Channel programs News
The 20 Top News Stories Of 2020
The impact of the COVID-19 pandemic, the IT industry’s response to the social justice movement, a failed corporate takeover attempt, the division of the oldest IT vendor into two companies, and the most extensive cyberattack in years. It has been a very tumultuous 2020.
A Tumultuous 2020
The year 2020 has been like no other.
The year got off to a promising start with the booming economy generating strong demand for IT products and services.
But then the COVID-19 pandemic struck, followed by a shuttered economy, a recession and a new work-from-home reality for millions of workers. And then an already unsettled nation found itself in the midst of widespread protests against racial injustice after the death of George Floyd, a Black man, while being held down by a Minneapolis police officer.
How the IT industry and the channel have dealt with those challenges are among the biggest news stories so far in 2020. But the year also has been filled with many of the kinds of big stories the IT industry sees every year, from tech executive comings and goings, acquisition deals (both successful and failed) and spinoffs, security breaches, and the rapid evolution of IT itself.
Here’s our list of the top 20 news stories of 2020. Take a look and see if you agree with our choices.
20. Tech Data, Ingram Micro Acquired By Private Equity Firms
In 2020, two of the IT industry’s biggest distributors were involved in acquisition deals by private equity firms, a development likely to accelerate changes that IT distributors have been undergoing in recent years.
On Dec. 9, distributor Ingram Micro agreed to be acquired by Platinum Equity Partners in a deal valued at $7.2 billion. The acquisition, expected to close in early 2021, ends Ingram Micro’s four-year ownership by HNA Group, a Chinese company that has been hobbled by debt from a heavily leveraged acquisition binge.
Irvine, Calif.-based Ingram said the deal would provide the distributor with “added flexibility and resources to accelerate growth and execute on strategic initiatives.”
On June 30, private equity firm Apollo Global Management completed its $6 billion acquisition of Tech Data Corp., taking the publicly held distributor private. The acquisition deal was announced in November 2019.
CEO Rich Hume has continued to lead Clearwater, Fla.-based Tech Data under its new ownership and in September the distributor hired channel veteran Sammy Kinlaw as senior vice president of endpoint solutions for the Americas region.
The acquisitions could lead to a “distribution renaissance,” observers said, by allowing distributors to take a longer-term view of the distribution market and provide more custom solutions for channel partners. With the backing of private equity heavy hitters, distributors are also better positioned to drive new value for leading solution providers like CDW, Insight and Computacenter.
19. Google, Facebook Targets Of U.S. Government Lawsuits
Facebook, Apple, Amazon and Google have been under increased government scrutiny in recent years for their business practices, acquisitions and other activities that critics say are anti-competitive and violate antitrust laws.
This year that scrutiny turned to legal action when the U.S. Department of Justice and 11 states filed an anti-trust lawsuit against Google and the U.S. Federal Trade Commission sued Facebook in a bid to unwind its acquisitions.
In a lawsuit filed Oct. 20, the DOJ called Google “a monopoly gatekeeper” and said the company has “willfully maintained and abused its monopoly power” in general search services, search advertising and general search text advertising through “anti-competitive and exclusionary distribution agreements” in violation of antitrust laws.
The lawsuit is the biggest antitrust case since the U.S. government’s lawsuit against Microsoft in 1998. Google, in a statement, called the lawsuit “deeply flawed.”
In early October a 450-page report from the House Judiciary Antitrust, Commercial and Administrative Law Subcommittee concluded that Google Cloud tried to manipulate customers into using its Google Meet videoconferencing tool instead of rival Zoom and said the company tried to stifle competition by acquiring multi-cloud solutions and making them compatible only with its own cloud infrastructure.
On Dec. 9, meanwhile, the FTC filed its own antitrust lawsuit against Facebook maintaining that Facebook’s acquisitions of Instagram and WhatsApp constituted anti-competitive behavior and could force Facebook to divest the two applications.
18. Snowflake’s Blockbuster IPO
Expectations were high when Snowflake, one of the most successful Silicon Valley startups in recent years, went public on Sept. 16. But the data cloud platform company’s IPO turned out to be a blockbuster – one of the biggest IPOs of the year and one of the largest ever software company IPOs.
Snowflake shares, initially priced at $245, quickly surged to $300 a share when trading began before settling back later in the day. The IPO raised $3.36 billion and gave the company a market capitalization of $73 billion – bigger than such IT industry giants as Dell Technologies and VMware. (As of the close of trading Dec. 18, the company’s shares were trading at $334.25, giving the company a market cap of nearly $95 billion.)
Snowflake, founded in 2012, initially positioned itself as a cloud-based data warehouse service provider, but has since broadened its appeal to include a range of cloud-based data management services.
On Dec. 3, Snowflake reported that revenue for its fiscal 2021 third quarter (ended Oct. 31) soared nearly 119 percent year-over-year to $159.6 million, indicating that the company remains on a rapid growth trajectory.
