10 Tech Turkeys For 2015

Turkey Time

Thanksgiving is here, the air is crisp and the thoughts of Americans are turning once again to turkey, stuffing, mashed potatoes, cranberry sauce and football. In the technology industry, Thanksgiving is also a time to look back on the blunders, missteps, faulty calculations and questionable behavior that have befallen some companies.

They're called Tech Turkeys, and they've become just as much of a Thanksgiving ritual as spiced rum, bobbing for apples, arguing with family members over silly issues, and falling into a tryptophan-induced coma approximately 17 minutes after finishing your holiday feast.

This year's Tech Turkey list includes a number of technology vendors that rankled customers and partners with poorly-thought-out moves, as well as individuals who made unpopular decisions or weren't paying attention at crucial moments.

In the spirit of calling tech companies to the Thanksgiving dinner table (for comeuppance, not to dine), CRN presents 10 examples of tech industry turkeys for 2015.

10. Google Apps Channel Program

It wasn't long ago that Google had a solid-and-growing base of loyal channel partners that exclusively sold Google For Work (formerly called Google Apps For Business), but that may be changing.

In August, several Google partners told CRN that working with the search giant isn't as lucrative as it used to be, and some have started selling Microsoft Office 365 to make up for the shortfall. Other partners have cut ties with Google entirely, upset over shrinking margins and the vendor's apparent preference for working with large solution providers more than medium-sized and smaller ones.

As Google's channel goes through these changes, some current and former partners think Microsoft could be the ultimate beneficiary. If that does happen, partners think Google could have a much tougher road in competing with the galloping momentum of Microsoft's Office 365 cloud software suite.

9. Oracle's Cloud Strong-Arming

Oracle's earnings calls have taken on a familiar pattern over the course of 2015: Co-CEOs Safra Catz and Mark Hurd share incandescent sales figures to illustrate the growth of the vendor's cloud business, and Chief Technology Officer Larry Ellison predicts that Oracle is on track to surpass Salesforce.com as top dog in the Software-as-a-Service market, and maybe takes a couple of shots at SAP and Workday.

But according to some Oracle partners, customers aren't clamoring to buy cloud services from Oracle, at least not at this stage. Some partners say Oracle has been using a variety of tactics to pump up its cloud sales figures and make it seem as though this business is booming at a rate that should have Amazon Web Services shaking in its boots.

Some reports have even suggested that Oracle is stepping up software licensing audits and then strong-arming out-of-compliance customers into buying cloud credits.

While Oracle doesn't appear to be violating any laws here, some of its partners believe these cloud sales tactics are bad business, and could eventually backfire, by convincing fed-up customers to look at alternatives to its database empire.

8. CSC's Scandals, Cloud Myopia

Computer Sciences Corp. has a rough year. In March, it suspended Eric Pulier -- founder and CEO of ServiceMesh, a cloud startup it acquired in 2013 for $260 million -- for his role in an alleged bribery scandal in Australia. Then, after Pulier resigned in April, CSC filed a $98 million lawsuit against him in May that stemmed from his role in the alleged scandal.

CSC also paid $190 million in June to settle accounting fraud charges that the U.S. Securities and Exchange Commission filed against the company in 2011.

In May, after CSC announced plans to separate itself into two companies -- one focused on the commercial market and the other on government customers -- Lawrie acknowledged that he'd underestimated the magnitude of the industry's shift to cloud computing.

"I missed some of the dynamics associated with the acceleration to cloud," Lawrie said during CSC's earnings call in May. "It is accelerating and had a bigger impact than what I thought it was going to have in 2015."

7. VMware and Reseller Partner Carahsoft's Alleged Overcharging

VMware and Carahsoft, its government reseller partner, have found themselves in the headlines this year for reasons they surely aren't thrilled about.

VMware and Carahsoft agreed to pay $75.5 million in June to settle a civil lawsuit alleging they overcharged the federal government for VMware products and services. The vendors also drove an $78.1 million enterprise licensing agreement with the U.S. Army that has led to numerous problems for some Army commands, like the Army National Guard.

In September, sources told CRN that Apple had decided not to renew an existing ELA and would switch more of its internal infrastructure to KVM and OpenStack.

ELAs are supposed to save customers money, but with VMware increasingly bundling its products into suites, VMware partners have told CRN that their customers are starting to question whether these licensing agreements are really delivering the promised benefits.

6. Microsoft's Azure Support

Microsoft's Azure public cloud has cemented its status as the top challenger to Amazon Web Services. But based on customers' reactions on Twitter and elsewhere, the software giant apparently still has work to do when it comes to keeping services up and running.

