The 10 Most Controversial Companies Of 2016
Controversy In 2016
There are some vendors that seem always to be embroiled in controversy, whether it be patent infringement cases, plummeting stocks, slamming competitors or another highly-publicized, feather-ruffling product launch.
It's tough to separate controversy from competitiveness, though.
If you're pulling your punches and not going full throttle, you don't have to worry about occasionally upsetting investors, angering your rivals or setting off a marathon of hand-wringing among your channel partners. But it's controversy in the tech industry coupled with a competitive spirit that makes certain companies so interesting to follow.
To celebrate these champions of conflict, CRN has scoured the news headlines and identified 10 companies that have spent the year under fire – sometimes because they fired first. Here, we present them for your enjoyment.
Apple
There's so much going on at a company worth more than $600 billion that it's tough to narrow it down. Apple's most controversial product launch this year was the iPhone 7, which angered many because it lacked the traditional headphone jack and raised complaints that the new phone wasn't innovative enough (investors are anxiously waiting iPhone 7 sales figures expected to be released in January, while CEO Tim Cook in October said the company is "thrilled with the customer response" to the iPhone 7 and other products.)
President-elect Donald Trump repeatedly sparred with Apple publicly throughout the year on a number of issues and called for a boycott of its products in February from the campaign trail. Among Trump's complaints about Apple: questioning the company's decision not to weaken its iPhone encryption for the benefit of law enforcement, raking Apple over the coals for having so much of its manufacturing in China, and holding it up as a poster child for his plans to repatriate corporate profits to the U.S.
Amid all of this, Apple experienced its first year-over-year decline in annual sales in 15 years, reporting revenue of $215.64 billion for fiscal 2016, ended Sept. 24, down 7.7 percent from fiscal 2015.
Arista Networks
Arista spent a lot of time in the spotlight through 2016 as it was embroiled in patent infringement battles with rival Cisco on multiple fronts. In June, Cisco won three of five patent infringement suits, and the International Trade Commission recommended a ban on Arista product imports containing the infringing technology. Arista's shares then hit an all-time high in November (and kept climbing from there) after the courts lifted that import ban. Arista followed that with a moral victory on Dec. 14 when a jury decided the networking company owed no damages to Cisco in a separate patent infringement case Cisco brought against it in a San Jose court.
Even without Cisco's help, Arista has given channel partners pause this year as the company has reportedly stopped putting effort into its channel programs and partners have told CRN that Arista's channel program is just a piece of paper. "There's no marketing team in place to support the channel," one solution provider executive told CRN.
AT&T
AT&T's move to acquire entertainment giant Time Warner turned a lot of heads when it was announced in October as industry pundits pondered the implications of the wireless carrier's plan to scoop up the parent company of media properties such as CNN and HBO. It also attracted the ire of President-Elect Donald Trump. During the campaign leading up to the presidential election, Trump said the impending deal puts "too much concentration of power in the hands of too few," and vowed that his administration would not approve it. Only time will tell whether Trump follows through on that pledge after he takes office in January.
Oracle
Oracle through the first half of 2016 suffered a string of defeats as it took on Google and Hewlett Packard Enterprise in separate lawsuits relating to Google's use of Java and a breach of contract case, respectively.
Outside the courtroom, the company made waves by slamming competitors, including Amazon Web Services and Workday. But the company also embarked on a cloud-related shopping spree, buying Opower, LogFire and Palerra. But the biggest plum was its November purchase of cloud business software player NetSuite in a deal valued at $9.3 billion. Oracle Executive Chairman Larry Ellison and his family owned more than 40 percent of NetSuite, so that purchase became a bit dramatic when other shareholders balked at the offering price. In November, Oracle said it would buy Internet performance management company Dyn for $600 million. The purchase is positioned as complementary to Oracle's cloud business. Dyn's DNS database and other offerings power more than 3,500 customer sites, including Netflix, Twitter, Pfizer and CNBC. About a month earlier, Dyn dominated headlines because it suffered a DDoS attack that led to outages at more than 1,200 customer websites, including many of those big-name clients.
While pursuing its mission to make the world more open and connected, the social networking giant has stepped on some toes as its moves into other industries, like enterprise collaboration and data center infrastructure. In competition with Microsoft, Slack and others, Facebook debuted its first partner program this year around its enterprise-focused collaboration product called Workplace. The company on-boarded about a dozen channel partners into its new Facebook Workplace Partner Program to sell the offering. Facebook has also designed a new 100-gigabit Ethernet (GbE) Wedge 100 switch to speed up connections inside of and in between data centers. Edgecore Networks, owned by Taiwan-based Accton Technology, produces the Wedge 100 switch and businesses can buy it through Accton, Edgecore and Edgecore's channel partners.
