The 10 Biggest News Stories Of 2023
This year’s leading news stories include repercussions across the IT industry and the channel from the uncertain economy. But the biggest story has been the surge of technology innovation and wave of new products spurred by generative AI.
Economic Uncertainty Reigns In 2023
The uncertain economy, including rising interest rates and expectations of a possible recession, has driven much of what’s been happening in the industry this year. That includes the tens of thousands of layoffs that IT companies—from industry leaders to startups—have undertaken in 2023.
The repercussions of current economic conditions can also be seen in everything from changes in customer IT buying plans to reduced venture capital needed to fuel startups.
Cybersecurity continues to be a problem with many businesses and government entities—and even IT companies themselves—joining the ranks of cyberattack victims. This year news stories of evolving cyberattacker tactics, major security breaches and the critical vulnerabilities in IT systems that led to them have dominated the cybersecurity sector.
Also making this list are developments at specific IT companies, including Intel’s efforts to regain its momentum, Microsoft’s cloud service outrages, and Dell Technologies’ significant change in channel strategy around storage products.
But the biggest news story this year has been how the late 2022 release of an open-source product called ChatGPT spurred practically every company in the IT industry to rethink its technology strategy and generated a wave of AI-focused innovation.
Here’s our look at the top 10 news stories of 2023, starting with No. 10 and counting down to No. 1.
No. 10: Intel Turnaround Continues Despite Hurdles
On Dec. 14 Intel debuted its new AI-focused Core Ultra Meteor Lake processors for ultrathin laptops (and for the emerging AI PC space) and its 5th-Gen Xeon Scalable server processors.
The new CPUs were the latest fruits of CEO Pat Gelsinger’s (pictured) multiyear comeback plan to return Intel to the industry leadership it enjoyed for many years.
Core to that effort is developing advanced chip manufacturing capabilities that will provide highly competitive products by 2025. In October Intel celebrated the opening of the company’s new chip fabrication plant in Ireland, which uses the EUV (extreme ultraviolet) Intel 4 manufacturing technology, as another milestone for Gelsinger’s comeback blueprint. The plant began high-volume production of the Meteor CPUs.
But it’s been a turbulent year for Intel. Gelsinger has shaken up the company’s corporate structure, including taking steps to operate its manufacturing operations as a separate business and reorganizing the company’s global sales team for its largest OEM and cloud accounts.
Like other IT vendors, Intel was hit hard by the sales slowdown in the PC market. The company implemented a series of employee layoffs through the year, including some in August, following the multibillion-dollar spending reduction plan announced in late 2022. In February Intel cut its quarterly dividend for shareholders and slashed the base pay of senior employees and executives.
The company also has exited a number of businesses this year including its NUC mini PC business, Intel Blockscale, Intel Optane, the company’s pre-built server business, its wireless WAN business, the company’s network switch chip business, its sports division and Intel drone light shows.
Intel also saw the departure of several key executives in 2023, most notably GPU lead Raja Koduri and Intel Foundry President Randhir Thakur.
Perhaps most importantly, Intel has made changes to its chip product road maps, saying it will now release data center GPUs every two years instead of annually, leading to canceled development of the planned Rialto Bridge processor. The company also pushed back the launch of Falcon Shores, a next-generation accelerator chip in the Max Series, from 2024 to 2025.
Intel, nevertheless, has demonstrated the technical prowess that made the company a chip industry leader. In January the company launched the Intel Data Center GPU Max Series, its long-awaited response to rival Nvidia, and in June it debuted the fastest workstation GPUs yet in its Arc Pro A-series.
In a major shift in Intel’s business model, the chipmaker said in June that it would run its manufacturing operations as a separate business, Intel Foundry Services, that will serve as a third-party contract chipmaker for the company’s product groups. The new “internal foundry” model, Intel said, is key to the transformation of the company’s integrated device manufacturing strategy, dubbed IDM 2.0.
That plan was dealt a major blow, however, when Intel canceled its plan to acquire Israel-based chip manufacturer Tower Semiconductor for $5.4 billion. The deadline to complete the acquisition was Aug. 15 and published reports said the deal fell through because it failed to win regulatory approval from China. In September Intel inked a deal to provide foundry services and capacity to Tower in the U.S.
In October, speaking to financial analysts, Gelsinger provided an upbeat look at Intel’s future based on the growth of AI, the company’s push for advanced manufacturing processes, and a recovery of the PC market.
No. 9: Online Marketplaces Continue To Expand, Evolve
The use of cloud marketplaces by IT vendors to promote and deliver their software and services has been on the increase in recent years. That momentum accelerated in 2023 , especially as distributors expanded their own online marketplace initiatives.
