5 Companies That Had A Rough Week12:19 PM EST Fri. Sep. 27, 2013
This week's roundup of companies that had a rough week include BlackBerry's mammoth loss, mixed reactions to Microsoft's new Surface 2, a lengthy email outage by a major service provider, Oracle CEO Larry Ellison's decision to skip his Oracle OpenWorld keynote, and solution provider The Experts being fired by HP for its connection to the recent Navy Yard shooting.
This week's news that BlackBerry lost almost $1 billion in its quarter ended Aug. 31 didn't come as a surprise. The company issued a preliminary statement about its financial results on Sept. 20. But that didn't reduce the magnitude of the disaster when the final numbers were released this week.
BlackBerry reported a net loss of $965 million on sales of $1.6 billion. That compares to a net loss of $229 million on sales of $2.9 billion in the same quarter one year earlier. Not disclosed earlier were the company's sales in the Americas, where sales fell 56 percent year-over-year to $610 million. Last week the company said it would cut 4,500 jobs, or about one-third of its workforce. Earlier this week, the company disclosed plans to be taken private in a $4.7 billion deal. Also, this week the company had to delay the launch of its BlackBerry Messaging service because of technical glitches. All-in-all, it's been a bad run recently for the company that once dominated the mobile device market.
Oracle's OpenWorld conference drew 60,000 attendees this year, many hoping to hear CEO Larry Ellison's always popular keynotes. And Ellison didn't disappoint in his opening keynote Sunday where he debuted the company's new in-memory database system. But the show overlapped this week with the final races in the America's Cup, in which Oracle's sponsored boat was the defending champion. Rather than give his scheduled keynote Tuesday afternoon, Ellison went to watch what was the next-to-last race in the match, leaving thousands of disappointed OpenWorld attendees listening to Oracle Executive Vice President Thomas Kurian talk instead. Most OpenWorld attendees pay hundreds, if not thousands, of dollars to attend the conference, and many were not pleased Ellison chose his hobby over his CEO duties. There was lots of grumbling and some pretty nasty comments on Twitter. "I love that Larry Ellison blew off his own keynote to watch his sailboat race. Says everything you need to know about the guy," tweeted one attendee. Ellison later apologized, but it soured what should have been Oracle's most triumphant week.
Microsoft this week debuted the Surface 2 and Surface Pro 2, the next generation of its slow-selling tablet computer. While Microsoft touted the new product's faster performance and better battery life, some observers were questioning whether the company had done enough to turn around Surface's lagging sales.
Industry analysts said Microsoft's efforts to boost Surface sales are hobbled by the weak value proposition of the Windows RT operating system, including the limited number of supported applications compared to competing tablets, and a price that some say is still too high. "Microsoft needed to do something innovative beyond the first gen, and I'm not seeing it," research analyst Jack Gold told CRN.
Most disconcerting of all is Microsoft's still unclear plans on selling Surface through the channel. Currently, there are only a handful of authorized Surface resellers, and the vendor has given no indication it plans to expand channel sales anytime soon.
A glitch knocked out Gmail services to about 50 percent of the service's users this week in what proved to be one of the longest, most widespread Gmail disruptions in years.
Users endured email delivery delays and problems downloading attachments for as long as 10 hours on Monday. Google attributed the problem to a rare dual-network failure that brought down two separate network paths, greatly reducing the company's ability to process messages.
Analysts said the lengthy outage raises concerns about service levels from cloud service providers.
Hewlett-Packard this week fired The Experts, the Fort Lauderdale, Fla.-based solution provider for whom Aaron Alexis worked when he went on his shooting rampage last week at the Washington Navy Yard, killing 12 people.
HP had used the solution provider as a subcontractor on a multimillion-dollar technology services contract with the U.S. Navy. HP said it was cutting ties with The Experts because it had "lost confidence" in the company.
The Experts maintained it had met all of its contractual obligations, including hiring a service to perform two background checks on Alexis.
The incident has raised questions about how thoroughly employees of IT solution and service providers are screened before being granted security clearances to carry out IT contracts at military bases and government facilities.