Channel programs News
The Top 10 News Stories Of 2020 (So Far)
The impact of the COVID-19 pandemic, a steep economic downturn, the IT industry’s response to the social justice movement, an abandoned corporate takeover attempt, a possible spin-off, new technologies and old technology rivalries. It has been a very tumultuous 2020 – so far.
See the latest entry: The Biggest News Stories of 2022
The year 2020 (so far) 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, acquisitions (both successful and failed) and spin-offs, security breaches, and the rapid evolution of IT itself.
Here’s our look at the top 10 news stories of 2020 (so far).
10. The IT Industry Accelerates The Rollout Of 5G Wireless Networks And Products
Since the 5G wireless standard won final approval in 2018, the industry’s largest communications carriers have been racing to build out their nationwide 5G networks. 5G promises dramatically faster speeds, instantaneous communication and the ability to connect everything from autonomous vehicles to Internet of Things devices to the network.
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 across more than 35 cities. 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 has even brought its 5G network to Alaska.
Verizon, meanwhile, has pursued a strategy to use only millimeter wave or high-band spectrum technology, which it developed before the 5G standard was set, and that has reportedly slowed download speeds on its 5G network in Manhattan.
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.
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, for example, 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 that the company said will help pave the way for the proliferation of 5G in robotics and intelligent systems. And Apple is developing 5G iPhones – but they aren’t likely to hit the market until 2021.
5G hasn’t been without controversy, however. The U.S. government has been fighting to keep network equipment manufactured by the 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.
9. Pentagon JEDI Controversy Continues, “Re-Announcement” On Massive Cloud Services Contract Due Shortly
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 into 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.
Almost immediately Amazon 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 120-day review period.
The Defense Department’s Inspector General, meanwhile, concluded a review that found no evidence that Trump’s expressions of animosity toward Amazon influenced the decision to award JEDI to Microsoft.
Meanwhile, the war of words between Microsoft and AWS has continued. 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.” The Microsoft executive said JEDI would provide the Pentagon with “the latest advancements in enterprise cloud…But only if Amazon gets out of the way.”
Amazon quickly responded with its own blog post saying it would do no such thing.
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 – by the end of August. But few believe that announcement, whatever it may be, will be the end of the long-running issue.
8. Heated Intel-AMD Competition Continues Into 2020
At the Consumer Electronics Show in January chipmaker rivals Intel and AMD began the new year where they left off in 2019 – each claiming the mantel of innovation leader in the semiconductor industry.
AMD used the CES show in Las Vegas to launch 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. Intel, meanwhile, showed off its first discrete GPU product, code named DG1, based on the same Xe GPU architecture that powers upcoming mobile processors and Intel’s first GPU for servers.
The moves were the latest shots in what’s become an increasingly heated battle between the long-time semiconductor industry leader and a resurgent AMD that has been pushing the envelope of microprocessor technology and began introducing 7-nanometer Ryzen desktop and Epyc server processors last year.
This year 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.
Intel has been fighting back with a number of ground-breaking product introductions, including expanding its processor lineup for high-end desktop and laptop systems and commercial PCs with new 10th-generation Core H-Series, Core S-Series and vPro chips. In June Intel debuted a new Intel Core processor with Intel Hybrid Technology designed for foldable and dual-screen PCs and other ultra-light form factors. Also in June Intel introduced new third-generation Xeon Scalable data center processors.
All the while, demand for Intel’s PC and data center products has remained strong with the move by many employees to work from home, spurred by the coronavirus pandemic, driving sales of notebook and laptop PCs.
But Intel has suffered setbacks as 2020 has progressed. Jim Keller, the company’s top chip design executive, abruptly resigned on June 11 for personal reasons. During Intel’s second-quarter earnings call July 23 CEO Bob Swan acknowledged that its 7-nanometer products have 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 on July 27 Intel said Chief Engineering Officer Venkata Murthy Renduchintala, whose responsibilities included 7nm and manufacturing operations, was leaving the company.
7. IBM, AT&T And Dell Technologies Among The Companies Making CEO, Channel Management Changes
The year 2020, so far, 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.
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.
This year has also seen some 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, takes over as Dell Channel Chief Sept. 7. Paul Shaffer, Dell Technologies’ longtime channel sales and marketing executive, also left the company in August.
Fast on the heels of Mullen’s announcement, 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.