In April distributor Westcon-Comstor launched PartnerCentral, its first multi-vendor marketplace where partners can configure, quote and order complex hybrid solutions with billing for software, hardware and services. The company said PartnerCentral is designed to “accelerate and simplify” the move to cloud and as-a-service payment models.
In January Ingram Micro rolled out enhancements to its Cloud Marketplace that help partners work with Microsoft Azure and its New Commerce Experience (NCE) platform. In June Pax8, which has evolved from a distributor to a cloud marketplace operator, unveiled its enhanced cloud marketplace, saying its new data and AI capabilities create a “customer acquisition engine” for MSPs.
The public cloud platform giants, meanwhile, have continued to expand and evolve their own rapidly growing cloud marketplaces. Google Cloud started off the year by unveiling new capabilities for the Google Cloud Marketplace, being rolled out through the year, including expanded private offers, the ability for resellers to receive margins from ISVs, accelerated on-boarding, more cost management options, and new governed transacting and management functions.
Kevin Ichhpurani, Google Cloud’s global ecosystem and partner leader, told CRN in August that Google Cloud’s commitment to making the open-source community “first-class citizens” in the Google Cloud Marketplace is key. “We’ve taken an approach that is very open and multi-cloud in nature, which is very much resonating with the partners. Because the channel views it the same way: They need to be able to service their customers regardless of what the customer’s preferences are,” he said.
Meanwhile, AWS global channel chief Ruba Borno told CRN in May that the AWS Marketplace had grown to 330,000 active customers.
Questions remain, however, about the ongoing evolution of public cloud marketplaces. In April Palo Alto Networks CEO Nikesh Arora, in comments at CRN parent The Channel Company’s Best of Breed conference, said he views the widespread use of public cloud marketplace credits as a “transitory payment mechanism” that should not be viewed as a long-term business model by partners.
“I think as companies start to get up to the spend that they’ve committed to the public cloud partners, their marketplace currency will shrink,” Arora said. “I think it’s more of a transitory payment mechanism. I wouldn’t build a long-term business model around it.”
But many disagree. In October CrowdStrike said it was the first cybersecurity ISV to surpass $1 billion in AWS Marketplace sales and Chief Business Officer Daniel Bernard told CRN that he sees a fast-growing opportunity for channel partners around participating in marketplace-driven deals. “Our resellers are bringing AWS Marketplace into the equation because it opens more doors for them,” he said. “It makes it easier for them to sell more products and it makes the deals bigger, and [close] faster.”
New Relic channel chief Riya Shanmugam, in an interview with CRN in February about the availability of the New Relic observability service through the Microsoft Azure Marketplace, predicted that within the next four to five years 80 percent to 85 percent of all software purchases will be made through a small number of leading cloud marketplaces.
8. Dell Launches Partner-First Strategy For Storage Products
In what company executives called the biggest change ever to its go-to-market operations, Dell Technologies adopted a partner-first strategy for its extensive storage product lineup. As of early August, Dell’s direct sales representatives earn more money if they move the company’s storage systems through the channel than if they take that same business direct.
The new program included the company’s PowerMax, PowerFlex, PowerStore and PowerScale storage systems, as well as converged and hyperconverged products, and security storage products.
“This is the biggest change ever to our go-to-market,” Bill Scannell, president of global sales and customer operations, told CRN. “This is massive. This is exciting. We’ve been working on this for a while because we want to make sure we get it right. But we got it right and it’s supported by [CEO] Michael Dell and [COO] Jeff Clarke—all the way through the organization.”
“We have decades of experience working with our partner community to accelerate transformation for our customers,” Michael Dell said in a statement . “The ‘partner-first strategy for storage’ extends our partner commitment and unites the strengths of our partners with the advantages of our world-class team and solutions.”
Dell partners praised the new strategy. “It gives predictability and strength to the channel,” said Neil Hall, North American president for Dell partner Computacenter. “This is the biggest step I’ve seen from a vendor to place much greater significance on the channel in one sweeping move. We want to be there. We want to be a strong partner for Dell and build great success stories for our customers.”
The strategy shift did have a downside for some Dell employees in that the same day the plan was announced Dell Technologies said it would cut an undisclosed number of jobs among its core sales teams as the company relies more on the channel for storage system sales.
No. 7: Acquisitions, Consolidation Continue To Remake The Channel Landscape
Mergers and acquisitions are an ongoing part of the channel. But M&A activity was especially brisk in 2023 as solution providers continue to leverage acquisitions to boost their expertise and services in new technologies and disciplines and expand their reach into new markets and geographies.
Perhaps the year’s biggest acquisition in the channel space was this month’s deal by Insight Enterprises—No. 16 on the CRN Solution Provider 500 and one of Microsoft’s biggest channel partners—to buy SADA, a leading solution provider in the Google Cloud space and No. 108 on the CRN Solution Provider 500. The acquisition carried a price tag of $410 million with a potential additional $390 million payout for SADA’s owners.
