The Story Behind CyberNet's Unraveling

A few months ago, I got one of "those calls." You know, the kind you get when you're otherwise preoccupied. Half listening, barely paying attention, I thought, "Is this guy a kook?" If you run a magazine or newspaper, you

get these calls on occasion. The information from most turn out to be wrong, exaggerated or contrived. But once in a great while, they are true. This was one of them.

The call came from someone who said a large solution provider was unraveling. He spoke of FBI investigations and wild tales of fraudulent activity. How could he know, I wondered? The caller persisted, keeping me apprised of the shocking, final days of The CyberNet Group and its founder Barton Watson, who ultimately committed suicide in his home after it was surrounded by police. Really.

My source--my Deep Throat, if you will--had a contact inside the Grand Rapids, Mich., police department, so he possessed the inside scoop. He called me again the day Watson holed up inside his home, coming face-to-face with the life he had built on lies, corruption and deceit. The tale was so compelling that I asked senior editor Rob Wright to investigate. And, boy, did he ever. For months. Eventually, we posted an online story about the company's demise. But that was just the beginning.

Starting on page 22, we present the entire story as only a magazine could--rich with details, visual images and insight into how Watson built a solution-provider empire by conning everyone from suppliers to employees to, yes, even his wife. It certainly rivals tales of Enron and Tyco, albeit on a smaller scale. While I am sorry this happened at a solution-provider company, it need not give our industry a black eye. But it does serve as a lesson about the pressures, temptations and decisions people in our industry face. It's too bad Watson is not here to explain why someone so smart--his IQ was reportedly off the charts--would go through such trouble to deceive rather than build a legitimate business. We will never know Watson's motivation, but you can draw your own conclusions from the story.

So, please turn to this issue's investigative report and read what has to be one of the best cover stories VARBusiness has ever published. It ranks right up there with "The Architects of Porn," which was written by senior executive editor T.C. Doyle, who helped edit the CyberNet piece.

ALSO OF NOTE: On June 14, VARBusiness hosted its finestVARBusiness 500 event ever. We had a record turnout for an expanded version of the event, which was again held at New York City's Rainbow Room. Nearly 60 top-level VARBusiness 500 executives came for our morning Executive Roundtable. That was followed by a luncheon, featuring Wall Street analyst Robert Anastasi from investment banker Raymond James. Anastasi focused much of his attention on the industry's major distributors, along with CDW and Insight. He was awestruck by the power and size of some VARBusiness 500 firms, and was stunned to learn the number that is growing in excess of 20 percent annually. The morning also featured private sessions among the VARBusiness 500 executives and top channel managers from IBM, Symantec and Samsung, which brought in its president, YJ Park, so he could spend some time with these influential solution providers.

Later, Rudy Giuliani provided star power as our dinner keynote speaker. The Rainbow Room was at full capacity--I didn't even get a seat--for the 107th mayor of New York City, who spoke about leadership and his handling of the attack on the World Trade Center on Sept. 11, 2001. Giuliani received thunderous applause and a standing ovation. While he wouldn't comment on his presidential aspirations, he did say he doesn't understand why Republicans and Democrats must disagree so vehemently and get so nasty. In some cases, he said, debates over reducing deficits have valid points on both sides.

We honored some 17 VARBusiness 500 firms for outstanding performance. Also of note, VARBusiness named Logicalis CEO Mike Cox VARBusiness 500 Executive of the Year and Ciber VARBusiness 500 Company of the Year. Mac Slingerlend, Ciber's CEO, made an emergency stop in the Big Apple just to accept his award. Though nearly out of breath, he took to the podium to pay tribute to those with whom he works. It was an unforgettable night. We're looking forward to next June's VARBusiness 500 event, which we hope will be bigger and better than this year's.

For feedback on our cover story, or anything else, e-mail [email protected].