5 Companies That Had A Rough Week
The Week Ending April 22
Topping this week's roundup of those that had a rough week are Intel and its employees -- the former for taking a hit from continuing declines in the PC market and the latter for planned widespread layoffs.
Also making the list were Dell and its SecureWorks subsidiary, for a less-than-stellar IPO; Microsoft, for missing third-quarter financial targets; ForeScout, for the departure of its recently hired channel chief; and Apple, for having to pay $25 million to settle patent litigation.
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.
Intel Faces Shrinking PC Market, Employees Face Layoffs
It was a tough week for both Intel and its workers. During the chipmaker's first-quarter earnings call Tuesday, CEO Brian Krzanich acknowledged that the PC industry -- once Intel's bread and butter -- continues to struggle and will decline at a high single-digit pace this year.
That's faster than earlier predictions. While the company plans to redouble its efforts in other industry segments like the Internet of Things and data center systems to make up for the shortfall, PCs still account for nearly 60 percent of Intel's sales. So Intel announced a major restructuring that it expects will reduce annual spending by $1.4 billion by next year.
And that's bad news for Intel employees, as the restructuring includes the elimination of some 12,000 jobs globally -- about 11 percent of Intel's workforce.
SecureWorks IPO Price Misses Expectations
Dell may have to work a little harder to finance its $67 billion acquisition of EMC after the initial public offering for its SecureWorks cybersecurity unit began selling at $14 per share Friday, significantly below the $15.50 to $17.50 range Dell had hoped.
The share price puts the market value of SecureWorks at just over $1 billion, far below the $1.42 billion value Dell once put on the subsidiary. And only 8 million shares of SecureWorks were sold instead of the 9 million Dell had originally planned on.
Overall, the SecureWorks' IPO raised only $112 million, below the $160 million to $180 million some observers had expected and even below the $134.3 million cited in the S-1 filing for the IPO with the U.S. Security and Exchange Commission on April 11.
SecureWorks doesn't plan on transferring the IPO proceeds to Dell. But Dell, which bought SecureWorks for $612 million in 2011, still owns 86 percent of the company after the offering and you can be sure it's counting on a higher share price to help finance the EMC acquisition.
Microsoft Misses Wall Street's Q3 Targets
Speaking of missed financial expectations, Microsoft reported disappointing third-quarter results Thursday, blamed on sluggish Windows software sales and profit declines in several of the company's business units.
Microsoft's net income for the quarter ended March 31 plunged 25 percent year over year, to $3.76 billion, and revenue declined 5 percent, to $20.53 billion.
Those figures, combined with guidance for the fourth quarter that also fell short of investor expectations, caused Microsoft's shares to fall more than 5 percent in after-hours trading, to $52.83.
ForeScout Loses Recently Hired Channel Chief
Tom Evans just joined ForeScout Technologies at the beginning of this year. So it must have come as a shock when he suddenly resigned from the network access control technology company to take a job with another company.
CRN learned this week that Evans, named vice president of Americas channel sales in January, resigned last week to take a sales and channel leadership position at K2 Software, a business process applications company.
Evans said the K2 Software job was a "once-in-a-lifetime opportunity" that he couldn't pass up. ForeScout has begun searching for a replacement.
Apple To Pay $24.9M To Settle Siri Patent Lawsuit
Apple will cough up nearly $25 million to settle a long-running lawsuit that charges Apple with infringing a patent covering natural language technology.
Apple launched its Siri iPhone digital assistant in 2011, and Texas-based Dynamic Advances sued Apple the next year claiming Siri violated a patent it held on natural language interface technology, according to the Washington Post. The patent was originally awarded to Rensselaer Polytechnic Institute as far back as 2007 and then licensed to Dynamic Advances. Rensselaer joined the suit in 2013.
The case had been scheduled for trial in Syracuse, N.Y., next month, according to the Washington Post story. Some of the $24.9 million settlement is expected to go to Marathon Patent Group, the parent company of Dynamic Advances.