The 10 Biggest News Stories Of 2022 (So Far)

Many of the biggest news stories this year, including supply chain disruptions, economic uncertainty and the adoption of hybrid work-from-home practices, are repercussions from the COVID-19 global pandemic.

Turbulent 2022

With summer vacations over and everyone back to work, here’s a look at what have been the biggest news stories so far in the IT industry and the channel in 2022.

COVID-19 itself may have faded as a top story. But several of the top news stories this year stem from the ongoing repercussions of the global pandemic and its impact on the economy, the IT industry and the channel.

Continued supply chain disruptions, for example, have been a major challenge for the industry. Shortages of semiconductors, components and finished systems have left IT vendors and solution providers scrambling to meet their customers’ needs. And with IT products needed to run on-premises data centers sometimes unavailable for weeks or months, some see the supply chain problem accelerating the adoption of cloud services.

Economic uncertainty is keeping many IT and channel executives awake at night as they watch for any signs of slowing sales or customer pullback. Some IT companies, from giants like Oracle and Avaya to startups, have initiated cost-cutting efforts and laid off employees.

And in a major shift in how businesses operate, the work-from-home and hybrid work practices imposed by the pandemic on millions of workers now appear to be at least semi-permanent. And that means changes – and opportunities – in the IT products and services the channel provides.

Some of this year’s biggest news stories involve blockbuster acquisitions that are changing the face of the IT industry and the channel. Some, like AMD’s $49 billion buy of Xilinx – the largest acquisition in the history of the semiconductor industry – are done deals. Others, like Broadcom’s pending $61 billion deal to buy virtualization giant VMware, are pending.

The ongoing threat of malware, ransomware and other cyberattacks against businesses, government agencies and IT companies remains a major story with managed service providers a frequent target. Changes in Microsoft’s channel program and practices and their impact on partners have made headlines this year. And how the IT industry has responded to the war in Ukraine rounds out the top stories.

Here’s our look at the top 10 news stories of 2022 (so far), starting with No. 10 and counting down to No. 1. Take a look and see if you agree with our choices.

10. IT Companies Shutter Russia Operations In Wake Of Ukraine Invasion

On February 24, Russia shocked the world when it launched an attack on neighboring Ukraine, sparking a war that has dragged on for more than six months. The invasion spurred a wave of denunciations, economic sanctions and other actions, primarily from the U.S., Canada and European countries.

In the days and weeks following the invasion, many of the IT industry’s biggest companies began to disengage from Russia in protest of the invasion. Initially, many halted sales of IT products to Russia and then, over time, shut down their operations within that country.

Just days after the invasion Dell Technologies announced that it had suspended all product sales to Russia. “It’s a great tragedy and very disappointing to see a humanitarian disaster,” CEO Michael Dell said in an interview with CRN. “On everybody’s mind is the situation in Ukraine. Obviously, we’re thinking about all those that are affected and focused on the welfare of our team. That’s our top priority. It’s a horrible situation.”

A short time later Dell committed $15 million to support Ukrainian families through the Michael & Susan Dell Foundation. (On Aug. 29 Dell Technologies announced that it had closed all of its offices in Russia and ceased all business operations within the country.)

In the immediate wake of the invasion many IT vendors instituted sales bans on Russia and halted product shipments to the country including HP, Hewlett Packard Enterprise, Microsoft and IBM-owned Red Hat. In the following months as the war dragged on, IT vendors -- including HP, HPE, Cisco Systems, Microsoft and IBM -- all announced plans to close their offices in Russia and cease all operations there.

Some of the industry’s biggest systems integrators and solution providers also shut down their business operations in Russia. Accenture said it would discontinue its business in Russia and made plans to support its 2,300 employees within the country. DXC Technology exited the Russian market in April and relocated many of its 4,000 Ukrainian workers to safer areas. And EPAM Systems announced in early April that it would exit its Russia business, a task it estimated would take three months.

9. AMD Completes $49 Billion Xilinx Buy In Semiconductor Industry’s Biggest Acquisition

On February 14, chipmaker AMD completed its acquisition of Xilinx, allowing AMD to expand beyond its core CPU and GPU product lineup to add reprogrammable chips, called field programmable gate arrays, to its technology portfolio.