17. Salesforce Strikes $27.7B Deal To Buy Slack
Cloud application giant Salesforce.com announced on Dec. 1 a deal to acquire Slack Technologies, developer of the popular Slack online collaboration service, for a whopping $27.7 billion. The announcement confirmed reports that had been circulating for several weeks.
The acquisition is the largest in Salesforce’s history and one of the biggest in the IT industry this year, behind AMD’s $35 billion deal to buy high-performance chip maker Xilinx and eclipsing Sprint’s $26.5 billion acquisition of T-Mobile, which closed April 1.)
Salesforce’s purchase of Slack, which the companies expect to complete around the middle of 2021, sets up a competitive collision between Salesforce and application rival Microsoft with its fast-growing Teams software.
While Slack will continue to operate as separate business unit, Salesforce plans to integrate the Slack Connect collaboration software with its own applications and make them the front-end “engagement layer” for the entire Salesforce portfolio, presenting Salesforce application workflows to users.
16. Pentagon JEDI Controversy Continues As AWS Pursues Legal Action To Overturn Microsoft Win
The controversy and legal posturing over the massive JEDI (Joint Enterprise Defense Initiative) cloud transformation service contract, with a potential value of $10 billion, continued through 2020.
In October 2019 the U.S. Department of Defense chose Microsoft and its Azure cloud platform for JEDI. The contract had already been the source of controversy for nearly two years as potential bidders, including Amazon Web Services, Microsoft, Oracle, IBM and others, engaged in legal wrangling over the Pentagon’s decision to award the entire contract to a single vendor. Many industry observers believed the way the project was structured gave AWS a virtual lock on the deal.
After the award went to Microsoft, Amazon almost immediately filed a legal challenge to the Pentagon’s decision saying pressure from the White House against awarding the contract to AWS constituted “unmistakable bias” in the procurement process. President Donald Trump has made negative comments about AWS and CEO Jeff Bezos, who also owns the Washington Post.
In January AWS asked a federal court to prevent the Defense Department from beginning to implement the JEDI contract with Microsoft – a request that was granted by a federal judge in February. The Pentagon asked for more time to reconsider aspects of how it evaluated vendor bids and the same federal judge remanded the case back to the Pentagon for a review.
A report issued in April by the Defense Department’s Inspector General, following its own review of the contract award, found no evidence that Trump’s expressions of animosity toward Amazon influenced the decision to award JEDI to Microsoft.
On July 30 the Defense Department’s CIO said the Pentagon would update its decision – in what the CIO called “a re-announcement” of the Pentagon’s JEDI contract award. On Sept. 4 the Department of Defense said it had completed its re-evaluation of the contract solicitation process and re-affirmed the award of the contract to Microsoft.
Meanwhile, the war of words between Microsoft and AWS heated up. In May, after AWS filed another protest with the Pentagon, Microsoft’s corporate vice president for communications issued a statement saying that AWS was looking for a “re-do” of the contract award process and called on AWS to “stand down on its litigation” and get “out of the way.” Amazon quickly responded with its own blog post saying it would do no such thing.
AWS has vowed to continue fighting what it calls the “politically corrupted contract award” and alleged bias from the Trump Administration. In an amended complaint in the U.S. Court of Federal Claims filed Dec. 15, AWS continued its challenge of the JEDI contract decision – ensuring that the already long-running controversy would continue into 2021.
15. Cloud Service Outages Cause Widespread Disruptions
Even before 2020 businesses and organizations had become increasingly dependent on major cloud service providers like Amazon Web Services, Microsoft and Google for their IT capabilities and applications. When the COVID-19 pandemic hit early this year, turning many businesses into virtual organizations almost overnight, that reliance on cloud services became almost inescapable.
So, when significant cloud service outages occurred this year, their impact was magnified.
In what may have been the most disruptive series of service outages of the year, Microsoft Office 365 – including Teamsite, Outlook, SharePoint Online and other applications – were unavailable or suffered degraded performance over a 10-day period in late September and early October. Microsoft blamed the Oct. 7 outage on a recent network update. (A software “code issue” was cited as the cause of a five-hour outage on Sept. 28 outage.) Partners said the outages could be signs that Microsoft was overwhelmed by the demand for its cloud infrastructure services.
In a sign of the ripple effect such outages can have, ConnectWise MSP partners were unable to access the company’s management tools, including its BrightGuage business intelligence service, because of a massive AWS outage that hit server clusters on the East Coast on Nov. 25. On Nov. 30 AWS apologized for the system failure that affected thousands of third-party online services and dozens of AWS services for hours.
The big cloud service providers weren’t the only companies with service hiccups. A July 17 Cloudflare outage, apparently caused by a malfunctioning router on the company’s backbone network, brought down a number of web services around the world. Source code repository GitHub suffered multiple service outages in late April, causing headaches for developers. In August online videoconference company Zoom, apparently suffering its own growing pains, experienced a partial outage that disrupted business meetings, school sessions and more. And Salesforce.com’s applications were offline for almost four hours Dec. 1 because of a virtual server problem.
