5 Companies That Had A Rough Week

The Week Ending March 20

This week's roundup of companies that had a rough week include VMware's potential loss of a major defense contract, AT&T's costly stumble in a patent case, Microsoft's latest Azure outages, Tech Data's disappointing fourth-quarter earnings report, and a leading health-care insurance company hit by a security breach.

Defense Department Cancels Potential $1.6 Billion Licensing Deal With VMware

It's always a bad week for a company when a major deal falls through. It's a really bad week when that deal was potentially worth $1.6 billion.

The U.S. Department of Defense canceled a proposed five-year, $1.6 billion enterprise licensing agreement with VMware. The Defense Information Security Agency didn't explain its decision, only saying it needed more time to "further analyze the government's needs."

The cancellation is a setback for VMware, which had been working on the deal since at least mid-2013. Several of VMware's cloud competitors have been protesting the deal.

AT&T Fined $40 Million Because Lawyers Missed Appeal Deadline

Telecommunications giant AT&T must pay a $40 million fine in a patent infringement case because the company's lawyers missed an appeal deadline, according to a Bloomberg story. The goof means AT&T must pay a $27.5 million jury verdict, plus interest, to Two-Way Media LLC for allegedly using that company's patented technology for tracking what people watch on streaming video services.

The problem began with a faulty court docket notice in which the trial judge granted AT&T's request to seal some documents, according to Bloomberg. In the order, the judge also denied AT&T's request to overturn the verdict, beginning a 30-day appeal period, but AT&T lawyers didn't discover that until 51 days had passed.

AT&T asked the U.S. Appeals Court to allow it to appeal the jury verdict despite the "excusable neglect." This week, the appeals court denied the request saying AT&T's 18 lawyers and legal assistants should have read the document, according to Bloomberg.

Microsoft Azure Services Hit With Outages

It wasn't a good week for Microsoft or customers of its Azure cloud services.

Microsoft's Azure Virtual Machines (Infrastructure-as-a-Service) and Azure Cloud Services (Platform-as-a-Service) were down for more than two hours Monday after suffering what the company described as a "network infrastructure issue." The outage affected customers in the central U.S. region.

Less than 24 hours later, customers on the East Coast were hit by another outage, also lasting around two hours, this time caused by a problem with data storage, according to the company.

The outages follow a massive 11-hour Azure outage in November that took down its cloud storage service. This week, angry customers took to Twitter to complain with at least one vowing to switch to Amazon Web Services.

Tech Data Reports 8 Percent Decline In Q4 Revenue

Distributor Tech Data reported disappointing fourth-quarter sales and earnings results this week, including an 8 percent year-over-year plunge in revenue that missed Wall Street's expectations.

For the quarter ended Jan. 31, Tech Data reported total revenue of $7.3 billion, down nearly 8 percent from the same quarter one year earlier. In a conference call with financial analysts, CEO Bob Dutkowsky said U.S. sales came in below expectations due to a slowdown in sales of key products in the U.S. in the latter half of the quarter. Overall revenue from the Americas in the fourth quarter declined 5 percent year-over-year to $2.6 billion.

Dutkowsky, who said Tech Data is well-positioned for growth in fiscal 2016, also cited Tech Data's plans to pull back from some high-volume, low-margin businesses during the quarter in an effort to improve earnings.

Premera Blue Cross Hit By Security Breach, As Many As 11 Million Subscribers Affected

Health-care insurance provider Premera Blue Cross this week disclosed it had been the victim of a cyberattack, and the records of as many as 11.2 million customers may have been exposed. The security breach, which occurred last year and was discovered in January, compromised subscriber data, including names, birth dates, social security numbers, bank account information, addresses and other information.

A Seattle Times story said federal auditors warned Mountlake Terrace, Wash.-based Premera Blue Cross early last year about security flaws in its IT system that made it vulnerable to an attack.