The blockbuster acquisition positions Insight as a solution provider heavyweight in the Microsoft and Google cloud markets, including being a top partner for generative AI solutions and a force in multi-cloud services.
“SADA adds immediate scale to Insight’s services business, net revenue, gross profit and gross margin,” said Insight President and CEO Joyce Mullen. “Together Insight and SADA will have more than 6,400 skilled, certified consulting and service delivery professionals with a majority focused on developing multi-cloud and digital transformation solutions.”
Meanwhile, systems integration and IT services giant Accenture, No. 1 on the CRN Solution Provider 500, has been on an acquisition binge in recent years and 2023 has been no different with the company completing or striking deals for more than 30 acquisitions during the year. The acquisitions helped Accenture expand into new geographies and technology areas and/or provide the company with expertise in new service areas.
Accenture’s acquisitions just in November and December included data consultancy Redkite, Salesforce service provider Incapsulate, cybersecurity-as-a-service company Innotec Security, and health-care marketing agency ConcentricLife. Many of the acquisitions are outside the U.S. including sustainability services consulting firm Green Domus of Sao Paulo, Brazil; digital design agency Bourne Digital of Melbourne, Australia; biopharma strategy and consulting firm Bionest of New York and Paris; AI services provider Flutura of Bangalore, India; and cloud and platform development service company Objectivity of Coventry, U.K.
In addition, IT services giant Cognizant unveiled a deal in December to buy ServiceNow partner Thirdera in a move to build one of the industry’s largest ServiceNow practices. That followed the company’s move to increase its IoT capabilities with its January purchase of Mobica.
And cybersecurity solution provider powerhouse Optiv kicked off a major expansion within the federal government space in March when it acquired solution provider ClearShark, a cybersecurity and IT VAR and consulting service provider to the U.S. federal government. The acquisition of Hanover, Md.-based ClearShark more than doubled Denver-based Optiv’s federal government presence while “significantly deepening its bench of government expertise and expanding the breadth of its federal capabilities,” Optiv said.
Fulcrum IT Partners had its eye on achieving $1 billion in annual revenue this year after acquiring “everything-as-a-service” provider Advizex in March, fast-growing London MSP Viadex in April, public sector IT service provider Stoneworks in July, and health-care and financial industries services provider F3 Technology Partners in September.
Ahead, which has grown in recent years through acquisitions of RoundTower, Kovarus and vCore, continued its shopping spree this year with its June acquisition of MBX Systems and that company’s edge and hyperscale solutions. In August Belgium-based IT solution provider Cegeka said it is buying digital IT solution and services provider Computer Task Group in a deal valued at $170 million. And IT services giant Trace3 boosted its cybersecurity prowess with its April deal to buy Set Solutions.
Other solution providers active on the acquisition front in 2023 included Absolute Performance, Amplix, Bluewave Technology Group, Net at Work, Sourcepass and The 20 MSP.
Even mergers and acquisitions that don’t happen can be big news. DXC Technology confirmed in late 2022 that it was in discussions with a potential buyer—possibly a private equity firm. But on March 7 DXC issued a statement saying it had ended those talks without a deal.
SoftwareOne, No. 43 on the CRN Solution Provider 500, has reportedly been the target of numerous acquisition bids, but the Switzerland-based provider of cloud-focused solutions and services has been playing hard to get. In June SoftwareOne turned down Bain’s $3.2 billion acquisition offer, saying it undervalued the company, and then rejected a revised offer of $3.7 billion. On July 24 SoftwareOne said it was undertaking a strategic review of the company to consider “all options for value creation” including a possible sale or merger or continuing to operate as a public company. In October Reuters reported that SoftwareOne had received buyout offers from multiple private equity firms.
Taking the opposite approach of a merger, global solution provider Atos is splitting into two businesses with its Tech Foundations business—along with the Atos brand—being sold to private equity firm EP Equity in a deal valued at €2 billion (about U.S. $2.17 billion). But in November reports said Atos, No. 25 on the CRN Solution Provider 500, was in talks to modify the sales terms.
No. 6: Microsoft, Customers Hit With Cloud Service Outages
It was a tough 2023 for Microsoft, as well as for its partners and customers, as the company’s cloud services—including its popular enterprise applications—were hit by a series of disruptions, especially in the first half of the year.
The problems began early in the year when Microsoft Teams and Microsoft 365 suffered a five-hour service outage on Jan. 17 in North America. That was followed by a global service outage on Jan. 25 for Azure, Teams, Outlook and other services.
On March 1 some Exchange Online users were unable to access their mailboxes. On April 20 users faced a nearly six-hour service disruption involving Microsoft 365 online applications and the Teams collaboration application.
The company was rocked by multiple cloud service outages in early June.