As 2020 wound to a close, a brief, but widespread Google Cloud outage on Dec, 14 took down multiple Google services including Google Workspace, YouTube and Gmail. The disruption was blamed on an “authentication system issue.”
14. Xerox Pursues, Then Abandons Acquisition Bid For HP Inc. In Wake Of Pandemic
In early November 2019, Xerox stunned the industry when it launched an unsolicited bid to buy HP Inc., its leading competitor in the printer market, for $22 per share or $33 billion. HP rejected the Xerox offer on Nov. 24 saying it significantly undervalued the company. Two days later Xerox said it would launch a direct appeal to HP stockholders, asking them to sell their shares to Xerox.
The takeover effort became one of the biggest stories in early 2020 as the two companies’ posturing and financial maneuvering continued into the new year with Xerox CEO John Visentin making the argument that combining Xerox and HP would create a $66.8 billion printer juggernaut. Xerox threatened to nominate 11 candidates for HP’s board of directors (later adding a 12th), to which HP responded with a shareholder rights plan and a promise to return $16 billion in capital to shareholders over the next three years.
But the COVID-19 pandemic threw a wrench into Xerox’s plans. To stop the spread of the virus regions of the U.S. began shutting down large segments of their economies (a recession officially began in February) and stock markets tumbled. That jeopardized Xerox’s bid to acquire HP because its buyout offer included a combination of cash and Xerox stock – the latter based on the $37.68 closing price of Xerox shares on Feb. 6. On March 9, Xerox stock closed at $27.50.
On March 13 Xerox said it was hitting the pause button on its bid to acquire HP, saying that amid the pandemic and faltering economy the company needed to “prioritize the health and safety of its employees, customers, partners and affiliates over and above all other considerations.”
On March 31, citing the global health crisis and “resulting macroeconomic and market turmoil,” Xerox officially ended its takeover bid saying it was withdrawing its tender offer to buy HP shares and pulling the slate of 12 nominees for the HP board.
13. The IT Industry Accelerates The Rollout Of 5G
The 5G wireless standard won final approval in 2018, but 2020 will be remembered as the year the IT and telecommunications industry hit the accelerator on rolling out 5G capabilities to the channel and their customers.
5G promises dramatically faster speeds, instantaneous communication and the ability to connect everything from autonomous vehicles to Internet of Things devices to the network. 5G is also proving to be a critical component – and major driver – of edge computing, a significant IT industry development.
This year, the industry’s largest communications carriers have been racing to build out their nationwide 5G networks. AT&T is counting heavily on 5G as a way to step up its competitive game and in 2020 the carrier has been rolling out its low-band 5G network. The company also joined forces with Google Cloud to enable 5G networking and edge computing services via Google’s Global Mobile Edge Cloud.
Following its April merger with Sprint, T-Mobile has brought together low-band, mid-band and high-band millimeter wave technology to complete its three-layer vision for 5G. T-Mobile also shut down Sprint’s 5G network and began moving customers to the T-Mobile 5G network in July. The company even brought its 5G network to Alaska. And Verizon has pursued a strategy to use only millimeter wave or high-band spectrum technology, which it developed before the 5G standard was set.
The action goes far beyond the telecommunications giants. Intel, for example, is developing processors the company says will provide the foundation for 5G system infrastructure. In February the company debuted the Intel Atom P5900 processor designed for 5G’s high-bandwidth and low-latency requirements. In June chipmaker Qualcomm unveiled its Robotics RB5 platform, which the company said will help pave the way for the proliferation of 5G in robotics and intelligent systems.
In July Hewlett Packard Enterprise launched the HPE 5G Lab for service providers and customers to test their 5G use cases. In September Microsoft offered its playbook for communications service providers using the Azure cloud platform. Dell and VMware executives in October touted the role of their companies’ integrated products to help service providers build 5G infrastructure. And in November application delivery specialist F5 Networks launched its 5G portfolio to support the deployment and management of 5G services while startup Celona unveiled its LTE/5G platform to unite Wi-Fi and cellular connectivity.
The Federal Communications Commission, meanwhile, has sought to accelerate wireless infrastructure upgrades to 5G by speeding up state and local government reviews of proposed upgrades for wireless transmission equipment.
5G hasn’t been without controversy. The U.S. government has been fighting to keep network equipment manufactured by Chinese communications giant Huawei out of nascent 5G networks in the U.S. Those efforts reportedly included a plan for the government to work with companies like Microsoft, Dell Technologies and AT&T to develop 5G software that would provide an alternative to Huawei.
12. IBM, AT&T And Dell Technologies Among The Companies Making CEO, Channel Management Changes
The year 2020 has seen a wave of changes both in the top tiers of some of the IT industry’s biggest vendors and in their channel management ranks.
