5 Companies That Had A Rough Week

The Week Ending March 9

Topping this week's roundup of those having a rough week is systems integrator REAN Cloud, which lost out on a big defense contract it thought it had won.

Also making the list this week are Dell EMC, which reported a double-digit decline in its Q4 storage sales; VMware, which lost a key executive to Google; SAP, which admitted this week that several of its executives in South Africa had engaged in misconduct; and restaurant chain Applebee's, whose point-of-sale systems were hit by malware.

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.

REAN Cloud Loses Out On DoD Contract After Oracle Complaint

A massive Department of Defense contract that systems integrator REAN Cloud announced last month that it had won fell apart this week after Oracle argued that the selection unfairly benefited Amazon Web Services.

REAN Cloud, a Premier AWS partner, announced Feb. 7 that it had won the five-year contract, valued at up to $950 million, to provide cloud migration services to the DoD. The project involved implementing a custom system for automating the procurement of cloud resources for the military while maintaining price stability.

Oracle lodged a formal protest through the Government Accountability Office, saying the procurement process violated government procedures to ensure competitive bidding. REAN's deal was subsequently reduced to cover only a project for the U.S. Transportation Command, which the systems integrator had previously worked on, with a maximum value of $65 million.

In a statement, REAN Cloud said such opposition from "the old guard" of IT vendors would delay the modernization of U.S. defense infrastructure.

Dell EMC's Q4 Storage Sales Slump By Double Digits

Despite Dell EMC's massive push to boost storage system sales, parent company Dell Technologies this week reported that storage system sales declined 11 percent in the company's fourth fiscal quarter ended Feb. 28.

The 11 percent decline in storage sales to $4.2 billion came despite an overall increase in sales by Dell's Infrastructure Solutions group, which includes servers, networking and storage products.

"We have work to do in storage," said Jeff Clarke, vice chairman, products and operations at Dell, during the company's earnings conference call. "We need to get it going and growing in the right direction."

CFO Tom Sweet did put a positive spin on the news, saying that demand for storage products increased year-over-year – the first such increase since Dell acquired EMC for $67 billion in 2016.

VMware's Longtime Networking Chief Exits For A Job At Google

Jeff Jennings, the leader of VMware's increasingly vital networking and security business, has left the company to take a job at Google, CRN reported this week.

Jennings, who actually departed VMware on Feb. 16, had been with the company for 18 years as a vice president of engineering. For the last year and a half he served as senior vice president and general manager of the networking and security unit.

VMware's loss is Google's gain. Google confirmed that Jennings joined the team led by Diane Greene, VMware's founder and former CEO, who now runs Google's cloud business.

SAP Acknowledges Misconduct In South African Public Sector Deals

Software giant SAP released the results of an internal investigation this week that found there were compliance breaches and indications of misconduct by three SAP executives in public sector deals in South Africa.

SAP, in a statement, admitted it 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 software contracts with two state-run companies: electricity company Eskom and rail-freight company Transnet.

SAP said the three executives were suspended last year and have since resigned. SAP also said there was no evidence of direct payments to government officials.

The software vendor said that as a result of the investigation, it has made "significant changes to its global compliance processes," stepped up the mandatory annual compliance training required for all SAP Africa employee, and "allocated additional legal compliance staff" to its SAP Africa market unit.

Applebee's Restaurants' Point-Of-Sale Systems Hit With Malware

Malware designed to steal credit card data was found on the point-of-sale systems at more than 160 restaurants in the Applebee's chain.

This week RMH Franchise Holdings, which owns and operates the 160 Applebee's restaurants, said it discovered last month that malware had infected its point-of-sale systems, according to a story on the Threatpost website. The malware could have allowed hackers to steal customers' names, credit and debit card numbers, expiration dates and card verification codes.

Restaurants were impacted on varying dates, according to the Threatpost report, starting in either November or December of last year and continuing until January of this year.