On June 5, an outage affected tens of thousands of Microsoft 365 users and the next day the company and its customers saw a recurrence of the 365 service issues. That was followed by an Azure portal service outage on June 9.
The earlier service outages appeared to be caused by various technical problems. But some of the June service issues were apparently the work of outside bad actors. On June 8, a hacktivist group known as “Anonymous Sudan” claimed responsibility for causing a Microsoft OneDrive outage. And on June 20 Microsoft confirmed that the outages earlier in the month were the result of distributed denial-of-service (DDoS) attacks meant to knock websites offline.
On Sept. 13 Microsoft Teams experienced an issue that lasted for more than two hours.
Some incidents with Microsoft’s services were due to vulnerabilities within the company’s software. Those include a Windows zero-day vulnerability that attackers began exploiting in January, a critical Outlook vulnerability disclosed in March, and an API flaw that allowed a cloud email breach in July. And in August a newly revealed vulnerability in the Azure cloud platform also earned a “critical” severity rating.
Microsoft, of course, wasn’t the only cloud vendor that had to work through service outages in 2023.
Some Cloudflare services, including its control plane and analytics, experienced a multiday outage in November, an incident the company blamed on problems at a third-party data center in Oregon. The episode led CEO Matthew Prince to post a blog in which he described himself as “sorry and embarrassed” over the incident.
In April a fire in a Paris, France, data center brought down Google Cloud and more than 90 cloud services for Europe region users. Some of the resulting problems continued into May.
AWS experienced a service outage for several hours on June 13. Datadog took almost two days to resolve a service issue that started March 8. And IT Glue, a Kaseya company, experienced service problems both in January and July.
No. 5: Broadcom Completes $69B VMware Acquisition, Top Execs Depart
On Nov. 22 Broadcom closed its $69 billion acquisition of virtualization technology giant VMware, 18 months after first announcing the deal, in one of the largest acquisitions in the history of the IT industry.
Broadcom immediately announced that it was reorganizing VMware into four divisions (VMware Cloud Foundation, Tanzu, Software-Defined Edge and Application Networking and Security) and that Raghu Raghuram would step down as VMware CEO, staying on as a technical adviser to Broadcom President and CEO Hock Tan during the transition.
Broadcom also quickly began implementing layoffs. A little more than a week after completing the acquisition, the company confirmed that it was eliminating more than 2,100 jobs (some published reports put the figure at more than 2,800) out of the company’s total workforce of 38,000.
Less than a week after the acquisition closed VMware President Sumit Dhawan exited the company to become the CEO at cybersecurity company Proofpoint.
In early December Tan promised that the company was investing in developing a “rich catalog of microservices” for VMware customers. But Broadcom also outlined plans to sell off its Carbon Black cybersecurity and VMware End-User Computing businesses.
All the changes and the layoffs created “significant concern and chaos” among VMware customers and partners. By early December some solution providers that work with VMware rival Nutanix reported that a number of VMware customers were approaching them about moving off the VMware platform.
The completion of the acquisition followed a long process of obtaining regulatory approvals for the acquisition from regulatory authorities around the world.
The deal faced significant headwinds in 2022 and early 2023 and at times appeared to be in jeopardy. But eventually all the needed regulatory approvals were obtained including from the European Union in July, the U.K. in August and—what proved to be the final regulatory hurdle—China in November.
U.S. regulators also closely scrutinized the acquisition—the U.S. Federal Trade Commission launched an investigation in July 2022. But on Aug. 21 Broadcom said the Hart-Rodino pre-merger waiting periods had expired and there was “no legal impediment to closing under U.S. regulations.”
The acquisition continued to make headlines after it was officially announced. In late December, Broadcom said it is terminating all of its partner agreements with VMware resellers and service providers, killing VMware’s partner program and sales incentives, and then forcing existing partners to reapply for their roles. Broadcom will tell partners in January 2024 whether they will be allowed to continue to sell its virtualization software.
No. 4: The PC Market Slump And Early Signs Of A Turnaround
Spending for IT products and services has been uneven in 2023 due to the uncertain economy. But no sector of the IT industry was hit harder than the PC space as leading personal computer makers continued to suffer through a slowdown that began in 2022.
Worldwide PC shipments declined 9 percent to 64.3 million units in the third quarter of 2023, according to market researcher Gartner, which said those results marked the eighth consecutive quarterly decline. Market research firm IDC, meanwhile, calculated worldwide PC shipments in the quarter at 68.2 million units, a 7.6 percent decline.
Analysts have cited a number of reasons for the sales contraction, including weak demand from both commercial and consumer buyers. PC sales soared in 2020 and 2021 as a result of the work-from-home move amid the COVID-19 pandemic, leading to reduced demand in 2022 and 2023. And businesses have been shifting IT budgets away from device purchases, according to market researcher IDC.