Among the most notable was the Jan. 30 news that IBM CEO Ginny Rometty would step down after eight years in the position during which IBM expanded into new areas such as cloud and AI but struggled to achieve revenue growth. The company named Arvind Krishna, IBM’s senior vice president for cloud and cognitive software, as Rometty’s replacement as CEO effective April 6.
IBM also named James Whitehurst, CEO of Red Hat, which IBM acquired last year, as IBM president. Paul Cormier, Red Hat’s long-time product chief, was appointed to replace Whitehurst as Red Hat CEO.
In April AT&T announced that Randall Stephenson, CEO of the telecommunications giant for 13 years, would retire effective July 1 and be succeeded by John Stankey, then AT&T’s president and chief operating officer.
In August Nutanix CEO Dheeraj Pandey surprised many when he announced he was retiring from the company he started 11 years earlier and had grown into a $1.6 billion leader in hyperconverged infrastructure software. Nearly as surprising was the announcement in December that Rajiv Ramaswami, COO at rival VMware, had been hired to take over the CEO post.
This year has also seen significant changes among channel leadership at some of the IT industry’s biggest vendors. On July 9 Joyce Mullen, Dell Technologies’ worldwide channel chief, unexpectedly announced that she was stepping down and leaving the company in August after 21 years. Rola Dagher, who has been managing Cisco’s Canadian operations, took over as Dell Channel Chief Sept. 7. Paul Shaffer, Dell Technologies’ longtime channel sales and marketing executive, also left the company in August.
VMware confirmed on July 14 that global channel chief Jenni Flinders had left the company in June after leading the company’s channel operations for two years. Her departure came just months after the company launched its new Partner Connect channel program. Flinders was replaced by former Cisco Systems veteran Sandy Hogan as senior vice president of Worldwide Commercial and Partner Sales.
And in August Paul Hunter, Hewlett Packard Enterprise’s global channel chief, was named HPE North America managing director after the unexpected news that Dan Belanger was stepping down from that post. That followed a number of management changes at HPE this year including the appointment in July of John Schultz, the company’s chief legal and administrative officer, to be HPE’s new chief operating officer.
In August, Area 1 Security scored a coup when it hired channel superstar Steve Pataky away from Ubiq Security to be its new channel chief. And in December Verizon named company veteran Wendy Taccetta to be its new channel chief following a three-year restructuring of the company’s indirect business and rapid changes in channel leadership.
This hasn’t been a great year for co-CEOs. On Feb. 25, came the surprising news that Keith Block, who had been working as co-CEO at Salesforce with company founder Marc Benioff, was stepping down and leaving the company. No reason for Block’s decision was disclosed. Benioff is now serving as the sole CEO. And at SAP, where Christian Klein and Jennifer Morgan had been serving as co-CEOs since October following the departure of then-CEO Bill McDermott, the company decided in April to return to a single CEO management structure and Klein was given the job.
Other CEO appointments of note in 2020 include the appointment of former BMC Software and Polycom CEO Peter Leav to be CEO at newly public security vendor McAfee. Former Symantec CEO Greg Clark was hired as Forescout’s CEO just weeks after the company was acquired by Advent International. Systems integrator and IT services giant Wipro named Thierry Delaporte to be its new CEO, while IGEL tapped U.S. CEO Jed Ayres for the company’s top job and Optiv Security hired 20-year Deloitte veteran Kevin Lynch to be its new CEO. David Goeckeler, executive vice president and general manager of Cisco Systems’ networking and security business, left in April to become CEO of Western Digital. And Telecom industry veteran Dave Shull was hired as Poly’s new CEO in August.
11. IBM To Split Into Two Companies, Create New Channel Services Giant
In October IBM surprised the industry when it announced a plan to split into two companies, spinning off its Global Technology Services (GTS) managed infrastructure services unit into a new publicly held company. IBM expects to complete the split by the end of 2021 – a move that will likely reorder the top ranks of the CRN Solution Provider 500.
The result will be two companies focused on separate market opportunities: IBM on developing cutting-edge technologies for hybrid cloud computing and digital transformation; and the new company on managing client-owned IT infrastructure.
The new, as-yet-to-be-named company will have annual revenue of $19 billion, a $60 billion services backlog, and 4,600 clients in 115 countries, according to IBM.
The 109-year-old IBM will retain $8 billion of the GTS cloud services consulting business as well as the $17 billion Global Business Services unit, the IBM systems business, and software products around big data, AI and security.
IBM also has Red Hat, acquired for $34 billion in 2019, which now becomes even more critical to the company’s strategy of focusing on hybrid cloud computing.
10. IT Plays Critical Roles – And Creates One Disaster – In The 2020 U.S. Election
The U.S. election was a top news story through 2020 and IT had an important role to play – for better and for worse.