So far 2020 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 (so far) include the appointment of former BMC Software and Polycom CEO Peter Leav to be CEO at security vendor McAfee. 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.
6. 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 posturing and financial maneuvering continued through the end of 2019 and into 2020 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.
Xerox increased its offer to $24 per share ($34.9 billion) on Feb. 10 and commenced its tender offer on March 2.
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.
5. 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.
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.)
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. 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.
On July 15 Dell, in a filing with the U.S. Securities and Exchange Commission and in a 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.”
For Dell, the move would provide it with more cash and improve the company’s credit rating to investment grade, create more financial flexibility, lower debt service costs and likely attract new investors.
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.
4. Everything-as-a-Service Continues To Gain Momentum
In 2019 a number of leading IT vendors, including Hewlett Packard Enterprise and Dell Technologies, embraced the concept of “everything-as-a-service” – providing IT on a pay-as-you-go basis. In 2020 the move to everything-as-a-service has accelerated with those early adopters expanding their everything-as-a-service programs and product portfolios even as more vendors jump on the bandwagon.
HPE has been a pioneer in everything-as-a-service with its GreenLake pay-per-use model. This year 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 the company debuted GreenLake Central, a self-service hybrid cloud portal that partners and customers use to manage GreenLake services. And in June the company launched a standardized set of “building block” GreenLake services, such as storage, private cloud and containers.
Cisco Systems is accelerating its research and development with an eye toward shifting the majority of its product portfolio to an as-a-service consumption model. That builds on the transformations the company has already undergone as it focuses on software, services and subscriptions – 78 percent of its software revenue is now generated through subscriptions.
NetApp and Cisco are bringing their FlexPod converged infrastructure technology to the channel in a new as-a-service offering. In July 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. Ransomware Attacks Escalate Against Solution Providers And MSPs
A series of ransomware attacks in 2019 highlighted a disturbing trend: Cyber attackers were increasingly targeting managed service providers (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.
Ransomware attacks – especially the use of MSPs as an attack vector – continue in 2020 as one of the biggest issues in the channel. Just last month multiple DXC Technology customers had their IT systems taken down following a ransomware attack against a DXC subsidiary that sells insurance industry applications.
“This is absolutely the No. 1 issue facing the channel,” said David Powell, a longtime MSP who recently joined MSP security provider Perch Security from MSP superstar Corsica Technologies, following the attack against DXC. “MSPs are not taking this security issue seriously enough and as a result they are leaving their customers open to the downside risk of a breach.”
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).
Some big names in the IT industry have been victims of Maze ransomware attacks in 2020. In April IT services and systems integrator giant 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. And In June Xerox – which plans to begin providing IT services to customer this year – was hit by Maze ransomware operators who claimed to have stolen more than 100 Gb of files.
The biggest ransomware attack 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 between $75 million to $112.4 million – although it will be the end of the year before the company finishes restoring and rebuilding its IT systems.
There have been successes in the fight. In February CRN reported a case where ConnectWise, Huntress Labs and Datto teamed up and worked with the FBI to thwart a hacker – a former MSP systems engineer – who was selling an MSP’s access credentials.
2. 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.
1. COVID-19 Pandemic Triggers Recession And IT Sales Slowdowns, Forces Millions To Work From Home
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.
The pandemic’s effects even had political ramifications for some. Google found itself ensnared in a controversy in March when President Donald Trump said Google had made “tremendous progress” in developing a web site to facilitate COVID-19 testing and the site would be “very quickly done.” Hours later Verily Life Sciences, a subsidiary of Google parent Alphabet, said the website was in the early stages of development and would initially be rolled out only in the San Francisco Bay area.
It’s too soon to say how much of a long-term impact the pandemic will have on the U.S. economy (the U.S. officially entered a recession in February) and on the IT industry – and how long the downturn will last. While some IT vendors have issued warnings about the financial impact of the pandemic, the industry has weathered the downturn better than other segments of the economy such as the airline and hospitality industries.
All indications are the COVID-19 epidemic will continue to be a major news story through 2020 and into 2021. On July 28 the Consumer Technology Association, citing concerns over the coronavirus pandemic, announced that it was cancelling the physical portion of the massive Consumer Electronics Show, scheduled for early January 2021 in Las Vegas, and would become an all-digital event instead.