The 16 Biggest News Stories Of 2016

2016: Acquisitions, IoT, Security Breaches And Exploding Phones

Compiling a list of the biggest news stories of the year is never an easy task. It's been an eventful 2016 in the IT industry and the channel – but what year isn't? While there were obvious blockbusters, it gets tougher as you get further down the list from the REALLY BIG stories and have to decide between many stories that were merely "big."

There were, as always, big acquisitions, from Dell completing its $65 billion buyout of EMC, to Oracle's $9.3 purchase of NetSuite. Some, such as CSC's merger with Hewlett Packard Enterprise's enterprise service business, won't be done deals until 2017. And some, like Verizon's $4.83 billion bid to buy Yahoo, may never materialize.

There were disasters such as Samsung's debacle with exploding Galaxy Note7 smartphones and Yahoo's disclosures of two huge security breaches. There were controversies like Microsoft's Windows 10 "nagware." And while the 2016 election consumed much of the country, IT became part of the narrative with stories about Hillary Clinton's email server and reports of Russian hacking.

Here, starting with No. 16 and working down to No. 1, are what we saw as the biggest news stories of the year.

16. Oracle Buys NetSuite For $9.3 Billion

Given that Oracle Chairman and CTO Larry Ellison was a major shareholder in NetSuite, Oracle's deal in July to acquire the cloud ERP, CRM and ecommerce application vendor was not entirely unexpected.

Nevertheless, the $9.3 billion acquisition, which was completed Nov. 7, was a major development in the volatile cloud applications arena where Oracle, SAP, Microsoft, and others are battling it out.

Oracle has vowed to continue offering NetSuite's applications "forever" (according to Oracle CEO Mark Hurd), targeting them toward SMB customers and co-existing with Oracle's enterprise-class cloud applications.

15. Broadcom Buying Brocade, Channel Uncertainty Ensues

Semiconductor maker Broadcom announced on Nov. 2 an agreement to acquire networking systems supplier Brocade Communications Systems for $5.9 billion. Big news. But Broadcom also said it was buying Brocade for its Fibre Channel SAN switching business and, once the acquisition is complete, will spin off Brocade's IP networking business – including Ruckus Wireless, which Brocade just acquired in May for $1.2 billion.

The result: A business left in limbo and channel partners left bewildered and confused about the future of the Brocade and Ruckus Wireless products and services. Solution providers told CRN that the uncertainty created by Broadcom's public announcement could lead to customers holding off on purchases of Brocade and Ruckus products.

As the year drew to a close, solution providers were holding off on making investments in Brocade, saying they don't know who will own it in three months. Some said competitors were using the uncertainty to muscle in on customers. And some Brocade competitors, including Aerohive, said they were getting calls from Brocade partners seeking a safe harbor.

14. Microsoft Windows 10 "Nagware" Upgrade Efforts Rile Customers, Partners

Windows 10 launched in July 2015 to generally good reviews, no doubt a relief to the software giant following the criticism the product's predecessor, Windows 8, received following its debut.

But the initial applause for Windows 10 turned to boos from some partners and consumers earlier this year as Microsoft's efforts to convince users to upgrade to the new OS became increasingly aggressive – some even calling the efforts abrasive and heavy-handed.

Partners complained about annoying Windows 10 upgrade pop-up windows and "nagware" buried in security patches. When Microsoft re-classified the upgrade from optional to "recommended," some users awoke to find that their PCs had upgraded to Windows 10 without their knowledge. Some customers even called Microsoft's efforts outright deceptive when on-screen messages recommending the upgrade seemed designed to trick users into accepting Windows 10.

Some Microsoft partners were already unhappy with the software giant over the company's decision last year – with little notice to the channel – to offer Windows 10 as a free upgrade for a year.

13. AT&T Buying Time Warner For $85.4 Billion

In October telecommunications giant AT&T struck a deal to acquire media and entertainment powerhouse Time Warner in a move to add more content, including television and streaming services, to its core connectivity services.

Under the blockbuster agreement, AT&T will pay $85.4 billion in cash and stock to buy Time Warner. AT&T, like other service providers, finds itself competing more often with content providers such as Netflix, Google and Facebook. Verizon, also looking to expand into content, already owns media provider AOL and has a deal to buy Yahoo for $4.83 billion.

The proposed merger is sure to be closely scrutinized by government regulators, and Wall Street has only given the deal a 40 percent chance of winning regulatory approval.

1 2. Distributor Ingram Micro Acquired By Chinese Logistics Giant For $6 Billion

It was a year of significant change and several blockbuster news stories in the distributor arena. One of the most important was the acquisition of Ingram Micro, the world's largest IT product distributor with annual sales of $46 billion, by Chinese logistics company Tianjin Tianhai, for $6 billion.

The acquisition by Tianjin Tianhai, part of the $29 billion HNA Group, was announced Feb. 17 and completed on Dec. 6, just days after Chinese antitrust authorities approved the deal.