Perhaps the biggest IT-related news was the spectacular failure of a smartphone application used to collect, tabulate and transmit the results of the Iowa Democratic caucus on February 3 – the first contest of the 2020 election season. While the application appeared to work during the vote collection stage, it failed when caucus officials tried to report totals and much of the process had to be done manually – delaying the final results for more than three weeks.
The application that turned the caucus into a fiasco was designed by Shadow Inc., a company made up of political operatives and technology workers who previously worked for the Hilary for America and Obama for America organizations.
Social media, especially Facebook and Twitter, became a major front in campaign battles from the presidential race, to congressional and local elections. Critics said social media at times amplified what was already a bitter election season.
And there were concerns that the election could be disrupted by hackers – either domestic or state-sponsored. But there proved to be no major issues on election day – there were reports that U.S. Cybercommand undertook proactive cyber operations to forestall possible attacks.
9. Channel Consolidation
Every year sees a number of acquisitions throughout the channel community and 2020 was no different. This year was notable as a number of leading strategic service providers and systems integrators snapped up smaller solution providers with specific technology and expertise to expand their service offerings.
While channel merger and acquisition activity slowed early in 2020 at the onset of the pandemic, it resumed its pre-pandemic pace later in the year.
Global systems integrator Cognizant was particularly active on the acquisition front this year, looking to broaden its services portfolio around Microsoft software to support its recently formed Microsoft Business Group. The company bought Bright Wolf, a Microsoft and AWS partner focused on industrial IoT; New Signature and its broad portfolio of Microsoft-related services; and 10th Magnitude, a solution provider with deep expertise in the Azure platform.
Growing its Microsoft-related business was also behind the December announcement from Sirius Computer Solutions that it was buying Champion Solutions Group – including its MessageOps business unit that’s focused on cloud monitoring and management for Microsoft 365 and Microsoft Azure.
In September AHEAD, one of Dell Technologies’ biggest channel partners with a focus on digital transformation, struck deals to acquire RoundTower Technologies and Kovarus, creating a $2.1 billion channel behemoth. Trace3, meanwhile, sought to expand its geographical reach through its deal in November to buy channel stalwart Groupware Technology.
8. Dell Considers Plan To Spin Off VMware
Dell Technologies disclosed in July that the company is mulling a plan to spin off VMware, the virtualization technology leader in which Dell owns an 81 percent stake. Dell’s acknowledgement confirmed reports about a possible spin off that had been circulating for several weeks.
On July 15 Dell, in a filing with the U.S. Securities and Exchange Commission and in a company statement, disclosed that it was in the early stages of exploring whether it might spin off its equity stake in VMware. Dell said such a move would benefit shareholders of both companies, as well as employees, customers and partners, “by simplifying capital structures and creating additional long-term enterprise value.”
Dell acquired the stake in VMware in 2016 as part of its blockbuster acquisition of storage company EMC in 2016 for $67 billion. There has been periodic speculation, including in December 2018 when Dell became a public company, that Dell might acquire all of VMware or spin it off entirely. (Dell did buy back the VMware tracking stock that was issued at the time of the EMC acquisition.)
But beyond the ownership structure, Dell and VMware have built an extensive strategic relationship that includes co-developing the VxRack hyper-converged, rack-based infrastructure system and the VxRail hyper-converged infrastructure appliance. At the virtual Dell Technologies World Digital Experience in October, for example, executives from the two companies touted how the Dell-VMware combination will help service providers build infrastructure for 5G networks.
While talking up the potential benefits of a spin off for both companies’ shareholders, Dell executives have been careful to emphasize that even if Dell executes a spinoff of its VMware stake, the two companies’ tight technology and go-to-market partnership won’t be disrupted. In an interview with CRN in September CEO Michael Dell said that spinning off Dell’s stake was not “selling VMware.”
The company said a spinoff wouldn’t happen before September 2021. Dell said it’s also evaluating “a range of strategic options concerning its ownership of VMware,” including retaining its ownership stake as it stands. Should a spin off occur the two companies would have to establish formal agreements to replace the current Dell-VMware relationship around research and development, intellectual property, go-to-market and services.
7. Living On The Edge (Computing)
Edge computing, perhaps the biggest IT development since cloud computing, was hot in 2020. Incorporating networking, Internet of Things, security, data storage, power management and emerging technologies like 5G, edge computing looks beyond the data center to where many people work and where a lot of data is generated and collected.
One major driver in 2020: When the pandemic forced millions of employees to work from home, they immediately became part of the edge and solution providers had to quickly pivot to support them with laptops, collaboration applications and security tools.
Throughout the year edge computing proved to be a driver of developments within the IT industry – and especially within the channel where edge computing created new target markets and service opportunities for solution providers. Steven De Maayer, chief services officer at Carousel Industries, told CRN about how the solution provider was responding to increased demand for edge computing solutions to ensure client employees were connected and secured.