The PC market contraction took a toll on the financial results of leading vendors in 2023 including Apple, HP Inc., Dell Technologies and Lenovo. It has also impacted sales for Intel, AMD and other chipmakers that rely on sales to PC makers for a significant chunk of their revenue.
Apple’s Mac and iPad sales took a big hit in its fiscal fourth quarter ended Sept. 30 after PC sales plummeted 34 percent. In November HP said commercial PC unit shipments were down 6 percent in its fiscal fourth quarter (consumer PC unit shipments actually rose 9 percent).
Also in November Lenovo blamed channel inventory buildup for a 22 percent revenue decline in its Intelligent Devices Group in its fiscal second quarter. In April Lenovo implemented a $115 million cost-cutting plan—including employee layoffs—in response to the downturn in its PC business.)
And in December Dell said the long-awaited PC refresh had yet to materialize, reporting that Client Solutions Group revenue—80 percent of which is PC sales— was down 11 percent in its third fiscal quarter ended Nov. 3. And those results were year-over-year comparisons to 2022 when PC sales were already plunging.
As 2023 drew to a close, however, there were signs that the PC market was in the early stages of a turnaround. Gartner said it expected the PC market to begin to recover starting in the fourth quarter of 2023. IDC agreed, saying that the market had “moved past the bottom of the trough,” citing leaner PC inventories in the channel, the start of a new device refresh cycle and the end of support for Windows 10.
In October AMD reported that PC CPU sales, driven by demand for its Ryzen 7000 series, had rebounded and grew by double digits in the company’s fiscal third quarter ended Sept. 30. Intel CEO Pat Gelsinger, on his company’s fiscal thrid-quarter results call in October, was likewise bullish about a PC industry turnaround despite a 3 percent decline in client computing revenue (desktop PC-related revenue was down while notebook PC-related revenue grew).
One development that’s expected to spur PC sales in 2024 is the debut of a new generation of “AI PCs” with the power to handle the surging number of generative AI and copilot applications.
"Generative AI could be a watershed moment for the PC industry," said Linn Huang, IDC research vice president, devices and displays, in the third-quarter PC shipment report.
AI PCs were a key target for Intel’s recently debuted Meteor Lake Core Ultra processors, with a built-in neural processing unit, that CEO Pat Gelsinger has said will “usher in the age of the AI PC.”
No. 3: MOVEit, 3CX Attacks Among Evolving Cybersecurity Threats In 2023
While ransomware remained a major threat to organizations, particularly smaller and less protected businesses, the focus on data theft and extortion-only campaigns by some attackers was a major development in the cyberthreat landscape in 2023.
Security researchers have identified numerous emerging threat trends and new tactics across phishing and social engineering, data theft and extortion, ransomware and software supply chain attacks.
Two significant attack campaigns during the year—the MOVEit and GoAnywhere attacks—did not include encryption-based ransomware, but instead involved extortion demands in exchange for withholding stolen data from public disclosure. The Russian-speaking group behind both attack campaigns, Clop, was the most prominent group to favor extortion-only attacks in 2023 but was not the only one.
Many attackers continued to cut back on their use of malware, instead turning to exploits of tools such as remote monitoring and management (RMM), which are less likely to be caught by endpoint security products. Identity-based attacks using compromised credentials also continued to rise this year as a way to get around endpoint detection and response (EDR). And as for phishing and social engineering, these tried-and-true tactics remained a huge threat—as underscored by the hackers’ use of social engineering as part of the crippling MGM breach.
In Late May and early June Progress Software disclosed and issued patches for significant vulnerabilities in the company’s MOVEit Transfer managed file transfer software. But in the following weeks the number of data breaches due to the MOVEit vulnerability continued to grow with a steady stream of businesses and government agencies reporting attacks.
A number of major data breaches in 2023 could be traced to the MOVEit vulnerability including attacks on the Oregon Driver and Motor Vehicles division of the Oregon Department of Transportation (3.5 million affected individuals), PBI Research Services (4.92 million affected individuals) and the Louisiana Office of Motor Vehicles (6 million affected individuals).
In August IBM said use of the compromised MOVEit application appeared to have resulted in the unauthorized access of millions of people’s health-care information held by state agencies in Colorado and Missouri.
Clop has claimed responsibility for breaching dozens of organizations by exploiting the vulnerability—and many have confirmed they were targeted including Extreme Networks, PricewaterhouseCoopers, and Ernst & Young.
In February the same attackers are suspected of exploiting a vulnerability in the GoAnywhere file transfer platform, stealing data from NationsBenefits, Procter & Gamble, Crown Resorts and the city of Toronto.
In November Microsoft reported that Clop was exploiting a now-patched vulnerability in an IT service management platform from SysAid.