The acquisition is already paying off: In August, AMD reported that Xilinx revenue accounted for 51 percent of its $6.55 billion in revenue in its second quarter.

Going forward the acquisition is expected to significantly expand AMD’s opportunities in data centers, embedded computing and telecommunications. Xilinx also had a presence in other markets including defense, broadcast and consumer electronics. Altogether the acquisition grew AMD’s total addressable market to $135 billion from $80 billion, according to the company.

The cost of the all-stock acquisition deal was originally $35 billion when it was announced in October 2020. But the double-digit growth of AMD’s share price since then boosted the deal’s final price tag to $49 billion – the largest acquisition deal in the history of the semiconductor industry.

AMD’s successful Xilinx acquisition was in contrast to the failed effort by rival Nvidia to acquire British chip designer Arm for $40 billion. Nvidia abandoned that deal in February in the face of regulatory opposition.

Intel, meanwhile, has taken steps in 2022 to aggressively expand its chip manufacturing capacity, including striking a deal in February to buy Israeli chipmaker Tower Semiconductor for $5.4 billion. Tower operates a network of chip manufacturing plants that Intel said will significantly advance its plan to manufacture chips for other companies through Intel Foundry Services.

8. Hybrid Work/Work-From-Home Is Here To Stay

On Aug. 29, HP Inc. completed its blockbuster $3.3 billion acquisition of Poly, a provider of videoconferencing equipment, cameras, headsets and other audio peripherals. The big idea? Combining Poly’s product line with HP’s own portfolio of desktop and laptop PCs, printers and other accessories will make HP the go-to vendor for supporting hybrid work models and work-from-home employees.

“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” said HP CEO Enrique Lores in a statement extolling the HP-Poly match. “Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets.”

When the COVID-19 pandemic hit in early 2020, millions of office workers were confined to their homes. That created a huge surge in demand for laptop and desktop PCs, collaboration applications, videoconferencing services and other products that solution providers scrambled to provide.

Most everyone assumed that work-at-home would be temporary. But the pandemic lasted far longer than many expected and – surprise – many workers discovered they preferred working from home. While offices have reopened around the nation, many businesses and organizations have adopted a hybrid work model where employees split their time between their home office and “The Office.”

In June HP released the results of a survey of 1,000 office workers in the U.S. and Canada that found that 68 percent of employees expect to work from home at least three days a week.

“The digitalization trend continues to accelerate and the hybrid work model is here to stay,” said Lenovo CEO Yang Yuanqing during an earnings call in August.

The hybrid work model is creating opportunities for solution providers as well as vendors. NWN Carousel debuted its Hybrid Work Suite in January, followed in April with the consumption-based At-Home Essentials and Office Collaboration Room-as-a-Service kits.

“During the pandemic we saw organizations in triage mode of sustaining business with work at home,” NWN Carousel Chief Marketing Officer Andrew Gilman told CRN. “Now hybrid work is real and customers are looking at how do they make hybrid work actually work. It is no longer about swiping a credit card and getting by. It is about the employee experience being consistent whether you are working at home or coming to the office. It has to be consistent, frictionless and something that actually works and is sustainable.”

Some businesses and their CEOs have taken steps to attempt to force workers back to the office – one such battle at AT&T has been getting a lot of attention. But in a LinkedIn post on Sept. 7, none other than Dell Technologies CEO Michael Dell chided his fellow CEOs for that approach.

“From my experience, if you are counting on forced hours spent in a traditional office to create collaboration and provide a feeling of belonging within your organization, you’re doing it wrong,” Dell said.

7. Google Buys Incident Response Superstar Mandiant For $5.4 Billion

The security segment of the IT industry has seen a lot of merger and acquisition activity this year including Cloudflare’s $162 million acquisition of Area 1 Security and Ping Identity’s deal to be taken private by Thoma Bravo for $2.8 billion.

But perhaps the most notable acquisition in IT security this year, so far, is Google’s acquisition of incident response technology developer Mandiant for $5.4 billion in what observers see as a move to compete with Microsoft and Amazon Web Services. (Microsoft reportedly was considering a bid to buy Mandiant before Google’s deal.)

