5 Companies That Had A Rough Week

The Week Ending Aug. 12

Topping this week's roundup of companies that had a rough week was Oracle, which suffered a potentially serious security breach of its Micros Systems payment system.

Also making the list were Lenovo, for backing off from a scheduled presentation of its new solid-state storage technology; Delta Airlines, for an epic failure of its global IT system; VMTurbo, which is getting a less-than-warm welcome for the upcoming VMworld; and EMC, for warning that its operating margins could suffer as the company expands its channel SMB sales.

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 Five Companies That Came To Win roundup.

Oracle's Micros PoS Payment System Hacked

News broke this week that Oracle's Micros Systems' point-of-sale system, used by hundreds of thousands of retailers and hotels around the world, had been breached by cyberattackers.

The data breach, first reported by the Krebs on Security website, may have been committed by a Russian organized cybercrime group. The scope of the attack and how long the attackers had access to the system remained unclear.

Oracle acknowledged the incident in a letter to customers that suggested that all Micros customers change their passwords – including changing passwords for any accounts used by Micros representatives to access on-premise systems.

Oracle said that neither its corporate network, nor any of its other cloud and service offerings, were compromised in the incident.

Lenovo Execs Get Cold Feet, Back Out Of Solid-State Drive Demo

Lenovo executives were all set to demonstrate a new solid-state drive product this week. But the Tuesday event was canceled at the last minute because they feared giving up a competitive advantage by showing off the product – which is scheduled for release in mid-2017 – so soon.

The solid-state drive, known as "Project Spark," is Lenovo's first foray into data center SSDs, a market dominated by Samsung and SanDisk. Lenovo is developing the product in conjunction with Seagate Technology, NxGn Data and Amphenol, and reportedly boasts up to 8TB of capacity. The demo was set to take place at this week's Flash Memory Summit in Santa Clara, Calif.

While Lenovo's concerns about tipping their competitive hand may be valid, scheduling the demo and then canceling it leaves the company looking a bit silly. "This shouldn't have happened, and we're going to have to talk about that," a spokesman said.

Delta Suffers Massive IT Outage That Disrupts Flights Most Of The Week

Delta Airlines' IT system failed worldwide for six hours Monday, leading to the cancellations of more than 2,100 flights over three days and disruptions for thousands of passengers.

The system outage, apparently triggered by a power outage in the airline's technology command center in Atlanta, started around 2:30 a.m. ET Monday and lasted six hours. After the power failure, a number of critical systems and network equipment failed to switch to backup power as they were supposed to.

Delta isn't the only airline to experience an IT meltdown this year. On July 20 a router failure brought down Southwest Airlines' IT network, a system failure that ultimately led to the cancellations of some 2,000 flights over several days and cost the airline $54 million, according to a Chicago Tribune report this week.

VMTurbo Asked To Cancel VMworld Speaking Engagements, Changes Name

VMTurbo was asked by VMware to cancel its planned speaking engagements at the upcoming VMworld, CRN reported this week. Sources told CRN that VMware pulled VMTurbo's presentations for the conference and returned the company's fee, although it's still listed as a gold-level sponsor for the event.

VMTurbo is also in the process of changing its name to Turbonomic – an effort to emphasize that it isn't focused solely on VMware environments. But CRN said the change could also be based, in part, on the fact that "VM" – despite being industry shorthand for "virtual machine" – is also part of "VMware" and "VMworld."

VMTurbo's Operations Manager software competes with VMware's vRealize Automation Suite, CRN noted. In 2014, two companies seen as offering products that compete with VMware, Veeam and Nutanix, were prevented from exhibiting at VMworld in 2014.

EMC Warns Of Gross-Margin Pressures As It Pushes Into SMB Channels

EMC warned investors this week that its push into SMB markets via the channel could have a negative impact on its operating margins following its acquisition by Dell later this year.

In a recent filing with the U.S. Securities and Exchange Commission, EMC, which now does about 60 percent of its business through the channel, predicted that an increased reliance on channel partners "may negatively impact" gross margins.

"As we focus on new market opportunities and additional customers through our various distribution channels, including small-to-medium sized businesses, we may be required to provide different levels of service and support than we typically have provided in the past," EMC said in the filing.

"We may have difficulty managing directly or indirectly through our channels these different service and support requirements and may be required to incur substantial costs to provide such services, which may adversely affect our business, results of operations or financial condition."