5 Companies That Had A Rough Week

The Week Ending Aug. 15

This week, Oracle saw a top sales executive leave the company after 21 years, raising questions about its commitment to the channel. VMware technology is being questioned in some industry circles after the release of two surveys, while Rackspace, Cisco and IBM also found themselves under the microscope of industry scrutiny.

Oracle Loses Key 21-Year Sales Vet Who Fought For Channel

Matt Mills, senior vice president of North America sales at Oracle, left after 21 years at the company, apparently after failing to convince his boss, Oracle President Mark Hurd, to give him a bigger role.

Partners said Mills has been a steadfast supporter of the channel and has even personally intervened to keep Oracle's salespeople from taking deals away from partners.
Without Mills -- and Adrian Jones, former senior vice president of Oracle's Asia-Pacific business, who left in June -- Oracle partners are wondering who's going to have their backs.

VMware Technology Questioned In Pair Of Competitive Industry Surveys

The battle for software-defined networking dominance has barely started, but Cisco has some data that shows the channel may lean in its favor when recommending SDN to customers.

Partners that work with both vendors are more likely to tout Cisco's Application Centric Infrastructure (ACI) than VMware's NSX in customer conversations, according to a recent channel survey from Baird Equity Research.

VMware partners also are questioning a separate study, commissioned by VMware, which claims its vCloud Hybrid Service public cloud has better price-for-performance than Amazon Web Services and Microsoft Azure.

Rackspace Shares Drop Despite Decent Q2 Earnings, Execs Dodge M&A Questions

Everyone on Wall Street knows Rackspace is looking for a buyer, but its executives made it clear early on during its second-quarter earnings call that it wasn't going to be answering analysts' questions on this topic.

Rackspace executives touted the managed cloud strategy unveiled earlier this year. They also announced a pricing model that unbundles the costs of infrastructure from the support that comes with it. Yet Rackspace shares tumbled 6 percent in the wake of the call.

Cisco Plans 6,000 Layoffs As Networking Business Continues To Face Pressure

Cisco reported fiscal fourth-quarter earnings that surpassed Wall Street's expectations, but it also revealed plans to lay off 6,000 employees, raising questions about the health of its traditional cash-cow businesses.

For fiscal 2014, Cisco's revenue dropped 3 percent year-over-year to $47.1 billion, while profit fell 21 percent to $7.9 billion. Cisco expects revenue for its fiscal first quarter to be in the range of flat to up to 1 percent on a year-over-year basis.

Cisco is refocusing its business around new IT markets like software-defined networking and the Internet of Things.
"If we are going to become the No. 1 IT player, which we are going to do, our ability to move requires decisiveness and it requires investing in these growth [areas]," Cisco CEO John Chambers said on the vendor's fourth-quarter earnings call.

IBM Under Attack By HP, Which Is Trying To Poach Its Partners

Hewlett-Packard is trying to capitalize on IBM's decision to sell off its x86 server business to Lenovo with a campaign to lure away IBM channel partners.

Called Project Smart Choice, HP's campaign targets IBM partners that might feel as though the vendor no longer has their best interests at heart now that it's out of the low-end server market.

"Do you rely on a local IBM partner for compute, end to end infrastructure, service, and support?" HP said in a full-page ad in The New York Times this week. "If so, IBM's decision to abandon the x86 server market could hurt your business. Even if you don't have technology or vendor issues now, you may later if your partner makes the wrong choice. Which means it's time to make your move to an HP Partner."