5 Companies That Had A Rough Week

The Week Ending Feb. 13

This week's roundup of companies that had a rough week includes a major solution provider whose earnings have taken a hit from changes in Microsoft's partner program, another key executive defection by Ingram Micro, AMD's channel inventory woes, a Q3 sales shortfall at a leading systems integrator, and Google's decision to shutter an under-performing service.

Insight Expects Second Multimillion-Dollar Hit From Microsoft Partner Program Changes

Insight Enterprises said this week that it expects to take a multimillion-dollar hit to its 2015 earnings because of changes Microsoft made to its partner compensation model last year. Those changes reduced the gross profit for Insight's North America software business by $11 million to $14 million in fiscal 2014.

Early last year Microsoft began making cuts to its cloud sales commissions for partners, including Office 365 incentive fees, causing outrage among partners who rely on those commissions. The changes particularly impacted Microsoft Licensing Solution Providers such as Insight, the only type of partner Microsoft allows to sell enterprise volume licensing agreements.

Insight said the Microsoft changes could reduce overall profit in fiscal 2015 by $5 million to $10 million.

Ingram Loses Another Key Exec To A Competitor

For the second time in four months, a high-ranking executive at distributor Ingram Micro is leaving to take a job – this time with direct competitor Synnex.

Synnex this week hired Tim Acker as its vice president of mobility and connected devices. He will work with carriers and OEMs to drive Synnex's business around mobile devices and related products and services.

Acker had been general manager and senior director of Ingram Micro Mobility, so Synnex's gain is clearly Ingram Micro's loss. In November Jay Miley, Ingram Micro vice president and general manager of the distributor's advanced technology division, defected to take a job as president of solution provider PCM.

Google To Shut Down Google Helpouts

Google will discontinue its Google Helpouts because not enough people were using the online collaboration service, according to a report on the AndroidCentral website. Google will shut down the service on April 20.

Google launched the Helpouts service in November 2013 with the idea that people could provide help and expertise through live video and chat. But Google, in a posting on the Helpouts site, said usage of the service failed to live up to the company's expectations. "Sadly, we’ve made the tough decision to shut down the product," the posting said.

Report: AMD Stops Shipping Products To Over-Stuffed Channel

AMD has halted shipments of new processors and other products after a combination of bad forecasting, declining PC sales and poor supply chain controls have resulted in a glut of AMD products in the channel.

The excess inventory is estimated to be valued at more than $100 million, according to a story on The Register website. AMD is working to clear out the glut of stock, including cutting deals with brokers – a practice that some partners say is destabilizing prices, according to the story.

CSC Blames "Execution Missteps" For Q3 Revenue Shortfall

Computer Sciences Corp. executives had some explaining to do this week when the systems integrator (No. 4 on the 2014 CRN Solution Provider 500) reported that revenue for its third fiscal quarter was $2.95 billion, down 8 percent year-over-year and 7 percent below what Wall Street analysts had been expecting.

The news sent CSC's stock plunging by 8 percent in after-hours trading.

CEO Mike Lawrie (pictured) blamed "execution missteps" for the sales shortfall, rather than problems relating to the market or demand. Problems arose with "unforeseen delays and execution issues" around several deals during the quarter. He vowed to correct the problems in the current quarter.