.

I'll keep you all posted of what it is. But this isn't even governmental. This is private industry trying to shake you down, right?

Hey, I'm parked illegally. Tell me, slap a sticker on the car, don't send me a letter a a month later, you know, trying to shake me down for money. That's not gonna work.

So anyway, as John Belushi would say, they're spoken in the streets of Mexico, but not here. But no, uh, we're gonna add our text on gang on on this lovely Friday. Hey, whether you're a Dodger fan or a Yankee fan, I hope you enjoy the World Series this weekend, as well as football and every, all the other great sports going on out there.

Try to get out though, enjoy it. If the weather's still nice where you are, enjoy the weather. We'll be, we have a full day of Textron TV following this and we'll be back Monday with more great stuff here on Textron gag.

Thanks everyone. Have a great weekend. Discover Textron group, the epicenter of tech innovation.

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