5 Companies That Had A Rough Week

This week's roundup of companies that had a rough week include sinking sales for a major PC manufacturer and the resignation of its CEO, a lawsuit against a flash storage technology vendor, the latest bad news about a major security data breach at Adobe, and signs of a growing rift between Cisco and VMware.

Acer chairman and CEO J.T. Wang will step down while the company undergoes what it described as a "comprehensive restructuring and transformation" amid plummeting PC sales. Acer said Jim Wang, a 27-year Acer veteran, would take over as CEO in January.

That news followed the No. 4 PC manufacturer's third-quarter earnings report that included a $446 million loss and plans to lay off 7 percent of its workforce to cut costs.

Acer has been among the hardest hit vendors in the contracting PC market. According to IDC, the company was hit with a 33 percent drop in worldwide PC shipments in June, compared to one year earlier, a bigger decline than Lenovo, Hewlett-Packard and Dell experienced.

Flash storage startup Pure Storage was on the receiving end of a lawsuit this week in which EMC charges that Pure Storage hatched a "deliberate scheme" to acquire EMC intellectual property by hiring 44 former EMC engineers and sales representatives.

EMC said the employees, who were under agreements not to disclose confidential information about EMC products and customers, departed "under suspicious circumstances" to Join Pure Storage.

Pure Storage CEO Scott Dietzen released an open letter Tuesday to "current, prospective and future" customers and partners about the litigation, in which he wrote: "We at Pure believe there is no merit whatsoever to any of these complaints."

Software developer Adobe said this week that a data breach of its IT systems last month was much worse than the company initially thought and may have compromised credit card information for nearly 150 million people.

Originally, the company said hackers stole the personal data of 2.9 million people, including customer names, encrypted credit and debit card numbers and other information related to customer orders.

But now the company believes the security breach compromised data for at least 38 million active customer accounts. The hackers stole a file with information about millions of inactive accounts. That, according to a story in The Guardian, means that as many as 150 million people could be affected. The story said Adobe encrypted all the passwords with the same key and used a method that renders the encrypted data insecure.

VMware this week endorsed rival Cisco's entry into the software defined networking market, then found its own NSX offering being called into question by Cisco Development and Sales President Rob Lloyd (pictured).

Lloyd claimed Cisco's Application Centric Infrastructure support for both physical and virtual networked IT resources is a competitive "game changer" versus VMware. What's more, he questioned VMware's ability to support a multivendor hypervisor environment that includes Hyper-V.

Chris King, VMware vice president of product marketing for networking, said in an interview that Cisco asked VMware to be listed as a supporting vendor for ACI, and VMware agreed because it was the right thing to do for customers. "Customers need to see that we are working together so they feel confident in the investments they've made in each company's solutions," King told CRN.

While the two vendors have gone to great lengths to portray Cisco and VMware as working together to bring software-defined networking to customers, partners see a widening rift between the two companies.

Internet Archive, the San Francisco-based nonprofit digital library, suffered a setback this week when a raging fire heavily damaged the organization's scanning center and its sophisticated digitization equipment, valued at $600,000, according to a Slate story.

Internet Archive's goal is to back up and preserve wide swaths of the Internet, as well as books and movies, and make them available through such tools as the popular Wayback Machine. The organization is seeking donations to help it rebuild the scanning operations.

The good news is that the fire did not damage Internet Archive's main building, where its data is stored, as well as some 500,000 books and movies the organization plans to digitize.