VMware 'pressured' hotel to shut down tech event close to VMworld, IGEL sues resort giant VMware has been accused of slyly shutting down and evicting a partner's four-day tech event running this week alongside the VMworld US conference in Las Vegas. Just as IT industry bods were biting into their lunch at the Border Grill restaurant in the Mandalay Bay hotel during the second day (27 August) of enterprise software …
Unfortunately, behavior like that causes no surprise to people who live here and are familiar with MGM. The main difference between MGM and the owners of earlier times is that the Mob knew how to run a casino and show the customer a good time. The New York private equity funds that own MGM have made even the parking lot a profit center.
There are other conference facilities in town.
Neither had I and I used to pay close attention to the VDI space hoping, someday, that'd become the better idea whose time had come. [Yeah, right.] Looks interesting, possibly even worthwhile but can't tell until I kick the tires.
Free advertising for IGEL, even if the worst possible way.
@ Mark 110 Oooh, hello Mark! We're just dipping our toe into VDI using Igel thin clients and Citrix VDI, and CDW have done some work on our PoC so far. The Citrix guy from CDW we had really knew his stuff, the Nutanix part was a bit sketchy but we got CDW to fix the issues there (bridging, corp and public lan, Nutanix with an interface on each), but it got sorted well enough for the trial.
I might come pick your brains later,... : -)
I used to support quite a big set up of WYSE/Dell thin Clients. Was never truly happy with them.
The last few years we've been using IGEL thin clients. Best thin clients I've supported so far. Their management console is superior anything I've seen from the other vendors. The clients we have are past the expected lifetime, and they still keep running and running.
We're currently upgrading all our IGELs to newer Versions, not even considering any competitors (even tho we do have a lot of Dell stuff here). Recommended if you need a quality thin client that's also easy to manage.
Now I just wish I could oust VMware from our server room. Sadly, someone is too "religious" to allow for any other hypervisor (weirdly enough, we have quite a large setup of XenServers.. I'm sorry, I mean Citrix Hypervisor (unless they changed the name again....).. in our lab.
Well, looking onwards, we'll probably have to look for ways to do things cheaper. My contribution will be to ditch VMware from everything I have a hand in :)
A lot of shows have a problem with vendors trying to take advantage of their shows by hosting events in the hotels the show books (or right next door). For example, instead of paying the tens (or hundreds) of thousands of dollars to book a large booth at the show, someone might host an event at a nearby restaurant.
This is often called "outboarding," and is frowned on by basically the entire trade show industry. Lots of companies have been shut down in very similar situations. Most big convention hotels have policies against outboarding.
Yeah, you might be a "partner" of the exhibiting company, but in this case you're acting more like a competitor - and a somewhat disreputable one, at that.
They probably saved a couple of hundred thousand by hosting this at the restaurant, but now they've pissed off their "partner."
There's a similar practice called "suitcasing," where someone attends a show, doesn't pay for a booth, but runs around selling their products to attendees (spend $2000 for a badge an a hotel room, instead of $30,000 for a booth). Generally, if you get caught you immediately lose your badge, and are usually banned from ever attending that show again...
"This is often called "outboarding," and is frowned on by basically the entire trade show industry."
Be that as it may, but "frowned upon"is not a legal basis for action. Surely since IGEL is a VMWare partner who had exhibited at VMWorld in previous years, and VMWare staff were among those attending IGEL's event, then VMWare should have known that IGEL wasn't exhibiting at their show AND that they were holding their own show next door. In that case the approach to take would have been to have a polite chat with IGEM, or else ask MGM's restaurants / other venues to refuse IGEM's booking request.
But IGEL had contracts in place with the restaurant that were unilaterally broken by the restaurant, meaning the restaurant is itself liable. If the restaurant did this at the behest of MGM with the threat of not having their lease renewed, that is blackmail and MGM is liable for that. If VMWare pressured MGM (again maybe under threat of not hosting their event there again), that's also basically blackmail for which VMWare are liable.
Oddly enough, "outboarding" usually IS a basis for action.
When you look at the contracts big hotels make you sign when you do shows, one of those nice little clauses usually mentions outboarding, with "we can shut you down" language buried in there.
...and when you have an "independent" restaurant in a hotel, using hotel resources (like in-house AV), they're controlled by the same sort of language.
It's going to be really interesting when the lawyers for IGEL get to deal with all of the contracts they signed when they set this event up. It'll be friggin' HILARIOUS when they find out how many IGEL people had badges for the VMWare show, and if they were promoting the outboarding event at the show, IGEL could be hosed in even more ways.
Cirby, so if that's the case, shouldn't the restaurant have refused the booking in the first place? They didn't know? Sounds like it's their problem.
