5 Companies That Had A Rough Week

The Week Ending March 27

CRN looks at five tech companies that had a rough week, including EMC getting hit with twin Wall Street downgrades, NetApp losing a top executive, VMware dealing with OpenStack claims, Intel losing a top exec, and IBM facing a tough future.

EMC Gets Downgraded, Twice

Some Wall Street analysts think EMC is going to have a tough time keeping up with all the young whippersnappers in the storage market.

First, Piper Jaffray cut its rating from "neutral" to "overweight" and cut its target price from $30 to $27. Then, Pacific Crest downgraded EMC to "sector perform" from "outperform," pointing out that it sees EMC facing "increasing seasonal, secular and competitive risks."

EMC continues to promote the advantages of its federation of subsidiary companies, but it looks like Wall Street is concerned about the momentum some of its startup competitors are generating in the storage market.

NetApp Loses A Top Storage Exec To Startup Rival

Brian Pawlowski, a 20-year NetApp senior vice president who was one of the vendor's most visible figures in the storage industry, left last week to take a position at Pure Storage.

Pawlowski had been leading development of FlashRay, NetApp's FlashRay all-flash storage array, and sources told CRN this week the future of that product is now unclear.

The fact that Pawlowski joined Pure Storage, one of the many young startups that are aiming to steal customers from NetApp, can't have gone over well with the longtime storage vendor.

VMware's PayPal Relationship Once Again Has Doubt Cast Over It

PayPal is a big VMware customer and uses its server virtualization technology in its massive worldwide e-commerce operations. But PayPal also is using OpenStack, and after the company penned a blog post talking about its OpenStack-powered internal private cloud, Forbes concluded that this meant PayPal was ditching VMware entirely.

While OpenStack could threaten VMware's business long term, PayPal hasn't said anything about dumping VMware. This same debate erupted two years ago when OpenStack integrator Mirantis revealed that PayPal was planning to shift 10,000 of its servers to run on OpenStack.

OpenStack works with VMware's ESX hypervisor, so VMware does not always lose just because a customer wants to test the open-source waters. If PayPal had switched from VMware ESX to the KVM hypervisor, that would be a different story.

Intel Loses 33-Year Veteran Exec Who Led Development Of Pentium Chip

Mooly Eden, an Intel vice president and one of the vendor's most visible public figures, has left the vendor after 33 years.

Eden moved around within Intel quite a bit over the years, but he's perhaps best known outside the company for leading development of mobile microprocessors and chipsets, including the Pentium M and Centrino.

Eden also previously held the role of vice president and general manager of Intel's Mobile Platforms Group, and since 2009 has been vice president and general manager of the PC client group, according to his LinkedIn profile.

IBM Headed For 'Painful Multiyear Transition,' Says Credit Suisse

Credit Suisse, in a report published this week that looks at the future prospects of several tech vendors, said IBM is facing difficulty as part of its ongoing restructuring and shift to cloud services.

"We find alarming evidence of underinvestment and internal dissatisfaction which suggests in almost all scenarios IBM is set for a painful multiyear transition," Credit Suisse analyst Kulbinder Garcha said, as reported by MarketWatch.

Last month, IBM CEO Ginni Rometty (pictured) told Wall Street analysts the company will make a $4 billion investment in cloud, mobile and analytics, and expects to reap $40 billion in annual revenue for those lines of business by 2018.