Acquiring Mandiant will significantly expand Google’s cybersecurity capabilities in real-time threat intelligence and incident response. Google Cloud CEO Thomas Kurian said his company plans to “reinvent security” for Google Cloud customers with the acquisition.

The deal was announced in March just four months after Mandiant sold its network, endpoint and email security product business to Symphony Technology Group for $1.2 billion. The acquisition closed Sept. 12.

6. Microsoft Partners Wrestle With Channel Program Requirements, Management Changes

It’s been a turbulent 2022 for many of Microsoft’s 400,000 channel partners as the software giant makes some of the biggest changes to its partner program since the Microsoft Certified Solution Provider program launched 30 years ago.

At the heart of the controversial changes is Microsoft’s New Commerce Experience (NCE), which sets the rules for how customers buy and renew commercial software subscriptions through partners. Microsoft began enforcing NCE requirements for new deals in March.

Some partners have struggled to adapt to the myriad of NCE changes, which impose stringent software licensing requirements and an accompanying 20 percent premium on monthly commitments for popular Microsoft software packages. Partners say the changes force them to renegotiate terms with customers and pushes partners and customers into annual subscription commitments instead of monthly ones.

The software giant has also repeatedly delayed the timeline for moving legacy subscriptions to NCE.

Partner Capability Scores, another major change to the partner program set to start in October, will be used to determine who qualifies as a Microsoft solution provider. That has some partners scrambling to figure out how they can earn enough points to maintain their partner status under the new program.

In March partners launched an online petition disapproving of the program changes, calling the new scoring requirements “impossible” to meet. A CRN poll of 160 Microsoft partners conducted midyear found that 27 percent were dissatisfied or very dissatisfied with NCE, the new partner requirements and the changes in partner requirements. An equal number were more dissatisfied or significantly more dissatisfied with Microsoft as a partner than one year before.

Microsoft’s channel leadership itself has undergone changes. Rodney Clark, Microsoft’s channel chief for more than a year, left the company in May. His duties were split between David Smith, vice president of channel sales, and Julie Sanford, vice president of go-to-market, programs and experiences. Nicole Dezen is chief partner officer and corporate vice president of the Global Partner Solutions organization.

During a fourth fiscal quarter earnings call in July Microsoft Chief Financial Officer Amy Hood said “partner transition work” had a negative effect on sales growth among small and midsize business customers, including for paid Office 365 commercial seats, the Enterprise Mobility + Security business, and Windows commercial products and cloud services revenue.

In late August Microsoft even came under fire from cloud rivals Amazon Web Services and Google who said that changes to Microsoft’s Services provider Licensing agreements were anti-competitive and would lock customers into Microsoft’s cloud. Microsoft recently announced program policy changes around outsourced infrastructure hosting after the company’s software licensing policies stirred controversy in Europe.

The changes have continued into September with the announcement of a 16.7 percent discount promotion for new and upgrading Microsoft 365 customers, a new Teams Rooms Pro offer and changes to the Partner Center user interface – all coming just weeks before Microsoft’s upcoming Ignite developer conference in October.

5. IT Companies, Solution Providers And MSPs Battle Ongoing Wave Of Cyberattacks

On July, SHI International, a leading global provider of IT products and services, disclosed that it had been the target of a “coordinated and professional” malware attack over the Fourth of July weekend that disrupted the company’s systems and operations.

SHI said that its IT and security teams reacted quickly to minimize the attack’s impact and said there was no evidence that customer data were stolen or third-party systems affected. But it wasn’t until July 11, nearly a week after the attack (and after calling in a forensic expert and law enforcement to investigate), before the company said that the “vast majority” of its internal and external-facing systems were fully operational.

The SHI attack was one of many cybersecurity incidents so far in 2022, including a growing number of malware and ransomware attacks, that the IT industry and the channel – especially managed service providers – have had to defend against.

Ransomware attacks surged by 37 percent in 2021, according to the results of a Sophos survey reported in May. At the RSA conference in June the SANS Institute listed the five most dangerous cybersecurity attack techniques including using cloud services as attack platforms, attacks involving stalkerware against mobile devices, and attacks against multi-factor authentication, system backup and communications satellites.

