5 Companies That Had A Rough Week

The Week Ending Sept. 14

Topping this week's roundup of those having a rough week are the industry's PC manufacturers and their channel partners who are facing a shortage of Intel processors that could hurt sales this quarter.

Also making the list this week are Apple for its recall of some iPhone8 devices to fix a manufacturing defect; Google Cloud for losing another executive in its AI group, SAP for getting caught up in a South Africa kickback investigation, and data management company Veeam for leaving customer data unsecured on an AWS-hosted database.

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 Five Companies That Came To Win roundup.

PC Manufacturers Face Growing CPU Shortage

A shortage of Intel processors is causing shipment delays and higher prices for PC manufacturers and the solution providers who sell their products.

This week evidence mounted that the shortages are getting worse and that PC industry sales could be significantly impacted for the rest of the year – if not longer.

This week global market intelligence firm TrendForce said the supply gap for Intel notebook CPUs widened from 5 percent in August to between 5 and 10 percent this month, with the possibility of it growing to more than 10 percent later this quarter.

TrendForce also said the shortage could last well into the first half of 2019.

Apple Recalls Some iPhone 8 Devices To Fix Manufacturing Defect

While Apple was drawing attention to its new iPhone models this week, including the iPhone XS and XS Max, the company's time in the spotlight was tarnished somewhat when it issued a recall for a number of iPhone 8s to fix a problem with the device's logic board.

Apple said the problem could cause phones to unexpectedly restart, freeze or fail to turn on. The company said that only "a very small percentage" of iPhone 8 devices had the manufacturing defect.

The company said the iPhone8 devices covered by the recall were sold between September 2017 and March 2018 in the U.S., Australia, New Zealand, Japan, China, India, Hong Kong and Macau.

Google Losing Another AI Executive

Google Cloud's executive ranks for its artificial intelligence group may be getting a bit thin. This week the company said that Fei-Fei Li will step aside as head of the group at the end of the year.

Last month Apporv Saxena, Google Cloud's head of product management for AI, left for a job heading up the AI efforts at investment bank J.P. Morgan Chase.

Li will continue to serve as an advisor for Google Cloud's AI efforts and Google said that the plan was always for Li to return to her Standford University professorship.

Li will be replaced by Andrew Moore, currently dead of the School of Computer Science at Carnegie Mellon University.

SAP Contract Subject Of South Africa Kickback Investigation

South Africa's Special Investigating Unit is looking into whether a kickback of more than $2 million was paid for a state contract with software giant SAP.

South African President Cyril Ramaphosa has authorized the investigation of the $45 million contract SAP signed with the country's Department of Water and Sanitation in 2016, according to Bloomberg and Reuters stories.

SAP told Reuters that it is investigating all public-sector contracts in South Africa dating back to 2010 and the water department contract is part of its own investigation.

In March SAP acknowledged that company managers in South Africa paid more than $9 million to intermediary companies controlled by the Guptas, a powerful family in South Africa with ties to former president Jacob Zuma, in relation to five contracts with state-run electricity and rail companies. The managers were suspended and later resigned.

Data Management Company Veeam In Data Security Snafu

Veeam, the data management, backup and disaster recovery software developer, found itself in the uncomfortable situation of having to explain a data management failure that exposed millions of customer email records.

Security researcher Bob Diachenko discovered the unprotected AWS-hosted database with 200 gigabytes of names, email addresses and IP addresses last week and attempted to notify the company.

Diachenko, who went public with the news on LinkedIn on Tuesday, said the database remained publicly searchable and unsecured until Sept. 9 "when it was quietly secured after several notification attempts," he said.

The researcher said the database contained more than 445 million records, largely email addresses and other contact information apparently used by Veeam's marketing department to reach customers through the Marketo marketing application.

Friday Veeam blamed human error for the security lapse and said an investigation is underway, according to The Register.