In July incident response firm Coveware said data extortion attacks could result in a haul of between $75million and $100 million for Clop. As of mid-December, the number of impacted organizations from the MOVEit attacks stood at 2,667, according to cybersecurity firm Emisoft.
As damaging as the MOVEit-related attacks were, it hasn’t been the only cybersecurity threat in 2023. In late March, in a potentially far-reaching supply chain attack, a desktop communications application from VoIP system vendor 3CX Corp., was found to be infected by malicious code and the compromised app was being used by a threat actor to target 3CX customers, according to researchers from CrowdStrike, SentinelOne and Sophos.
3CX quickly acknowledged what it called a “complex supply chain attack” and worked to resolve the problem. Researchers noted that the 3CX compromise was caught and corrected in weeks, which appeared to limit the impact from the breach on 3CX and its customers.
But in the immediate aftermath of the attacks customers said they were reassessing their use of 3CX following reports that hackers might still be able to compromise additional updates of the system. The attackers appeared to be particularly targeting cryptocurrency companies, according to Kaspersky Lab. Cybersecurity providers CrowdStrike and Mandiant said a threat attacker in North Korea was most likely behind the 3CX attacks.
On Oct. 16 Cisco Systems disclosed a zero-day vulnerability in IOS XE with a critical severity rating and “active exploitation.” Researchers said the vulnerability had been “widely exploited” and enabled malicious implants on thousands of installed Cisco systems. On Oct. 18 Orange’s Computer Emergency Readiness Team said more than 34,000 Cisco devices had been compromised.
The IOS XE vulnerability set off alarms in IT departments around the world because of the widespread nature of the attacks and the fact they appeared to be the work of a sophisticated threat actor. Researchers also said exploitation of the IOS XE vulnerability pointed to the rising threat of cyberattacks on edge systems.
On Oct. 20, identity and access management tech vendor Okta disclosed a breach in its support case management system through which an attacker was able to view customer data. In late November Okta said the attackers had downloaded the names and email addresses of all support customers.
Financial analysts said the incident could damage Okta’s reputation given that the latest incident was the company’s second major breach impacting customer data in two years. One customer, cybersecurity vendor BeyondTrust, said it initially discovered the breach and said Okta did not publicly acknowledge it for more than two weeks.
In late November Okta announced a commitment to delay new product and feature launches for 90 days in order to prioritize its security.
In February ESXiArgs ransomware attacks targeting a VMware vulnerability hit hundreds of ESXi servers in the U.S. and Canada. Cybersecurity vendor Wiz said that thousands of servers running older versions of the VMware hypervisor were vulnerable and needed patching.
In May Barracuda said some Email Security Gateway customers were impacted by a breach exploiting a zero-day critical vulnerability in the appliance and in June urged customers to immediately relace the devices.
In September casino operators MGM and Caesars Entertainment were hit by highly disruptive cyberattacks apparently carried out by an alliance between hackers in the group known as Scattered Spider and Russian ransomware gang Alphv. The MGM attack reportedly used social engineering to trick a help desk into providing access.
A number of leading IT vendors and solution providers were also targets of cyberattacks that made headlines in 2023. In October CDW investigated a security incident after the LockBit cybercriminal gang claimed to leak stolen data belonging to the company. In May distributor ScanSource said it was the victim of a ransomware attack. Global IT service provider Cognizant was a victim of the MOVEit attacks as were solution providers CompuCom and Iron Bow Technologies.
No. 2: Tech Industry Hit With Widespread Layoffs
The stream of tech industry layoffs began in the later months of 2022. Faced with slowing IT spending driven by economic uncertainty, rising interest rates and inflation, and over-hiring during the pandemic, IT vendors—including giants such as Oracle and Salesforce—began paring back their workforces at year’s end.
But as 2022 turned to 2023 the stream quickly turned into a tsunami of tech industry layoffs. Across major IT vendors such as Microsoft and Google, as well as small companies and startups, thousands of employees were handed pink slips as IT companies slashed their payrolls.
As of Dec. 15, more than 191,017 workers at U.S.-based tech companies had been laid off in 2023, according to the Crunchbase Tech Layoffs Tracker.
In January alone Amazon revealed plans to lay off more than 18,000 employees, Google said it would cut 12,000 workers, Microsoft confirmed plans to reduce its employee roster by 10,000, Salesforce said it would cut about 7,000 workers from its payroll, IBM disclosed plans to cut its workforce by 3,900 and SAP said it would dismiss up to 3,000 employees.
That was followed quickly in February with Dell Technologies’ plans to lay off around 6,650 employees and Amazon Web Services’ announced cutbacks of about 9,000 positions (in addition to the earlier Amazon layoffs). In April global consulting firm Ernst & Young said it would cut its employee roster by 3,000.
