Monday, August 25, 2003

Software

Ware-Withal: Wrongly suspected Ptech, CEO bounce back slowly

By Elizabeth Dinan

Oussama Ziade's business has suffered millions in losses this year, none of which can be attributed to a limp economy. His lost millions can be attributed to his devastated professional reputation, due to a bogus tip to federal investigators and ensuing bad press.

Really bad press.

On Dec. 4, Ziade's business, Ptech, had been recognized as one of the 10 Companies That Matter by KMWorld for three years running, as well as one of the fastest-growing tech companies in New England by Deloitte & Touche. Ptech is a global supplier of software that helps clients visualize and analyze tech infrastructure and builds models for business planning. Clients include governmental agencies such as the FBI, the IRS, the Federal Aviation Administration and the Secret Service.

Business was good until Dec. 5, when Ptech was visited by federal investigators acting on a tip that a company investor had links to al Qaeda and that Ptech may have designed a back door in its software allowing terrorist entry to the above-named clients' databases. Ziade cooperated, saying he had nothing to hide, while the government took measures to come late at night, in the hope that its visit would be stealthy.

It wasn't.

The following day, Ziade opened the newspaper and saw his photo next to a story describing a "raid" on Ptech to investigate possible terrorist links. He became "really scared."

"It was a nightmare. I took my family out of the house immediately," he says. "I thought, what if someone comes to my house? I was in a bad situation."

It would be 30 days before he'd sleep through the night. In the meantime he had to lay off dozens of employees, because in the following two months business fell off by $3 million.

It seemed many customers didn't want to do business with a perceived terrorist sympathizer, while those who knew Ptech and its founder extended kindness.

The principal of the school attended by Ziade's children suggested security measures. The cafeteria in Ptech's office building offered free lunch day for Ziade's employees. Neighbors offered kind words, as many in the industry called to offer support, though often with a disclaimer that it would be private support.

By March, things started to get a little better. Word came directly from the White House, making official what the feds thought all along - that there is no terrorist connection to Ptech, nor was there ever any back door in the software.

In April, Ziade went to the Enterprise Architecture Conference, which his company used to sponsor but could no longer afford to. He held his head high and got word out that he was still in business.

Reputable analyst firms, including Meta Group, Gartner, Delphi and Forrester, called to say they would do what they could to support Ptech. But there would be no corrections or clarifications in the newspapers that originally reported the bad news.

"I worked for 10 years trying to serve this country, not just doing it for the money," says Ziade, a naturalized citizen and graduate of both Harvard and BU. "We spent every penny we have solving a problem in the business world."

Last week the Ptech founder and CEO said his business is slowly coming back and calculated the bottom line at about 60 percent of what it was before the public thrashing.

"It's $5 million in loss so far, compared to last year," he says. "And this market grows 20 percent a year."

Meanwhile, there's no one to hold accountable. The government has immunity, Ziade has been advised, adding that the press is hard to beat.

"This is one of the things I realized," he said. "You can be victimized and no one is held accountable."

He's also discovered the competition is using the misinformation about his company as a business advantage. For damage control, Ziade considered renaming the company, but analysts warned that Ptech has a lot of brand value, that renaming might make some think he's got something to hide and that he could wind up re-educating the market about his product all over again.

If his name were Joe and not Oussama, might this never have happened?

"How can I say and be accurate? I don't know," says the man friends call "the good Oussama."

But he does know that the experience isn't going to keep him from going forward when others might turn to vice, or worse.

"We will continue to be back in business," Ziade says. "We believe in what we do and are not prepared to let go. When you see the support the people give you, you know this country is blessed in goodness. People like us are in the construction business. Terrorists are in destruction. We should be like mountains and send a message that you cannot hurt us."

To that end, Ziade will sponsor the November conference in Arizona and hopes to be back to 100 percent by the end of the year. He says he has faith and hopes to be as big as Microsoft within a decade.

But the momentum of the highly publicized false accusations early last December and the aftermath will forever puzzle him.

"Who thought this could happen to us?" he asks. "We're good people."

Elizabeth Dinan reports on hardware and software. She can be reached at edinan@masshightech.com.