5 Companies That Had A Rough Week

The Week Ending June 12

This week's roundup of companies that had a rough week include a leading IT security company that became the latest victim of a cyberattack, moves by an activist investment company that's pushing for changes at Citrix, reports of impending layoffs at chip maker Intel because of continued sluggish sales of PC processors, the loss of a key Hewlett-Packard executive to a competitor, and the extension of a moratorium on U.S. Army purchases of VMware software.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves -- or just had good luck -- check out this week's "5 Companies That Came To Win" roundup.

Security Vendor Kaspersky Lab Hit By Cyberattack

Perhaps it was inevitable, but now the vendors that develop technology to protect businesses from security breaches are themselves becoming cyberattack targets.

This week Kaspersky Lab said it discovered that a sophisticated new malware platform had infiltrated several of its internal IT systems. The malware, dubbed Duqu 2.0, had exploited up to three zero-day vulnerabilities and then spread using Microsoft Software Installer files. The attack targeted information on Kaspersky's latest technology and on Kaspersky's investigations into other attacks.

Certainly the cyberattack was a bummer for Kaspersky, given that the malware was able to avoid detection by its anti-malware systems. But it's also bad news for IT organizations everywhere: If security technology developers are no longer safe, it doesn't bode well for the rest of us.

Activist Investor Acquires Stake In Citrix, Channel Partners Could Feel Its Effects

Elliott Management, a New York-based hedge fund and activist investor, disclosed Thursday that it had acquired a 7.1 percent stake in virtualization software developer Citrix Systems. The company is also pushing to meet with the company's board to present what it calls the "New Citrix Plan."

That could be bad news for Citrix. Observers told CRN that such activist investor efforts generally end badly for technology companies. And it's potentially bad news for Citrix partners given that Elliott Management's plan calls for "improving" the company's channel sales strategy -- possibly including paring down its partner ranks.

Intel Planning Job Cuts After Tough Quarter

It's no secret the sagging PC market has been taking a toll on the financial performance of chip maker Intel. But it became clear this week just how tough things have gotten as a news report said Intel is planning to lay off an unspecified number of employees in the coming month.

The Oregonian reported that it obtained a confidential Intel internal memo outlining plans to cut staffing levels in a bid to keep expenses flat and meet its reduced financial outlook for 2015. While the memo didn’t say how many of the company's 106,000 global employees will be cut, it did say the employees slated for "performance-based involuntary separation" have been identified. The memo also said Intel will cut its research and administrative budget by $300 million and prioritize other investments to control spending.

HP Acquisition Exec Jumps Ship To Join Dell

Tom Joyce, a six-year Hewlett-Packard veteran and key member of the company's corporate development acquisition team, defected from HP to join Dell's Software Group, it was learned this week.

Joyce, senior vice president of global corporate development, helped drive key acquisitions for HP including last month's $3 billion acquisition of wireless networking superstar Aruba Networks. He was also instrumental in HP's acquisitions of big data encryption security company Voltage Security and software-defined networking innovator ConteXtream.

HP's loss is Dell's gain. Dell is trying to grow its software business and Joyce's expertise and industry knowledge will be invaluable. For HP, it's a loss of a key executive as the company gets closer to its planned split into two companies, one focused on PCs and printers and the other on enterprise computing.

Army National Guard Moratorium On VMware Purchases Extended Until October

VMware remains locked out from sales to the Army National Guard after the military organization this week said it's extending a moratorium on VMware purchases until at least October.

The Army National Guard declared the moratorium last July for budgetary reasons. It's the latest sign of fallout from a VMware enterprise licensing agreement with the U.S. Army that expired March 30. The ELA covered software upgrades and maintenance renewals for the Army's VMware software, as well as unlimited downloads of additional VMware licenses.

But the ELA deal caused sticker-price shock for some Army commands that downloaded additional product licenses, accruing additional maintenance and support charges and leading to big bills, sources told CRN. That led to the moratorium, which won't be lifted until October at the earliest.