Perhaps the biggest layoffs shocker in the channel space was the March announcement from global systems integrator and services giant Accenture of its plans to lay off 19,000 employees over 18 months. The cuts, mostly from back-office operations, came a year after the company made 25 acquisitions and increased its head count by 39,000.
Economic headwinds have certainly been a factor in the decisions to cut staff with some companies reporting slowing demand for IT products and services. But some IT industry executives acknowledged that they had been too quick to hire people in 2020 and 2021 as the shift to work-from-home caused spikes in IT demand.
“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” said Salesforce CEO Marc Benioff in a letter to employees, filed with the U.S. Securities and Exchange Commission, announcing the company’s layoffs in January. “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.”
Some, including then-Aviatrix CEO Steve Mullaney, were more blunt. “Everyone just kept hiring, hiring and hiring, whether it made any sense or not. There was no downside to it. And all anyone cared about was growth at any cost,” he told CRN in April. “Then last summer hits. All of a sudden everybody then says, ‘Well now, hang on. That’s not the way the world works anymore. You actually have to be profitable.’ It’s going back to what’s normal.”
While the cutbacks at the IT industry’s biggest companies generated the biggest headlines, layoffs were across the board with many small and midsize companies and even startups cutting their employee payrolls.
Companies laying off workers in the first half of 2023 included F5 (9 percent of its workforce), NetApp (8 percent of its workforce), Splunk (4 percent of its employees), Informatica (7 percent of its workforce), GitLab (7 percent of its employees), GlobalFoundries (up to 800 workers), Atlassian (about 500 employees), Red Hat (nearly 800 employees), Logitech (300 workers) and CDW (“hundreds” of employees).
Companies—especially smaller ones and startups—in the crowded cybersecurity space were hit particularly hard over the last year and a half. Those disclosing layoffs since mid-2022 included Lacework (20 percent of its workforce), Cybereason (10 percent of its staff), Deepwatch (30 employees), HackerOne (12 percent of its workers), Malwarebytes (at least 100 jobs), Snyk (198 workers) and Rapid7 (about 470 employees). Workers at Secureworks endured two rounds of layoffs including 9 percent of the staff in February and another 15 percent in August.
Layoffs continued in the second half of the year, albeit at a somewhat slower pace.
Exabeam cut 20 percent of its workforce in late October with CEO Adam Geller saying in a blog post that the cybersecurity provider needed to “strengthen our financial health as we navigate global macroeconomic headwinds. … Continuing and challenging macroeconomic conditions made it clear that we needed to make necessary course corrections.”
Distributor Ingram Micro cut between 200 and 300 workers in July while rival TD Synnex laid off about 100 employees in September. Also in September IT consultant Slalom cut 900 workers, Cisco Systems cut 350 jobs in the Bay Area and Microsoft cloud tools supplier SkyKick confirmed layoffs of 140 employees. In October Finnish telecom giant Nokia implemented a plan to cut up to 14,000 jobs through the end of 2026.
Like aftershocks from a major earthquake, some companies that laid off workers earlier in the year made additional cuts as 2023 progressed. Microsoft implemented additional employee cuts in July—beyond the 10,000 the company announced in January—as it began its fiscal 2024. Also in July Accenture said it would cut 890 employees in Ireland. In September Google eliminated additional jobs in its recruiting organization as hiring slowed. And in November Splunk said it would cut an additional 7 percent of its staff—more than 500 workers—beyond its earlier cuts.
Among those engaging in additional layoffs was Dell Technologies, which implemented an undisclosed number of cuts in September. But in filings with the U.S. Securities and Exchange Commission, Dell disclosed that the severance and related costs for all its 2023 layoffs totaled $777 million.
No. 1: The Generative AI-Fueled Gold Rush
In November OpenAI went through five days of turmoil after firing—and then rehiring—co-founder and CEO Sam Altman. While many details of exactly what transpired remain murky, an internal debate over AI safety and how aggressively to pursue AI development—and in what directions—appeared to be a major factor behind the tumult.
The goings on at OpenAI could be seen as a microcosm of the impact OpenAI itself had on the IT industry in 2023. The company’s release of its ChatGPT generative AI chatbot in November 2022 triggered a wave of innovation, development and change that some have compared to the seismic shifts created by the personal computer, the internet and the Apple iPhone.
In the year since, just about every IT company, from cloud giants Amazon Web Services and Google to leading-edge tech startups, have raced to capitalize on the potential of generative AI technology with new AI tools and GenAI products.
Perhaps no company has more aggressively pursued an AI course than software giant Microsoft, a longtime partner with—and financial backer of—OpenAI. In March Microsoft unveiled its Copilot AI tools for its most popular applications, including Word, Outlook, Teams and PowerPoint. (Copilot became generally available in November.)
