1: The two Opsware leaders sat in a sterile conference room at the EDS headquarters in Plano, Texas.
EDS was their largest customer.
“Largest customer really understates it,” Opsware CEO Ben Horowitz writes in his book The Hard Thing About Hard Things. “EDS accounted for 90 percent of our revenue.”
On the other side of the table sat Frank Johnson (not his real name)—“a big guy who grew up in the oil fields of Oklahoma, graduated from West Point, and now was in charge of anyone who touched any servers at EDS,” Ben writes.
Frank was not happy. He pushed back his chair, stood up, and shouted: “You f***ing want to know what I think about Opsware? I think it’s the biggest goddamn piece of s***! All I hear about all day is how much this product f***ing sucks.
“I’m going to do everything I can to get you guys thrown out of here.”
He then shared his plan to remove all Opsware software from the EDS servers and demanded that EDS be reimbursed for all the money it had paid to Opsware.
“He was dead serious,” Ben writes.
Anthony Wright remained calm. As Opsware’s relationship manager for EDS, he was not easily rattled, having grown up “in the tough part of Pittsburgh, as the son of legendary street fighter Joe Wright,” Ben writes.
A martial artist himself, Anthony was also “able to charm dogs off a meat truck,” he notes.
“Frank, I will do exactly as you say,” Anthony said, looking his counterpart in the eyes. “I’ve heard you loud and clear. This is a terrible moment for you and for us. Allow me to use your phone, and I will call Ben Horowitz and give him your instructions.
“But before I do, can I ask you one thing? If my company made the commitment to fix these issues, how much time would you give us to do that?”
“Sixty days,” Frank said.
2: “We had exactly sixty days to fix all the problems and make the deployment work,” Ben writes. “If we did not, we were done.”
Ben met with Anthony and Jason Rosenthal, who was in charge of the EDS deployment.
Jason “was the very first employee I had hired and the best manager in the company,” Ben writes. “A Stanford graduate with an impeccable memory and a genius mind for managing all the details of a complex project.”
Ben began by seeking to understand what had happened with the EDS deployment.
Jason and Anthony explained the challenges they were facing.
“EDS’s environment was insane and chaotic,” they said. EDS “had inherited networks and infrastructure from every customer they’d ever signed and from every era in which they had signed them.”
One example: “They had data centers connected by 56-kilobit links at a time when no other customer connected at speeds even twenty times that slow. EDS ran versions of operating systems that were so old that they didn’t support basic technologies like threads, which meant [the Opsware] software wouldn’t run on them.
“And the people were not our people. We’d find them sleeping in the data center at two o’clock in the afternoon; they were not motivated and generally not very happy.
“Beyond that, our product was far from perfect and every one of the many bugs and shortcomings was a reason to stop the deployment.”
When they finished, Ben sat back in his chair and rubbed his head. After a long pause, he said, “I appreciate the difficulties and more than that, I thank you deeply for the effort.
“However, I do not think that I’ve made myself clear on the situation that we’re in. This is not a scenario where an excuse will do. This is a must-win.
“If EDS drops us, we’re f***ed and it’s over. The IPO, avoiding the Loudcloud bankruptcy, all the layoffs and pain will have been for nothing—because we’re dead. So, our only option is to win. We cannot lose this one.
“Jason, the whole company is at your command. Whatever you need, I will make sure you get it.
“Anthony, Jason is going to work to deliver all the value that EDS expects, but he will fail. He will fail to deliver one hundred percent of expectations, so you are now in charge of finding out what they don’t expect, but want. You are in charge of finding the exciting value. When you do, we will deliver it.”
They decided to fly Frank, the main EDS executive, out to California to meet with the top Opsware engineers and technical architects.
Frank told Anthony to book him the longest possible layover in the connecting airport.
Anthony shared this information with Ben.
Ben: “What, he wants a long layover?”
Anthony: “Yep.”
Ben: “Why would anybody want a long layover in an airport?”