Cybercriminal organizations have become so proficient that they have begun selling malware kits to amateur hackers for less than $10 and compromised credentials for under $5, according to a report from HP Inc. In a presentation at the August XChange conference (put on by CRN parent The Channel Company), Douglas Bailey, Xcitium EVP of business development and global alliances, told the audience that more “mom and pop” ransomware attackers are going after SMB targets.

MSPs are particularly in hackers’ sights. In May cybersecurity provider ThreatLocker warned MSPs of a sharp increase in ransomware attacks using remote monitoring and management (RMM) tools. That same month international and U.S. cybersecurity authorities said they were aware of recent reports observing an increase in “malicious cyber activity targeting” MSPs and warned that they expected it to continue with stepped-up attacks against managed service providers.

At The Channel Company’s XChange Security conference in July experts from ThreatLocker, Huntress Labs and PhishFirewall issued stark warnings of brazen new attacks against IT service providers. And at the same conference Joy Beland, a cybersecurity consultant at Edwards Performance Solutions, said that MSPs and other channel players who fail to significantly beef up their cybersecurity measures to meet more stringent security regulations would become competitive “roadkill.”

Software vulnerabilities have also continued to be a problem. In January MSPs were warned to be on the alert after a Log4j vulnerability was discovered on VMware Horizon servers. In March HP warned that hundreds of its print and digital sending products could be vulnerable to remote code execution and buffer overflow. In April Lenovo offered a patch for millions of laptops that were vulnerable to malware and other attacks. And in May Microsoft confirmed that its Office software contained a zero day vulnerability called “Follina.”

4. IT Companies Commence Layoffs, Cutbacks In Uncertain Economy

In May Sequoia Capital, one of Silicon Valley’s top venture capital firms, issued a warning (in the form of a 52-slide presentation) to startups that the IT industry was in a “crucible moment” of economic uncertainty. The missive recommended that startups Sequoia had invested in cut costs or face a possible “death spiral.”

News of the Sequoia alert set off alarms throughout the IT industry, which has struggled all through 2022 to gauge the state of the U.S. and global economy. Rising inflation, falling stock markets, low unemployment, two quarters of negative GDP – IT vendors and solution providers have tried to decipher the mixed economic news and square them with their own financial performance and customer demand.

Few IT vendors have reported significant signs of customer spending slowdowns. Hewlett-Packard just reported a small gain in revenue (to $7.0 billion) in its fiscal third quarter. High-flying cybersecurity tech develop Crowdstrike reported a 58 percent jump in revenue (to $535.2 million) in its recently completed fiscal second quarter. And in July Apple reported better-than-expected revenue for its fiscal second quarter.

The year, nevertheless, has seen a steady stream of layoffs and spending cutbacks from IT companies large and small. Oracle began employee layoffs – which reportedly could number in the thousands – in August in a move to cut up to $1 billion in costs. Hyperconverged infrastructure software provider Nutanix laid off 270 employees in August citing the “challenging macroeconomic environment” and supply chain disruptions. And unified communications giant Avaya just began a “significant” round of cost-cutting measures – including an undisclosed number of layoffs – to reduce expenses by $250 million.

In July Microsoft confirmed some layoffs and the elimination of open jobs in its Azure and security businesses. The same month Google CEO Sundar Pichai said the internet giant would slow its hiring pace through 2022 and 2023.

Employees at small and startup cybersecurity companies seemed to be hit particularly hard with layoffs, including job cuts at Cybereason, Malwarebytes, Lacework, Snyk, Liongard, Automox, OneTrust and Ironet.

As the IT industry makes its way through the second half of 2022, the economic picture doesn’t appear much clearer with recent IT vendor financial results indicating anything from a cooling off to the start (or continuation) of a recession.

On Aug. 25, Dell Technologies reported fiscal 2023 Q2 solid revenue growth, but also saw slowing demand in its PC business and announced hiring limits. One day earlier cloud software giant Salesforce also reported revenue growth for its fiscal 2023 Q2 but reduced its revenue guidance for the year amidst “measured” customer buying and slowing demand for some products. And on Aug. 30 HP Inc. said “worsening consumer demand” for notebooks and other devices led to a 4.1 percent revenue decline in its fiscal 2022 Q3.