The rapid growth in demand for edge computing technology drove developments among IT vendors. Aruba, coming off its $925 million acquisition of Silver Peak, upped the ante in its secure intelligent edge battle with rivals Cisco Systems and Palo Alto Networks by integrating Silver Peak’s SD-WAN technology with its AI-based ClearPass security platform.
6. The Resurgence Of AMD
At the Consumer Electronics Show in January chipmaker AMD launched a number of impressive new products including the 64-core Ryzen Threadripper 3990X desktop and the Ryzen 8000 Series of CPUs – the latter the company’s first 7-nanometer processors.
That set the pace for 2020 for the resurgent chipmaker, continuing the momentum it built up in 2019 as it challenges Intel’s long-time dominance of the processor market.
AMD launched new Ryzen Pro 4000 laptop CPUs in May to compete with Intel’s vPro processors and has moved aggressively into the integrated graphics arena with its new Ryzen 4000 G-Series and Pro Series APUs for desktop PCs. In October AMD unveiled its next-generation, 7-nanometer, Zen 3 architecture and the first product line it powers, the Ryzen 5000 desktop processors.
But AMD’s 2020 moves went beyond impressive new product introductions. In October the chipmaker struck a deal to buy programmable chip developer Xilinx for $35 billion, an acquisition that strengthens AMD’s competitive position in high-performance computing systems and, according to CEO Lisa Su (pictured), position AMD as a stronger strategic force for next-generation data centers.
AMD is already making gains on rival Intel in some areas, such as gaining ground on the list of the World’s top 500 supercomputers.
Intel has been fighting back with a number of ground-breaking product introductions of its own, including expanding its processor lineup for high-end desktop and laptop systems and commercial PCs. The company’s new Tiger Lake processors, for example, are designed for ultra-thin laptops while upcoming 11th-generation Core S-Series processors will provide a double-digit performance improvement in instructions per clock. And new Xeon Ice Lake server CPUs promise new capabilities such as advanced security features.
But Intel suffered setbacks in 2020. During the company’s second-quarter earnings call July 23 CEO Bob Swan acknowledged that its 7-nanometer products had been delayed by six months because of slower-than-expected progress with the company’s next-generation manufacturing process – meaning the first 7nm products won’t arrive until late 2022 or early 2023. And availability of the Ice Lake server CPUs has slipped to early 2021.
On the personnel side Jim Keller, Intel’s top chip design executive, abruptly resigned on June 11 for personal reasons. And on July 27 Intel said Chief Engineering Officer Venkata Murthy Renduchintala, whose responsibilities included 7nm and manufacturing operations, was leaving the company.
What’s happening in the US is abhorrent. It’s far overdue for all of us to take action to eradicate systemic racism, xenophobia, inequality & all forms of bigotry in America. How we respond will be an important moment in our nation’s history. @Cisco will lead. #blacklivesmatter— Chuck Robbins (@ChuckRobbins) May 30, 2020
5. IT Industry Leaders Decry Racism And Inequality, Donate To Social Justice Causes
CEOs of some of the nation’s biggest IT vendors and solution providers spoke out against racism and social injustice in the wake of the death of George Floyd, a Black American who died May 25 after a Minneapolis police officer pinned him to the ground with his knee on Floyd’s neck for nearly nine minutes. The incident led to large-scale protests around the country and calls for racial justice and police reforms.
Cisco Systems, which postponed its Cisco Live event the first week of June amid the outcry over Floyd’s death, pledged to donate $5 million to several organizations focused on social justice causes including the Equal Justice Initiative, the Legal Defense Fund and Black Lives Matter.
“It’s far overdue for all of us to take action to eradicate systemic racism, xenophobia, inequality & all forms of bigotry in America. How we respond will be an important moment in our nation’s history,” Cisco CEO Chuck Robbins said in a tweet.
Intel pledged to donate $1 million to anti-racism and social justice groups. “While racism can look very different around the world, one thing that does not look different is that racism of any kind will not be tolerated here at Intel or in our communities,” CEO Bob Swan said in a memo to employees that was published on the company’s website.
“Everyone should have the right to breathe freely,” said Presidio CEO Bob Cagnazzi in a Twitter post. “Everyone should have the right to freely breathe with the same privileges others enjoy. Racism in any form should not be tolerated.” In an interview with CRN, Cagnazzi said the channel powerhouse is committed to taking substantive actions to help stem the tide of systemic racism.
“George Floyd should not be dead,” said Hewlett Packard Enterprise CEO Antonio Neri in a message sent to HPE’s 61,600 employees in which he decried the “systemic oppression and racism that still exist in our society.”
“The murder of George Floyd is an atrocity,” wrote Dell Technologies CEO Michael Dell in a letter to all Dell employees. “I‘ve always believed diversity is power. It’s how we win and win the right way. We can lead by example into our inclusive culture. We can lead by example and surround each other in love and support when we need it most.“
Adding their voices to the calls for change were IBM CEO Arvind Krishna (“We are committed to fighting discrimination in all forms”), Nutanix CEO Dheeraj Pandey (“We see you and we support you”), NetApp CEO George Kurian, AWS CEO Andy Jassy, Pure Storage CEO Charles Giancarlo, and Apple CEO Tim Cook.