Anthony: “Apparently, he likes to hang out in the airport bar between flights.”
Ben: “Why does he like to do that?”
Anthony: “I asked him the same question. Frank said: ‘Because I hate my job and I hate my family.’”
Ouch.
Ben writes: “I had no idea who I was dealing with until that point. Understanding how differently Frank viewed the world than the people at Opsware helped clarify my thoughts. Frank expected to get screwed by us. It’s what always happened to him in his job and presumably in his personal life.
“We needed something dramatic to break his psychology. We needed to be associated with the airport bar, not with his job or his family.
3: One afternoon, Ben was working at his desk when his cell phone rang. It was Anthony.
Anthony: “Ben, I think I’ve got it.”
Ben: “Got what?”
Anthony: “The exciting value is Tangram.”
Ben: “What?”
Anthony: “Tangram. EDS uses a product from a company called Tangram that inventories their hardware and software. Frank absolutely loves it, but the purchasing guys are going to force him to switch to an equivalent Computer Associates product, because it’s free as part of EDS’s settlement with CA. Frank hates the CA product. Frank is getting screwed again.”
Ben: “So what can we do?”
Anthony: “If Tangram can come free with Opsware, then Frank will love us.”
Ben: “That sounds economically impossible. If we buy the licenses from Tangram and give them to EDS, that will be a colossal expense. We’ll never be able to describe it to Wall Street.”
Anthony: “You asked me what EDS really wanted. They really want Tangram.”
Ben: “Got it.”
Ben had never heard of Tangram, so he did some quick research.
The company was based in Cary, North Carolina, and traded on the NASDAQ stock exchange.
When he looked up their market capitalization, his first thought was, “This can’t be right,” he recalls.
“Tangram Enterprise Solutions, according to Yahoo Finance, was worth only $6 million. I had never heard of a public company being that cheap.”
Next, Ben called John O’Farrell, his head of business development.
“I told him that I wanted to buy Tangram, and I needed the entire process to be extremely quick—as in, I wanted the Tangram acquisition done before our sixty-day window with EDS closed.”
When they researched Tangram, they discovered some good news: The company was being led by an interim CEO. That “was a great sign that they’d be willing to sell the company,” Ben writes, “because most boards would much rather sell a company than roll the dice by hiring a new CEO.”
Sure enough, the executives at Tangram were interested.
The two companies negotiated a merger agreement while Opsware conducted its due diligence.
After the due diligence was complete, Ben called a team meeting.
“They promptly and unanimously agreed that buying Tangram would be a bad idea,” he writes. “The technology would be difficult to integrate and was not that valuable. The company was in North Carolina. It was fifteen years old and the technology was old, too. The finance team thought the acquisition was a money loser.”
Ben listened.
“And then I told them all that I didn’t care about any of that. We were going to buy Tangram,” he writes. “The team seemed shocked, but did not argue with me.”
Opsware would buy Tangram for $10 million in cash and stock.
“We signed the deal prior to the end of the sixty-day plan,” Ben recounts. “I called Frank from EDS to tell him that once the transaction closed, we would include all Tangram software for free as part of his Opsware contract.”
Frank’s response? He was ecstatic.
“Now that we had solved Frank’s Tangram problem,” Ben writes, “he viewed the work that Jason’s team completed in a totally different light.”
At the end of the sixty-day deadline, Frank called a meeting to address the Opsware team.
“I’ve given the speech that I gave to you guys at the beginning of this process to at least a dozen other vendors,” Frank said. “They all promised things, but none ever delivered. You guys really delivered and I am shocked.
“You are the best vendor that I have an I am happy to be working with you,” he said.
More tomorrow!
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Reflection: When a key relationship in my life or work is on the brink, do I default to excuses and defensiveness—or am I willing to ask what the other side really wants and take bold action to deliver it?
Action: Identify one strained relationship or “must‑win” situation I’m facing, ask directly what the other person truly needs but doesn’t expect to get, and then design one concrete step I can take this week to provide that unexpected value.
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