The way you describe it makes it sound like IGEL booked a peppa-pig convention, then secretly revealed their true selves at the last minute!
It's probably more the case that the restaurant assumed the group was part of the main convention, and didn't find out about it until the day of the show.
I've seen worse things at shows. Like a major company shipping their entire $500,000 booth to the wrong continent, and finding out the day AFTER setup was supposed to start.
"Cirby, so if that's the case, shouldn't the restaurant have refused the booking in the first place?"
And this is likely EXACTLY what happened. There was likely an agreement in place with VMware that no other vendor conferences could be held on MGM property during VMworld. MGM screwed up and booked the event with IGEL. VMworld's attorneys reminded MGM of that fact (and rightly so) once they caught wind that there was another conference on-site, and MGM responded in this way to prevent a breach of contract suit. I agree that MGM didn't handle this well though.
At the end of the day, this is an MGM issue, not a VMware issue. IGEL should have known better than to attempt outboarding during the conference.
Okay, but there's only so far that this can go. Holding an event at the same time in the same place due to most of your prospective customers being there is not exactly a bad idea. Being forced into noncompetitive business practices due to attendance at the VMWorld event is all the justification they need for holding their own event nearby. Bullying venue owners into doing your corporate bidding by threatening their existence is unethical if not illegal.
IGEL literally did nothing wrong in circumventing Dell's restrictive rules by holding a separate event here, and Dell via MGM Resorts and Border Grill are the only ones who have actually done anything wrong. They should definitely be taken to the cleaners for this.
The "restrictive rules" are mostly just "pay for a booth, and if you want to host a larger event off-site, pay us some cash to advertise the event."
IGEL did a lot of things wrong, starting with "we're going to host a competing event at one of the contracted hotels for the show without reading the hotel contracts thoroughly."
@cirby:
"It's going to be really interesting when the lawyers for IGEL get to deal with all of the contracts they signed when they set this event up."
AND "...without reading the hotel contracts thoroughly."
So, should I infer that you work for MGM or their restaurant, since you seem to have access to the contracts that IGEL signed?
Or, alternatively, you're just speculating about what MIGHT be in those contracts, and thinking that IGIL's lawyers are so incompetent that they signed off on clauses that they knew they would be violating?
(Note - I'm not saying that's not the case, it could easily be that IGIL is in violation of some contract clauses. But given the lawsuit they're lobbing, how likely is that? )
I don't work for MGM or any hotel, but I have been involved with conferences, and any good event planner would have this in a contract. So I'm betting @cirby is correct. When we sold out hotels we had language that prevented companies not exhibiting with us from booking a suite and setting up their own off-floor demos, which drives attendees away from the exhibit floor and from the companies that paid.
If IGEL bought a booth and went through VMWare they probably could have had their lunch.
Restaurant managers are not privy to the details of contracts, or to the intricacies of the IT industry, and so may be excused for not knowing this could be a problem.
"Restaurant managers are not privy to the details of contracts, or to the intricacies of the IT industry, and so may be excused for not knowing this could be a problem."
They should absolutely not be excused.
If I enter into a contract with you, and then later find out that I contracted for things that I was restricted from providing because of a contract I had with someone else, then the problem is my fault, not yours. When I decide which contract I'm going to violate, I am fully on the hook for the consequences of nonperformance. You are blameless, and if I break the contract with you, then I should be paying you compensation for the damages you incurred.
StheD & Cirby, thanks for the replies. I am not l lawyer, and have had no dealings with event bookings from either side, so would have to bow to your experience.
However, as a layman, I'd have thought JohnFen was spot on. If the restaurant aren't privvy to the details of hotel contracts that can effect bookings they are allowed to make, then they damn well should be.
If the restaurant then makes a booking, and - as in this case - it turns out they shouldn't have, how can IGEL be to blame?
As I see it, when the events unfolded, they should have continued to honour their contract with IGEL, leaving vmware to demand compensation from the hotel for any failure to provide what was contracted.
I see it as the hotel totally screwing up here (after all, it's them that forced the restaurants actions) - they should have sucked it up, and dealt with any fallout that occurred. Kicking IGEL out mid-flow like that is just not on. - It makes IGEL out to be some sort of unreliable company that can't organise an event, and/or isn't a reliable payer. I think they are therefore fully justified to sue for losses, and damages to their reputation.
I certainly wouldn't now trust this venue to hold any event I was responsible for.
In an ideal world, I'd agree with you, but restaurants probably aren't tuned into this stuff. Now, if the hotel catering department handled it, I'd be less forgiving, since they are more directly connected to trade shows.
And it definitely could have been handled better.
That's as may be, but isn't it the venue's responsibility to let clients know the restrictions, and to avoid entering into contracts that they know damn well they can't fulfill?