4. Everything-as-a-Service Continues To Gain Momentum
While “Everything-as-a-Service” has been gaining traction the last couple of years, the concept of providing IT on a consumption or pay-as-you-go basis gained significant momentum in 2020 as major vendors like Hewlett Packard Enterprise and Dell Technologies took their Everything-as-a-Service initiatives to the next level and other companies across the IT industry either launched or expanded their own “Everything-as-a-Service” offerings.
Perhaps the biggest news on the “Everything-as-a-Service” front in 2020 was Dell Technologies’ launch of its Apex project as-a-service strategy that will drive the way Dell develops products, sells solutions to customers and enables channel partners to drive recurring revenue. The effort, unveiled in September, applies across the company’s massive portfolio of PCs, servers, storage, networking, end-user computing and hyper-converged infrastructure systems. First to be offered was the new Dell Technologies Storage as a Service.
In August Cisco Systems CEO Chuck Robbins said the COVID-19 pandemic had spurred the company to re-examine its entire product portfolio and accelerate its research and development efforts to transition the majority of its portfolio to an as-a-service consumption model. Robbins said the effort builds on work Cisco has already done to shift its focus to software, services and subscriptions – 78 percent of its software revenue is now generated through subscriptions.
HPE, which has been a pioneer in everything-as-a-service with its GreenLake pay-per-use model, maintained its as-a-service momentum. CEO Antonio Neri took steps to accelerate the vendor’s edge-to-cloud everything-as-a-service sales offensive in the wake of the economic disruption caused by the global COVID-19 pandemic.
In May HPE debuted GreenLake Central, a self-service hybrid cloud portal that partners and customers use to manage GreenLake services. One month later the company launched a standardized set of “building block” GreenLake services, such as storage, private cloud and containers. In September HPE unveiled plans to make GreenLake services available through distributor cloud marketplaces. And in November the company promised robust compensation and field sales investments for GreenLake tied to its $1 billion Partner Ready program.
NetApp and Cisco brought their FlexPod converged infrastructure technology to the channel in a new as-a-service offering. NetApp, as part of a major revamp of its partner program, introduced a new “X-as-a-Service” specialization for partners where “X” refers to infrastructure, storage and other IT that can be delivered as a service.
Lenovo’s Intelligent Devices Group in North America said it is developing a new Device-as-a-Service offering tailored for small and mid-size businesses. And Eaton is talking about providing partners with the ability to deliver power management-as-a-service using the company’s power management software.
3. State-Sponsored Cyberattack Poses Grave Threat To Government IT, Businesses
As 2020 came to a close, the IT industry and its federal government agency customers were rocked by one of the most extensive and most damaging cyberattacks ever.
The cyberattack, believed to have been carried out by state-sponsored hackers – likely the Russian intelligence service – relied on malicious code injected into SolarWinds’ Orion network monitoring platform between March and June of this year. That was then used as the vehicle to compromise other IT vendors, including FireEye and Microsoft, and gain access to IT systems in a growing number of U.S. federal government agencies including Defense, State, Homeland Security, Treasury and Commerce.
The U.S. government warned that the attack posed “a grave risk” to government and business and the U.S. Cybersecurity and Infrastructure Security Agency (CISA) ordered all federal civilian agencies to power down SolarWinds Orion until all hacker-controlled accounts and identified persistence mechanisms were removed.
Efforts to mitigate the damage were launched. SolarWinds MSP told its 15,000 solution provider customers – who use the SolarWinds products to run their businesses – that it was revoking the digital certificates for its MSP tools, forcing customers to “digitally re-sign” into its services. The company also deployed CrowdStrike’s endpoint protection system to secure its internal systems in the wake of the attack.
One knowledgeable analyst said the hack is likely the worst cyberattack since the 2014 Sony breach, given the attack’s scale, scope and sophistication. The investigation into the attack and the resulting fallout are sure to be big stories as 2020 turns into 2021.
2. Ransomware Attacks Escalate With Systems Integrators And MSPs Among The Victims
A number of ransomware incidents in 2019 proved to be a warning of what was to come in 2020 – a steady drumbeat of ransomware attacks against businesses, hospitals, government agencies and other organizations. IT companies, MSPs and solution providers sometimes found themselves on the front lines of defense against these attacks – and sometimes they were the targets.
One of the biggest ransomware attacks this year came in February against facilities management firm ISS World, forcing the company to switch off its networks and leaving hundreds of thousands of employees without access to their IT systems or email. It took more than a month for ISS World to regain control of most of its IT infrastructure – with recovery and mitigation costs reaching $75 million or more – although it took months for the company to completely restore and rebuild its IT systems.