Ingram Micro executives said having HNA Group, a China-based transportation and shipping company, as a parent would help the distributor build upon its global logistics and supply chain operations. The acquisition of the Irvine, Calif.-based company also resulted in some executive departures, including president and chief operating officer Paul Read, CFO William Humes, and executive vice president Larry Boyd, leaving CEO Alain Monie in charge.

11. Tech Data To Buy Avnet Technology Solutions

In another development that will remake the value-added distribution landscape, Tech Data announced Sept. 19 that it would acquire Avnet's $9.65 billion Technology Solutions business for $2.6 billion.

Tech Data, based in Clearwater, Fla., said buying the Avnet TS operations would supercharge its data center business, growing the share of overall revenue Tech Data now gets from data center sales from 29 percent to 45 percent and more than doubling non-GAAP operating income after cost savings.

Tech Data CEO Bob Dutkowsky said the acquisition would give his company the most complete product line of any distributor in the fast-growing data center space.

The distributors expect to complete the acquisition sometime in the first half of 2017.

10. IT And The 2016 Election

The biggest story of the year in the U.S. was the 2016 election and Donald Trump's unexpected victory to become the nation's 45th president. And information technology, from Hillary Clinton's controversial email server to Russia's alleged hacking of Democratic National Committee (DNC) servers, were often part of the headlines.

Clinton's use of a private email server was an issue throughout the year as critics charged her with putting national security at risk. While the FBI did not bring criminal charges, FBI Director James Comey called Clinton's actions "extremely careless, " and solution providers said the issue should serve as a warning to businesses.

With the election over, the IT industry wondered what impact Trump's economic and technology policies would have. Earlier this month Cisco Systems CEO Chuck Robbins said Trump's tax repatriation plan would spur massive growth for Cisco and its partners. On Dec. 14, Trump met with leaders of some of the industry's biggest companies as tech execs sought to get their agenda in front of the president-elect.

And in December controversy erupted when the CIA concluded that Russian hacks of DNC emails might have aided Trump's election, leading to calls for investigations of the security of the country's election systems.

9. Cisco Sees Executive Exodus In Its Engineering Operations

Chuck Robbins began making changes at Cisco Systems as soon as he became CEO in July 2015. But the shakeups at Cisco continued into this year and even seemed to accelerate as the giant networking technology company sought to change course, seeking to become a more nimble, more innovative business and shifting focus from commodity network hardware to software and services.

In 2016 the upheaval was greatest within its engineering operations. In May came news that Nick Earle, the "founding father" of Cisco's cloud strategy, planned to leave the company by year's end. Partners told CRN there was an internal power struggle underway when four top engineers left in early June. Other exiting executives included enterprise engineering leader Robert Soderbery and longtime network leader Pankaj Patel.

The exodus seemed to reach its peak in October when Zorawar Biri Singh, Cisco's CTO and senior vice president of Cloud Services and Platforms, was leaving the company after just 15 months on the job.

8. Massive Security Breaches At Yahoo Endanger $4.83 Billion Acquisition By Verizon

Yahoo this year reported not one, but two massive security breaches that threatened to undo a deal under which the Internet portal company would be acquired by communications giant Verizon for $4.83 billion.

The first shock came in September when Yahoo disclosed that a 2014 cyberattack had compromised more than 500 million user accounts – and admitted it had known about the incident since earlier in the summer. In December Yahoo announced that another security breach in August 2013 exposed information from 1 billion users – the largest known security data breach at any company.

News of the two incidents raised questions if Verizon would go ahead with the planned acquisition – or would at least seek a lower acquisition price given that some now see Yahoo as damaged goods. By year's end, Verizon was still mulling its next move.

7. Apple Reports Its First Revenue Decline In 15 Years

The questions about Apple as an industry creative force under CEO Tim Cook grew louder this year. Summing up the views of many was an Aug. 24 USA Today headline that read: "Tim Cook At 5 Years: More Profits, Less Innovation."

But in October even that maxim failed when Apple reported fiscal 2016 sales and profits that were down from fiscal 2015 – the company's first year-over-year sales decline since 2001.

Apple reported slower sales of iPhones and iPads in the fourth quarter, along with a significant decline in sales of the company's then-aging line of Mac laptop and desktop computers. (The company debuted new Macbooks in late October.)

Apple remains a huge, highly profitable company and a leader in the IT industry. But in 2016 the company just didn't seem as infallible as it has for many years.

6. Microsoft Buys LinkedIn For $26.2 Billion

Some people, at first, scratched their heads in June when Microsoft announced a deal to acquire LinkedIn, the social media network for professionals, for $26.2 billion. It was the biggest acquisition in the software giant's history and the price tag was a roughly 50 percent premium on the company's market capitalization.

But soon Microsoft's plan became clear. Integrating Microsoft's Dynamics CRM applications and Office 365 productivity apps with the information LinkedIn has on its 433 million members will provide a wealth of opportunities for the company and its channel partners to offer services that help business people develop contacts and recruit new employee talent.

Microsoft completed the acquisition on Dec. 8. In a blog post Microsoft CEO Satya Nadella wrote that the joining of the two companies will ultimately "help professionals transform how they work, realize new career opportunities and connect in new ways."