The responsibility for this fiasco is entirely on the venue, not on IGEL. I think this lawsuit is very justified.
Been to more conferences than I care to recall at the Mandalay Bay, and walked past the Border Grill many times. I think the issue here is that IGEL's stands/posters weren't *in* the Border Grill - looks from the picture like they were stood up in the walkway past it .... which is the property of the Mandalay Bay. Hence the event inside the Border Grill was allowed to go ahead, but MGM took exception to the promo material in the corridor (because VMware's conference contract probably gave them branding rights to the public areas around the Mandalay Bay).
IGEL is not really a competitor of VMware's, though it is one for Dell. IGEL decided to ride on VMWare's coattails a bit, by hosting their own event on the side of VMWare's expo. So VMWare got pissy and had the hotel do their dirty work for them and shut down the event.
Yes, it kind of sucks for VMWare that other tech companies are doing stuff like this, but you have to realize that this is a mark of how successful VMWare is. IGEL is running their event to capitalize on all the people that come to Vegas for VMWare's event. If there is a an event like this that happens at conference hotels, and that violates VMWare's agreements with those properties, then VMWare needs to handle that with the hotel, not with the other tech company and tech industry professionals that are at the competing event. Now VMWare comes across looking like the Gestapo, and Mandalay Bay and the restaurant look like their flunkies.
And all these IGEL VIP customers--how many of them do you think are also VMWare customers, who were in Vegas at least largely to see VMWare's offerings? What do you think their opinion is of VMWare now? I'd be kind of mortified and pissed off if I was a tech professional at mid-lunch/preso and a bunch of guys came in and cleared me out. Obviously, anyone with two or more working brain cells can figure out that it was VMWare who was behind the thuggery. Now, they are going to associate that behavior with VMWare, whose expo they also came to see.
And VMWare has to be smart enough to realize that if they have their own contracts/agreements/etc. in place when they plan their event, then anyone else who is putting on an event with the amount of preparation that IGEL obviously had in place would also have their own contracts in place to facilitate all that preparation. Now, VMWare may end up being a "deep pocket" in this lawsuit, for forcing/encouraging Mandalay Bay to violate the contracts that were in place with IGEL.
In short, bad move VMWare. You get to come across as looking insecure and tyrannical. And the people you do this in front of are a group of tech execs who are either your customers or are prospects that are interested enough in your offerings that they will spend their time and money to come all the way to Vegas to see your own show! And you potentially end up getting named in IGEL's lawsuit, for tortious interference in getting Mandalay Bay to break up IGEL's party. For the record, stuff like this doesn't make IGEL look bad. They obviously had a lot of professional signage, presentations and catering in place to attract and engage their audience. Instead, it makes VMWare look bad for breaking all that up in front of a group of current/potential customers! Idiotic would not be too strong a word to apply to VMWare's behavior in this situation.
Now, maybe VMWare had language in place with Mandalay Bay to prevent something like this from happening, and IGEL's event somehow slipped under the radar. If that is what happened, then VMWare needs to deal directly with Mandalay Bay on that and make sure it does not involve IGEL and voiding the contracts it has in place, plus embarrassing a bunch of tech professionals who are most likely VMWare's own customers/prospects! And if VMWare didn't have the appropriate contractual language in place, then the correct approach is to note that and change that in the future, and not immediately get all pissy that someone else is capitalizing on the concentration of tech professionals that VMWare's event is pulling together.
They interfered with items that were the property of the organizers of the Disrupt event? There should be criminal charges as well. And the lawsuit should be dealt with in such a way that no hotel, acrossthe length or breadth of the United States, will dare, at least for the next three hundred years or so, to behave in a similar manner.
How about just handing over the entire equity and assets of MGM to the event organizers? That should be a sufficient deterrent.
As the CTO of a large corporation, I was one of those who was shuffled out of the restaurant. After meeting with the board, coming Tuesday, I am going to call the CEO of Dell Computer and tell him that he has lost our USD $30,000,000 contract, effective immediately. I will also tell him that we made the decision to switch over to a IGEL/Citirx setup as well. I will also explain why.
I don't fault VMware/Dell for thugging it up, really. I used to attend CES regularly, but the outboarding has gotten so bad that it's just not worth it anymore. 95% of the product launches and events that get massive press coverage have nothing to with the show itself, they're all at offsite venues with a wall of bouncers to ensure that access is limited to a hand-picked list of tame media mouthpieces pledged to say and do exactly what the marketing department tells them. Those who've been around will likely remember that it's the same set of bad actors that did it to Comdex, too.
Quite a shame, because I rather like Las Vegas. A more magnificent temple to man-as-god I've yet to see.
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