Meanwhile, in its mainstay social media business, Facebook took criticism for unwittingly serving as a distribution platform for "fake news" that some say influenced the presidential election. Since then, the social network said it had eliminated the ability for spammers to pretend to be real news sites by spoofing their domains.
Cisco
Cisco has made controversial moves all year as it tries to get comfortable again in its own skin under CEO Chuck Robbins, who celebrated his one-year anniversary in the role in July. The company is moving quickly to recast itself as a software- and cloud-focused company under the helm of its new leader. Cisco endured some high-profile executive departures, and also initiated cost-cutting efforts that resulted in a large round of layoffs.
After months of speculation on how and when Cisco would come out with a hyper-converged product of its own, it launched HyperFlex in March by teaming with SpringPath, a company in which it is also an investor. The product introduction raised eyebrows because SpringPath is a relative unknown in the space compared to rivals SimpliVity and Nutanix, and because Cisco didn't outright acquire SpringPath, leading some to question how much faith Cisco has in the technology.
The company also sparred with upstart rival Arista via multiple court cases.
Meanwhile, on the cloud front, one Cisco president had tough words for Amazon Web Services, but as the year came to a close Cisco finally fessed up that Intercloud, Cisco's much ballyhooed public cloud initiative, is dead.
Ciber
Global IT consulting company Ciber gave investors headaches in 2016. The company's stock, which hasn't been at or above $5 a share since 2014, is very close to being de-listed by the NYSE. The company has missed earnings expectations for three straight quarters, and its shares have lost 78 percent of their value in the last 52 weeks. The company has been cutting staff and attempting to reduce its costs. It sold its Dutch subsidiary, Ciber Netherlands, to ManpowerGroup for $25 million to refocus its efforts. All the while, Ciber is considering all kinds of strategic options – mergers, acquisitions, joint ventures, financing arrangements – to keep the 22-year old business going and to return it to profitability. What's not helping is that the solution provider issued bonus payments totaling $860,000 to its CEO and CFO without board authorization. The executives agreed to pay the money back, and the board is reviewing how such "control deficiencies" happened, according to SEC filings.
Symantec
In August, Symantec closed its $4.65 billion acquisition of Blue Coat Systems, became the world's largest pure-play security vendor and told investors that the company is a "substantial element of the economics in the channel." Just a few months later, Blue Coat's management team had moved into nearly every top post in Symantec's executive ranks. This followed a total overhaul of Symantec's channel organization following several executive departures before the Symantec-Blue Coat combination. The crazy pace continued in November when Symantec announced its second blockbuster deal of the year when it unveiled plans to acquire LifeLock for $2.3 billion. The channel implications are still up in the air, but LifeLock's ID protection technology and threat database could open a new channel of partners for Symantec for employee benefit program brokers. What we do know for sure is that Symantec is changing at a pace that rivals only the white-hot security business itself – and we can't look away for fear we'd miss what happens next.
Yahoo
Yahoo has been one of the longest-burning dumpster fires in the internet age. CRN wrote about Yahoo's decline in 2008, but there's so much more to add. This year, Yahoo's CEO Marissa Mayer took some heat for banning telecommuting and saying, in a documentary, that she was not a feminist. Meanwhile, two former male Yahoo employees filed separate lawsuits alleging gender discrimination after they were fired.
But those issues faded into the background of Yahoo's failed corporate turnaround, layoffs and massive security breaches, which may impact the company's fate as a takeover target. Yahoo finally found a buyer in Verizon, who agreed to acquire Yahoo for $4.83 billion, a far cry from the more than $40 billion it turned down from Microsoft some years ago. After the Verizon deal had been disclosed, Yahoo revealed it suffered the two most widespread and serious data breaches in history – one affecting more than 500 million user accounts and the next one, a separate breach, affecting more than 1 billion user accounts. Now the Verizon deal is reportedly in jeopardy.
Microsoft
Microsoft continued to take the heat in 2016 over its aggressive efforts to upgrade customers to Windows 10. While serving full-screen pop-up windows to users reminding them of the free upgrade offer is annoying, some of its other tactics are being labeled by partners as downright "sneaky."
In June, it was reported that Microsoft had changed the functionality of a Red X at the bottom of the Windows 10 updates box, prompting automatic downloads for customers who did not click on it.
Anger over Windows 10 upgrades wasn't limited to just its customers. In November, Kaspersky Lab took aim at Microsoft alleging that it's edging out competitors in ways that violate antitrust laws with its latest Windows 10 update.
Kaspersky claimed that it was only given one week to make its software compatible with the latest Windows 10 security updates. The compatibility process included automatic deactivation of other anti-virus software on a system and replacing it with Windows Defender antivirus limiting the number of antivirus companies on a PC to one (other than Defender).
Kaspersky also alleged Microsoft was urging customers to replace compatible anti-virus alternatives with Windows Defender.