3. Kaseya Acquires Rival Datto In $6.2 Billion Deal

Kaseya, a developer of IT management tools used by businesses and managed service providers, shook up the MSP space on April 11 when it announced an all-cash deal to acquire rival Datto for $6.2 billion.

Combining two of the biggest MSP-focused platform providers is expected to put competitive heat on rivals ConnectWise and N-able in such areas as remote monitoring and management, security and professional services.

Kaseya CEO Fred Voccola touted the acquisition as providing its global customers with “more functional, innovative and integrated solutions.” Datto CEO Tim Weller said the deal “brings together a broader array of technology products to create additional opportunities for MSPs.”

But the acquisition has been controversial with concerns about the impact on Datto employees and that company’s MSP-focused culture. A frowny-face emoji reaction to the deal posted three days after the announcement ignited a social media firestorm that included vitriolic comments berating Kaseya.

In an interview with CRN two weeks after the acquisition deal was announced, Voccola tried to assuage the fears and criticisms, saying Kaseya was firmly committed to investing in Datto’s strong channel culture, product set and brand and said there were no plans to shutter any Datto offices.

“We’re spending $6.2 billion to buy an awesome company,” Voccola said. “We don’t buy companies to gut them for profit. Every acquisition we’ve done, we’ve doubled or tripled or in some cases quintupled the amount of investment in the products and support in the business. We’re not buying Datto to destroy it. We’re buying Datto because we want to get better at that, and Datto is the best, so we buy the best.”

The acquisition was officially completed on June 23. That week at Kaseya’s ConnectIT conference Voccola sought to reassure Datto employees, partners and customers and provided more details about Datto management changes – including the departure of CEO Tim Weller – and plans for combining the Kaseya and Datto technology portfolios. “It’s our job to make sure that we build the best freaking platform for our customers because they rely on us to make sure it’s complete,” he said.

But closing the deal didn’t end the controversies. Datto founder and former CEO Austin McChord posted a blistering diatribe on GitHub and LinkedIn saying that post-acquisition changes were damaging the Datto Culture. Kaseya CFO Kathy Wagner later issued a statement disputing McChord’s comments, then a July 7 “town hall” meeting hosted by Voccola turned raucous.

2. Broadcom To Acquire VMware In Blockbuster $61 Billion Deal

On May 26 Broadcom, a $27-billion supplier of semiconductor and infrastructure software products, and virtualization giant VMware disclosed an agreement for Broadcom to acquire VMware in a cash-and-stock deal valued at $61 billion. The announcement confirmed circulating reports of acquisition negotiations between the two companies.

If completed, the acquisition would be one of the biggest in the history of the IT industry: Dell Technologies’ 2016 acquisition of EMC had a $67 billion price tag. VMware is the industry’s virtualization technology leader and is a major player in the market for hybrid-cloud and multi-cloud software. And the deal is likely to impact VMware’s hundreds of channel partners.

The acquisition deal came less than seven months after VMware, which had been majority-owned by Dell Technologies since 2016, became an independent, publicly traded company.

“Together with Broadcom, VMware will be even better positioned to deliver valuable, innovative solutions to even more of the world’s largest enterprises,” said Dell Technologies CEO Michael Dell, in a statement. (Michael Dell retained a 40-percent stake in VMware following its spinoff.) “This is a landmark moment for VMware and provides our shareholders and employees with the opportunity to participate in meaningful upside.”

“By adding VMware, we will bring significant scale to Broadcom’s software business, and reinforce our position as a premier provider of mission-critical platform solutions to enterprises globally,” Broadcom CEO Hock Tan told investors at the time of the announcement.

A 40-day go-shop period, during which VMware could consider other acquisition offers, ended in early July with no other suitors. The companies expect to complete the acquisition during Broadcom’s fiscal 2023, which begins Nov. 1, 2022.

Broadcom plans to integrate its current software portfolio with VMware, including technology from its earlier acquisitions of Brocade Communications Systems, CA Technologies and the Symantec enterprise security business. The company intends to invest in VMware partners, engineering and sales, Broadcom Software Group President Tom Krause promised in a blog post in June.

