5 Companies That Had A Rough Week

The Week Ending Nov. 4

Topping this week's roundup of companies that had a rough week was Broadcom, whose $5.9 billion acquisition of Brocade Communications left a lot of solution provider partners with an uncertain future.

Also making the list this week were NetApp and its employees, who are working through another round of layoffs; struggling Ciber, which is exploring "strategic alternatives" about its future; Syntel and its CEO, who suddenly resigned this week; and Hewlett Packard Enterprise, which faces a lawsuit from the state of Rhode Island over a disputed DMV computer project.

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.

Broadcom's Plan To Buy Brocade Leaves Partners 'Bewildered And Confused'

Broadcom's deal this week to acquire Brocade Communications for $5.9 billion might win kudos for being a bold move. But it ended up being a bad week for Brocade's channel partners who sell the company's IP networking products and partners who work with wireless networking from Brocade's recently acquired Ruckus Wireless business.

Broadcom said it plans to retain Brocade's fibre channel SAN switching business, but will sell off Brocade's IP networking business – including the Ruckus Wireless business Brocade acquired in May. That leaves channel partners who sell those products in limbo, not knowing what vendor or vendors they will be working with.

Partners told CRN that customers would hold off on purchases because of the uncertainty. "The way they handled this could stop sales dead in their tracks," one Ruckus Wireless partner said.

NetApp To Shed Another 6 Percent Of Its Workforce

It was a tough week to be a NetApp employee. This week the storage system vendor said it is undertaking a global restructuring that will result in the layoff of another 650 employees, or 6 percent of its workforce.

The latest round of layoffs come as the company continues to shift its business away from older storage technologies to new products such as all-flash arrays, next-generation data centers and hybrid cloud systems.

But that transformation is apparently taking longer than NetApp had hoped. In February of this year NetApp said it would cut 12 percent of its global workforce as the company changed course.

Struggling Ciber Explores Strategic Alternatives

It's never a good thing when a company hires an outside firm to help it explore "strategic alternatives."

That's what solution provider Ciber is doing, according to a filing with the U.S. Securities and Exchange Commission this week. Ciber's board of directors has hired an undisclosed outside company to help it review such options as selling out to or merging with another company, financing or refinancing, selling off some or all of the company's assets, forming a joint venture or some other option.

Ciber, No. 43 on the 2016 CRN Solution Provider 500, has seen double-digit sales declines, a 71 percent plunge in the company's stock price, and recent sell-offs of three European business units.

Rakesh Out As Syntel CEO As Company Faces Challenges

Syntel Oresident and CEO Nitin Rakesh unexpectedly resigned this week. The move comes after the company's stock has lost more than half its value since the company issued a $15 special dividend on Oct. 3.

A source told CRN that Nitin Rakesh's decision was a personal one. He had been president and CEO since April 2014. The company quickly appointed chief operating officer Rakesh Khanna as interim president and CEO.

Syntel, No. 38 on the 2016 CRN Solution Provider 500, said it is dealing with multiple challenges including soft global macroeconomic trends, industry-specific headwinds, and regulatory-related uncertainty in key markets. The company's sales fell 5 percent in its most recent quarter and it recorded a $217.3 million loss due to a one-time repatriation of $1.24 billion of cash.

HPE Sued By Rhode Island Over DMV Computer System

Rhode Island is suing Hewlett Packard Enterprise over a long-delayed project to assemble a computer system for the state's Division of Motor Vehicles, according to an AP story.

The lawsuit, filed Tuesday in Rhode Island Superior Court, seeks a temporary restraining order and injunction that would block HPE from walking away from the project. The suit says the state has paid HPE $13 million for the system, which the state said has not been fully delivered.

The AP story quoted Gov. Gina Raimondo as saying HPE is "unfairly demanding more money" to complete the project and is "trying to double" the project's price. The story quoted HPE as saying that it had completed its contractual obligations for the project and was unwilling to pay for "additional work" the company said the state has requested.