At the March launch CEO Satya Nadella said the Copilot tools represent “a new era of computing” where content-generating AI becomes as integral as keyboards and multi-touch. At the Microsoft Ignite 2023 conference the CEO, in his keynote, declared an “age of copilots” and described “a future where there will be a copilot for everyone and everything you do.”
In June Microsoft struck a deal with CoreWeave, a provider of GPU-based cloud computing and AI infrastructure, to potentially spend billions of dollars to support Microsoft’s growing AI portfolio. And in August Microsoft introduced Azure ChatGPT, a private version of ChatGPT built into the Azure cloud platform.
Microsoft is hardly alone in the AI arena, however, and many see an AI arms race brewing among Microsoft and cloud giants Amazon Web Services and Google Cloud.
In 2023 Amazon and its Amazon Web Services business pivoted their entire IT strategy toward AI. In April AWS CEO Andy Jassy said his company was “investing heavily” in large language models and generative AI, “democratizing” the technology so companies of all sizes could leverage it. The efforts included spending $100 million to build the AWS Generative AI Innovation Center to help customers build and deploy custom generative AI solutions.
Throughout the year AWS launched a slew of AI-related offerings including Amazon Bedrock for building and scaling generative AI applications, Amazon EC2 Inf2 instances to lower the cost of running generative AI workloads, the Amazon CodeWhisperer AI coding companion, and the Amazon Q generative AI-powered assistant designer for workers. Amazon is reportedly investing millions in developing and training a new large language model code-named Olympus.
In September Amazon caught everyone’s attention with its plans to invest up to $4 billion in Anthropic, developer of the Claude next-generation AI assistant, in what many saw as a competitive move against Microsoft’s alliance with OpenAI.
Google Cloud, meanwhile, is pushing its Bard conversational chatbot as an alternative to OpenAI’s ChapGPT. In November the company debuted its line of Gemini AI large language models to power AI applications from Google, as well as its partners and customers. Google is also reportedly investing millions in AI chatbot startup Character.AI.
Beyond the cloud platform giants, just about every leading IT vendor has jumped aboard the generative AI bandwagon. Salesforce entered the generative AI race in March with its EinsteinGPT while in June Cisco said it had injected generative AI into its security and collaboration product portfolios for “reimagined” customer experiences. Also in June Hewlett Packard Enterprise entered the generative AI market with its HPE GreenLake for Large Language Models, a public cloud service that provides supercomputing capabilities in a consumption-based model. And In September SAP debuted its Joule generative AI copilot to work with its enterprise applications and Business Technology Platform.
Meanwhile; Nvidia’s stock price has soared this year, pushing the chip designer’s market value past the $1 trillion market, as ChatGPT and other generative AI applications fuel demand for the company’s data center GPUs and AI platform.
In July fast-growing data lakehouse platform company Databricks completed its $1.3 billion acquisition of generative AI platform startup MosaicML.
In September Dell Technologies created a new AI business unit and named Jeff Boudreau to be the IT giant’s chief AI officer. In October Lenovo said it would invest $1.2 billion in R&D around its ThinkEdge AI platforms and also struck an alliance with Nvidia to jointly develop hybrid AI solutions.
AI is also a major driver in the emerging AI PC space and the CPUs that will power them. Intel executives said the recent launch of its Core Ultra Meteor Lake processors, which include a neural processing unit to handle low-power AI tasks, will “usher in the age of the AI PC.” Intel is also providing engineering, design and marketing resources for ISV partners through the AI PC Acceleration Program.
IT security has been a major area for AI developments. Palo Alto Networks, for example, is developing its own large language model as the cybersecurity giant looks to embed generative AI into the company’s products and workflows. In April Google Cloud unveiled its Security AI Workbench that leverages generative AI models for better threat detection and analysis while SentinelOne launched a threat hunting tool that uses generative AI. And the RSA Conference 2023 in April was the launchpad for a wave of generative AI-powered cybersecurity products.
The channel is playing a major role in the AI surge and solution providers see significant GenAI opportunities in 2024. Established solution providers such as Innovative Solutions, World Wide Technology, Mark III Systems and SADA Systems—along with a new generation of solution provider startups such as Quantiphi—are racing to incorporate AI into their product and service offerings.
In June systems integrator and services giant Accenture said it would invest $3 billion over three years in its AI and data practice. In August AWS partner Innovative Solutions launched its Tailwinds generative AI offering (based on AWS Bedrock and Anthropic Claude technologies) that enables any application to be AI-powered. And in December World Wide Technology said it would invest $500 million over three years in generative AI, including building out a network of AI lab environments for testing and validating GenAI-based applications.
In December distributor TD Synnex launched a package of resources around Microsoft 365 Copilot, including sales and technical enablement, training, readiness tools, peer-to-peer collaboration and sharing, to help solution providers bring emerging GenAI technology to small and midsize businesses.