But VMware partners, customers, employees and other stakeholders have expressed skepticism about VMware’s future as part of Broadcom. VMware employees, at an online town hall in May following the acquisition news, voiced concerns about cultural synergies and asked: “Why should we stay?’ And a top executive at one national VMware partner, in an interview with CRN, had a message for Broadcom: “It’s a pretty simple message really: Don’t screw VMware up by forgetting about the partners.”

The acquisition has already hit one bump in that Krause, who was expected to lead VMware post-acquisition, left Broadcom on July 15 to become CEO at Citrix Systems, running that company and its Tibco Software acquisition.

Perhaps more unsettling for VMware partners, channel chief Sandy Hogan announced her departure from the company in June to take a job with SADA Systems, a leading solution provider and Google partner SADA Systems. And on Sept. 1 North American channel chief Bill Swales disclosed that he was leaving VMware for a new job at Lenovo.

Broadcom executives have sought to reassure all stakeholders that the deal is on track. CEO Hock Tan, who assumed management of the company’s Software Group when Krause left, issued a letter to all VMware employees saying that “Broadcom is steadfast in our commitment to reimagining what we can deliver for our customers together.”

Broadcom president Sumit Dhawan prefaced a series of product and technology roadmap announcements at the VMware Explore conference in late August by saying that “these innovations are here to stay.” And earlier this month Tan, during a Broadcom earnings call, said the VMware acquisition deal was making “good progress” in gaining necessary regulatory approvals.

1. Supply Chain Disruptions Create IT Product Shortages, Accelerate Cloud Adoption

Supply chain disruptions, leading to product shortages and order backlogs, created major challenges for the IT industry in 2022 as vendors and solution providers worked to meet customer demand for servers, PCs, mobile devices and other systems.

And as the year progressed, there’s been growing evidence that supply chain problems may be having a more fundamental impact on the IT industry by accelerating the migration to cloud-based computing.

Supply chain problems were evident as early as the first year of the COVID-19 pandemic and became fodder for the nightly news in 2021 as container ships waited in line off the California cost to unload their goods. But disruptions in supply chains have really hit the IT industry in 2022.

In February, for example, Xerox warned that it had a $300 million order backlog that it could not ship because of supply chain issues. That same month, Dell Technologies said it was feeling the impact of shortages of integrated circuits and other components, including network controllers and microcontrollers, that go into the company’s PCs, servers and storage systems.

In April Apple said production shutdowns by key manufacturers in China could result in an $8 billion hit to sales this year. (The company’s Q2 results in July indicate the hit won’t be that severe.) In May Lenovo warned that COVID-19-related production shutdowns in China would slow product shipments. And in July, citing supply constraints and logistics problems, market researcher IDC said global PC shipments fell 15.3 percent in the second quarter.

Some are battling back. HP Inc., which reported a $10-billion order backlog in 2021 due to supply chain disruptions, has hired a chief supply chain officer who is taking such steps as revamping the company’s ERP systems and developing better supply chain monitoring and forecasting processes.

Solution providers and MSPs are also finding ways to survive – and even thrive – amidst supply chain challenges. World Wide Technology CEO Jim Kavanaugh told CRN that his company tries to help customers better anticipate long-range requirements while being “creative” to meet their more immediate “mission-critical” needs. MSPs at the recent XChange conference (put on by CRN parent The Channel Company) said they are battling the supply chain problem by tackling infrastructure upgrades in smaller chunks, working with customers to develop multi-year IT plans, and encouraging cloud adoption when products for on-premises systems aren’t available.

And that last trend may be the ultimate impact of the supply chain problem: An acceleration to the cloud (infrastructure-as-a-service, platform-as-a-service and software-as-a-service) by businesses and organizations who are unable to buy the equipment they need for on-premises data centers.

“When customers can’t get HPE, Cisco, Dell for months – sometimes we‘ve had customers that can’t get it for quarters – then what are you going to do? You’re going to spin it up in the cloud,” Jason Geis, CEO and co-founder of CloudWerx, a fast-growing Google Cloud partner, told CRN.