5. Apple And The FBI Engage In Legal Battle Over Terrorist's iPhone, Ignite Debate Over Privacy Versus Security

Following the December 2015 terrorist attack that killed 14 people in San Bernardino, Calif., the FBI recovered one of the attacker's mobile phones – an Apple iPhone 5C. Unable to access the phone's locked and encrypted data, the FBI in February asked Apple to develop software that would disable the phone's security features.

That set off a very public debate over individuals' right to privacy versus law enforcement's need to protect the public. Apple refused the FBI's request, maintaining it would undermine the security of its products and set a dangerous precedent. Apple critics argued the company should assist law enforcement. The debate played out in such public venues as the RSA Conference in San Francisco in early March.

A U.S. magistrate judge issued an order requiring that Apple comply with the FBI's request, but Apple appealed. Before the case proceeded further, the dispute came to an abrupt halt on March 28 when the FBI announced that it had successfully hacked into the phone with help from an unnamed third-party company.

While the immediate legal dispute came to an end, the larger questions were left unresolved and no one doubted there would be more debates on the issue.

4. IoT Drives Acquisitions And Spending Plans – And Raises Security Questions

Bain forecasts that by 2020 annual revenue for suppliers of Internet of Things hardware, software and comprehensive solutions will exceed $470 billion. In 2016, however, the IoT market was more potential than reality.

IoT, nevertheless, was big news this year because it was a major driver of IT industry activity, from blockbuster acquisitions and partnerships, to big-bucks product development initiatives.

Cisco's $1.4 billion acquisition of cloud-based IoT services provider Jasper Technologies in February was an early example. In October Qualcomm, looking to expand its IoT sales reach, moved to buy NXP Semiconductors for a whopping $47 billion. And Verizon expanded its IoT technology portfolio by acquiring Fleetmatics for $2.4 billion and IoT startup Sensity.

On the development side, Google launched Android Things, an IoT operating system, to accelerate IoT application development. SAP vowed to spend $2.2 billion over the next five years on IoT technology initiatives. And Intel, betting big on IoT, launched an IoT platform for managing network device connectivity and security, and debuted the E3900 Series of Atom processors for IoT applications.

But not all the IoT news was bullish. In October Internet performance management company Dyn was hit by a massive distributed denial-of-service attack launched from thousands of unprotected networked devices. By year's end vendors, security analysts and government security experts were raising the alarm about the potential security risks of IoT.

3. Samsung Discontinues Incendiary Galaxy Note7 Smartphones

The first reports of Galaxy Note7 phones catching fire began trickling in around late August. Within weeks the problem had mushroomed into what arguably became the biggest product safety debacle in the history of the IT industry and seriously tarnished the reputation of one of the industry's biggest vendors.

Samsung halted shipments of the devices and then began recalling them as the reports of fires and even explosions mounted. Videos of burned phones and damaged property went viral online and airlines banned the devices from their flights. On Sept. 15 the U.S. Consumer Product safety Commission ordered that all 1 million Galaxy Note7 devices sold in the U.S. be recalled.

Samsung developed what it thought was a fix for the problem and began issuing replacement phones. But when consumers began reporting that the replacements were also overheating and catching fire, Samsung halted all production and sales of the product and announced that it would be permanently discontinued. In the end, Samsung sent fireproof boxes to Galaxy Note7 owners so they could safely send the devices back to the manufacturer.

2. CSC, HPE Enterprise Services Merging To Form Solution Provider Powerhouse

On May 24, CSC and Hewlett Packard Enterprise announced that HPE would spin off its Enterprise Services business and merge it with CSC to create what will become the third largest solution provider in the market with 5,000 clients and annual revenue of $26 billion.

The news came on the heels of drastic periods of transformation at both companies. Just last year HPE was created through the split of Hewlett-Packard Co. into two companies. And CSC spun off its federal business and merged it with SRA International.

The deal starkly illustrates how quickly the dynamics of the IT industry are changing and the pace of corporate acquisitions and divestitures is accelerating as companies seek to re-invent themselves.

The companies expect to complete the merger by March 2017.

1. Dell Completes EMC Acquisition, Works To Integrate The Two Businesses And Their Channel Operations

Nearly a year after the deal was first announced, Dell completed its $65 billion acquisition of EMC on Sept. 7. The move created Dell Technologies, a privately held IT behemoth and channel powerhouse with designs on dominating markets from budget PCs to data center infrastructure and cloud computing.

Throughout the year the acquisition moved inexorably along through approvals by EMC shareholders in July and Chinese antitrust authorities in August. To help defray the cost of the acquisition, Dell took steps to sell off other businesses including Dell services and its software division that included such products such as Quest and SonicWall.

But now the real work begins as Dell integrates EMC's operations – including its channel programs – with its own. Channel veteran John Byrne was named global channel chief of Dell EMC and in October the company rolled out key elements of the company's new channel program – including strict deal protection rules. But other program components, including its rebate structure, remained unsettled and in early December CFO Tom Sweet said partners may face disruption as integration of sales forces and channel programs proceed.