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Christmas Gift Guide
Tech Industry

Holiday goodies don't seem so sweet

With the dot-com bust and the relatively somber national mood, executives are likely to get a break from free-flowing gifts this year.

One of the oddest presents that Michael Cloutier received last year was a gift basket featuring a one-pound box of Peet's coffee.

It's not that Cloutier didn't appreciate the sentiment or dislike the idea of gourmet java. But the chief technology officer for Peet's Coffee & Tea had access to all the coffee he could stomach and didn't necessarily need a vendor to supply more beans. He left the basket in a public space for grazing co-workers.

"I wish all of these gifts would go away," Cloutier said. "Most of the stuff I give to my people and, if they don't want it, I set it out for others in the organization. The way (vendors) get my business is it has to be the right tool for the job, or I'm not interested."

The technology niche is renown for lavish--sometimes downright ridiculous--gift giving among executives, clients and potential sales leads. Hardware and software vendors are especially eager to play Santa Claus for chief information officers and chief technology officers, who often control multimillion-dollar purchasing budgets.

But CTOs and chief information officers are likely to get a break from free-flowing tchotchke this year. The relatively somber national mood in the wake of the Sept. 11 terrorist attacks has shifted holiday etiquette governing giving and receiving, making otherwise lavish or humorous gifts seem overly flamboyant or tacky. The sagging economy has also sapped travel and entertainment budgets at many tech companies, forcing salespeople to send more humble presents or simply cards, especially as budgets dry up toward the end of the year. And the widening specter of layoffs has put few tech workers--even those who survived downsizing rounds--in a festive mood.

"You don't want to have your sales staff giving out lavish gifts at a time (when) the company is having massive layoffs," said Kirk Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University. "And, at the same time, you don't want your CIO, CTO or CEO jetting off to Aspen (for an all-expense paid conference) while others at the company are left to suffer."

Tis the season to be frugal
The season's frugality is a stark contrast to the late 1990s and 2000, when relatively flush technology companies showered gifts on prospective clients and buyers. Gifts included crystal vases from Tiffany & Co. and Luis Vuitton purses, briefcases or luggage--often with tickets for European vacations or tropical cruises tucked inside.

Hot gifts from Christmases past range from kitschy Etch-A-Sketch tablets to DVD players (some including custom disks about the vendor's business). Other gifts attracted attention simply because of their bizarre nature: One tech honcho still scratches his head over the plastic human brain replica he received last year.

But it's tough to put an overall dollar figure on the tech industry's quick transition from Santa to Scrooge. At one online gift ordering company, Gift Services, the average gift order has decreased to $65 from $70 last year. Gift Services President Craig Bowen blames the downturn on corporate clampdowns of spending on entertainment budgets.

"There's been a big difference this year in who our corporate customers are," Bowen said. "We've seen a big decline in technology firms."

Many gift-weary technology executives say the new austerity is a welcome change. They insist they have never been swayed to purchase products from people simply because of a gift, however thoughtful or expensive, and many say they feel awkward receiving costly goodies from potential clients.

Most Fortune 500 companies have formal restrictions on the value of gifts executives can keep--some as low as $25 and others as high as $250 or more. The limits began in the military about two decades ago and have since spread to other industries, said Thomas White, director of the center for business ethics at Loyola Marymount University. Companies often e-mail workers a reminder about specific policies during the holidays, White said.

Some recipients dismiss high-priced gifts as little more than an attempt to bribe executives. They also say that many gifts are in poor taste.

Dawn Lepore, chief information officer with brokerage Charles Schwab, said she'd be happy if she never received another portable putting green--a particular favorite with vendors, even though Lepore doesn't play golf and doesn't plan to learn.

Lepore gives the unopened greens--and all other gifts--to her assistant, who sends back anything that is worth $100 or more. It's part of a solidly enforced ethical policy on gifts, said Jill Nash, a spokeswoman for Schwab's technology group.

Edgar Trainor, chief information officer with Paramount Pictures, says gifts have little bearing on business deals he cuts in the future. He usually receives a plethora of fruit baskets, which he puts in a high-traffic area near the coffee pots for workers who get the munchies.

Paramount employees must not accept gifts valued at $250 or more from current or prospective vendors, according to company policy. Employees are also forbidden from accepting any amount of cash.

Trainor said he hopes the seasonal thriftiness will spread into 2002 and beyond. He's even wary of free lunches from potential vendors.

"Fruit baskets are popular during the holidays, but vendors try things year round. Free conferences at very nice places...are something they try to do a lot," Trainor said. "I'm (reluctant) to go these conferences, or accept a lunch, because I don't want to be trapped. These are all marketing ploys to get you off to some secluded spot for (a moment) of your time, or (to) get their foot in the door."