In June, one Microsoft customer -- who uses Azure Virtual Machines Infrastructure-as-a-Service to run core business apps -- told CRN his services were only intermittently available for a nine-day period. And during that time, he said Microsoft's support staff kept telling him there were no problems with the services.

Cloud outages are a reality for every vendor in the market, but Microsoft's response when things go awry has left some customers frustrated. And if Microsoft is ever going to catch up with AWS, it's going to have to get a lot better at figuring out the causes of problems and communicating them to customers.

5. Apple's Channel Myopia

Apple, despite its enterprise partnerships with IBM and Cisco Systems, continues to show little interest in working collaboratively to drive business with its channel partners, sources told CRN in October.

What's most surprising to some partners is that while Apple's CEO comes from a channel background, the vendor has actually become more aggressive about taking deals direct, they say.

While Tim Cook said on last month's earnings call that Apple has "a huge indirect worldwide channel that many customers buy from and are counting on buying more services from," several Apple partners told CRN they're not feeling any love from the Cupertino, Calif.-based vendor.

In a June CRN Intelligence survey of 150 solution providers, 58 percent said Apple's channel relationships under Cook have either stayed the same or worsened. In a separate CRN survey in September, 55 percent of solution providers said Apple's direct sales force had competed with them in enterprise accounts in the past 12 months.

4. Lenovo Gets Superfished

Lenovo received harsh criticism from security researchers in February for shipping consumer PCs with Superfish, a type of adware that injects advertising into websites for users of Google Chrome and Microsoft Internet Explorer.

Superfish works by installing a root certificate into Windows that allows it to display advertising on SSL-protected websites, but researchers noted that attackers could use this to view encrypted communications, including bank account details, account credentials and Web mail messages.

Lenovo said at the time that it had already stopped shipping PCs pre-installed with Superfish in January, but the incident once again raised the issue of whether "bloatware" -- which refers to software that OEMs get paid to install on new PCs -- is also serving as an easy pathway for online miscreants to wreak havoc on consumers' PCs.

3. Virtual Instruments' Duck Hunting CEO

John Thompson, chairman of the board at Microsoft and CEO of Silicon Valley startup Virtual Instruments, is a widely respected executive from his time as CEO of Symantec and general manager of IBM's Americas business. He is also, by most accounts, a well-liked leader.

Yet employees at Virtual Instruments, a once-high-flying startup with dozens of Fortune 500 customers, are less than enthused about Thompson's leadership these days. After nearly running out of cash and laying off or furloughing nearly two-thirds of its staff, Virtual Instruments recently looked for a buyer.

Thompson, in an all-hands meeting with employees last month, told employees he went duck hunting in Canada after thinking he'd struck a deal. But the deal fell apart, and Thompson and his management team had to scramble to get funding to keep the company alive.

Virtual Instruments employees aren't as upset by the timing of Thompson's duck hunting trip as they are about the fact that, for some reason, he thought it would be a good idea to tell them about it.

2. Verizon, Sprint Fined For 'Cramming' Charges Onto Customer Bills

Carriers, in their never-ending quest for new revenue streams, are always finding new ways to pad customers' bills with extras. But this year, Verizon Wireless and Sprint got a big-time comeuppance from a group consisting of the Consumer Financial Protection Bureau, the Federal Communications Commission and several state attorneys general.

In May, Verizon Wireless agreed to pay $90 million and Sprint agreed to pay $68 million in settlement money after it was alleged that they charged customers millions of dollars in unauthorized fees for premium text services, according to The Wall Street Journal.

Smartphones are revolutionizing work and play for millions of people, but in this case, it appears that the carriers involved got a little too caught up in their own hype, and perhaps didn't think their customers would notice extra charges because they were too busy texting.

1. Former Polycom CEO Andrew Miller

The U.S. Securities and Exchange Commission in March charged former Polycom CEO Andrew Miller with using nearly $200,000 in corporate funds for personal activities, including international trips with his friends and girlfriend.

The SEC alleges that Miller created "hundreds of false expense reports with bogus business descriptions" to obtain the money. Miller was alleged to have spent more than $80,000 on personal travel and entertainment, and more than $10,000 each on clothing and tickets to sporting events, according to the SEC.

Miller also spent $5,000 on a watering service for his personal plants, claiming that it was for plants at Polycom's San Francisco offices, the SEC alleged.

Miller resigned in 2013 and Polycom shares plummeted on the news, shedding $273 million in market capitalization in a single day. Although Miller accepted responsibility at the time for expense report irregularities, the full scope of his alleged misconduct didn't become apparent until the SEC filed charges this year.