Other targets included county and local governments like Tillamook County, Ore., and La Salle County, Ill.; businesses like Communications and Power Industries; law firms such as Grubman Shire Meiselas & Sacks; and a sprawling attack against a number of hospitals in the fall.
IT industry companies were victims of ransomware attacks in 2020. In November Taiwanese electronics manufacturer Foxconn suffered a ransomware attack at its North American facility in Ciudad Juarex, Mexico, that resulted in stolen and encrypted files and damaged servers. A ransomware attack against data center colocation service provider Equinix in September demanded a $4.5 million payment.
Closest to home for the channel were a series of ransomware attacks against solution providers, systems integrators and managed service providers that either utilized MSP management tools as the attack vector or utilized the advanced networks operated by solution providers to maximize the impact of their attacks.
In April IT services and global systems integrator Cognizant disclosed that its network was infected with Maze ransomware that encrypted servers and disrupted some of the company’s work-from-home capabilities and caused service disruptions for some clients. In June solution provider Conduent was also hit by a Maze ransomware attack that resulted in stolen documents. And in September Tyler Technologies, one of the biggest IT solution providers to state and local governments, was hit with a ransomware attack that crippled its internal network, phone and email systems and ultimately cost the company $4 million in lost sales.
Continuing a trend that became prominent in 2019, ransomware attacks targeted MSPs, including such big names as ConnectWise and IT By Design, and their remote monitoring and management tools as a way to attack the IT systems of MSP clients.
In early 2020 the Albany (N.Y.) International Airport paid a five-figure ransom to restore data after getting hit with Sodinokibi ransomware during the holidays through its managed service provider, Schenectady-based LogicalNet (whose own management services network had been breached). And in July multiple DXC Technology customers had their IT systems taken down following a ransomware attack against a DXC subsidiary that sells insurance industry applications.
MSPs have taken steps to neutralize the threat. In November, ConnectWise, which provides software and services used by many MSPs, said it had acquired two cybersecurity companies, StratZen and Perch Security, in a bid to shield its MSP partners from cybercriminals.
1. COVID-19 Pandemic: Economic Downturn And Work From Home Leads To Strategic Pivots For IT Vendors, Solution Providers
The first IT industry-related news stories about the coronavirus focused on the outbreak in China, including Google suspending operations at its offices in China, Amazon restricting business travel to the country and Apple facing iPhone production constraints as manufacturing plants in China shut down.
By mid-February it became clear the impact of the COVID-19 outbreak, although not declared a pandemic until March 11, would reach far beyond China’s borders. The first casualty was the Mobile World Congress 2020 conference in Barcelona, scheduled to begin Feb. 24, which was cancelled on Feb. 12 after a number of major participants like Cisco Systems, Intel, and Sprint dropped out.
From that point just about every IT industry event and conference was canceled and replaced with an online virtual event, including a number of major vendor customer, developer and partner conferences such as HP Inc.’s Reinvent, Google Cloud Next, Dell Technologies World 2020, Amazon’s AWS re:Invent 2020 and Apple’s World Wide Developers Conference.
To halt the spread of the virus many countries around the world – and states within the U.S. – began shutting down their economies and issuing stay-at-home orders. That led to an unprecedented number of businesses ordering their employees to work from home – a change that has had far-reaching consequences for solution providers that have had to quickly pivot and support clients’ employee needs for laptops and other work-from-home equipment such as collaboration tools, video conferencing services and more.
A number of leading IT vendors including Cisco Systems, Hewlett Packard Enterprise, IBM and SAP, took steps to help their channel partners absorb the economic blow from the pandemic by suspending sales targets, providing program level protection, extending deadlines for certification and specialization renewals, and offering generous financing terms, flexibility in using market development funds, and free or subsidized training opportunities.
Some IT vendors have benefited from the increased demand for their products and services generated by the pandemic including laptop computer manufacturers, suppliers of collaboration tools, cloud platform vendors like Microsoft Azure and – most certainly – Zoom Video Conferencing. Cisco Systems reported that user volume for its Webex collaboration platform tripled from March to June.
But others have taken financial hits because of the pandemic and economic slowdown. Application giant SAP saw the value of its stock plunge – wiping out more than $33 billion in market capitalization – after the company lowered its earnings forecast for the year.
As 2020 drew to a close and the first vaccines against the coronavirus were being administered, questions remain about both the short-term and long-term impact of the pandemic. No one can say how quickly the economy will rebound in 2021 and what the IT market will look like in the new year.
Beyond the more immediate impact, the pandemic could have long-range effects on IT and the IT industry. A report from IPED, the research arm of The Channel Company, noted that solution providers are re-focusing their practices to meet surging demand for cloud and managed services, consumption-based IT and subscription services. And a report from the McKinsey & Company consulting firm, based on a survey of 899 C-level executives and senior business managers across industries and geographies, concluded that the pandemic has accelerated the pace of digital transformation and the adoption of cloud computing.