Channel Conflict, Controversy: SolarWinds Hack, Racism, Layoffs, Zoom-RingCentral
Grab some popcorn and relive the drama.
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News broke in mid-December that SolarWinds was targeted in a giant hack reportedly carried out by Russian hackers. The espionage campaign has heavily impacted the federal government and cybersecurity industry.
Last week, we learned the group that carried out the SolarWinds hack were already inside the company’s environment in January 2019. That’s much earlier than previously reported.
During an RSA Conference keynote, Sudhakar Ramakrishna, SolarWinds’ president and CEO, said the attackers’ trade craft was “extremely well done and extremely sophisticated.” And they did “everything possible to hide in plain sight.”
The attack rocked the cybersecurity industry and even prompted President Biden to issue sanctions against Russia.
SolarWinds began notifying its customers about the breach in mid-December 2020. Early on, the company reported up to 18,000 customers could have been vulnerable to the malicious code used by the attackers; it now says fewer than 100 SolarWinds customers were hacked.
The company is still helping its customers recover from the attack.
One week after a disparaging tweet about Chinese researchers, Alteryx‘s new chief revenue officer found himself out of a job.
The tweet in early February on Dean Darwin’s Twitter account, which many described as racist, called on the government to boot every Chinese researcher on visa out of the United States.
On Jan. 4, Alteryx announced the hiring of Darwin as CRO to lead the company’s go-to-market plan. That included worldwide sales, channels and all industry-specific go-to-market initiatives. In addition, he would drive Alteryx‘s next phase of growth, leveraging the company’s strategic alliance partners.
Darwin posted the following tweet on Feb. 11:
“When is the US going to wake up and kick every Chinese researcher here on a visa out of the US and close this as an access to them?”
Someone identifying as an Alteryx customer and former employee, with the Twitter handle @meeshchoe, retweeted Darwin’s tweet, and said, “what is the stance of Alteryx regarding this post? How does he feel about other Asians at Alteryx?”
Others also criticized Darwin and Alteryx on Twitter.
On Feb. 18, Alteryx took action. And in its Feb. 19 filing with the Securities and Exchange Commission, the company said Darwin had resigned.
“The resignation follows the company becoming aware of a social media post from Mr. Darwin that was not consistent with the company’s values,” it said.
Other members of Alteryx’s organization have took over Darwin’s responsibilities, it said.
This month’s Colonial Pipeline ransomware attack temporarily shut down a major U.S. fuel pipeline, prompting panic over the security of the nation’s critical infrastructure.
Russian cybercrime group Darkside carried out the attack. In response, the U.S. Department of Transportation issued an emergency declaration to increase alternative transportation routes for oil and gas.
Colonial Pipeline is the largest refined products pipeline in the United States. After the attack, it took certain systems offline to contain the threat. This temporarily halted all pipeline operations and affected some of its IT systems.
The attack pushed gas prices higher and disrupted supply in the eastern United States. According to Bloomberg, Colonial Pipeline paid nearly $5 million in ransom to Darkside. The ransomware group reported has since disbanded.
In the aftermath, Biden signed an executive order to strengthen U.S. cybersecurity defenses.
Longtime partners Zoom and RingCentral found themselves in a court battle. In March, a federal court sided with Zoom.
Zoom filed its lawsuit in the U.S. District Court for the Northern District of California. It alleged federal unfair competition and false designation of origin, breach of contract, and violation of the California Business and Professionals Code. It also sought an injunction barring RingCentral from using its trademark, and for RingCentral to turn over all profits and gains from the use of its trademarks.
In March, the court dissolved a temporary restraining order against Zoom and denied RingCentral’s motion for preliminary injunction.
The sealed ruling also referred action for a mandatory settlement conference.
Zoom has been trying to terminate its agreement with RingCentral since last summer. It provided video conferencing services for RingCentral to resell under its own RingCentral Meetings brand. However, RingCentral rolled out its own video conferencing service, RingCentral Video, last April.
RingCentral continued to market and sell Zoom products to new customers. However, RingCentral claims it is in the process of switching these customers to non-Zoom products.
Zoom called RingCentral’s meeting product Inferior.
Last month, Positive Technologies denied the U.S. Treasury Department’s “groundless accusations” that its conferences provide venues for recruiting Russian spies.
Positive Technologies, along with five other Russian research centers and companies, aided the country’s intelligence services in honing their cyber capabilities for operations such as the SolarWinds breach, the Wall Street Journal reported.
The Treasury Department imposed sanctions as part of a broader executive order by Biden on Russia. It authorized financial penalties and diplomatic expulsions.
Positive Technologies issued a statement in response to the department’s actions:
“In the almost 20 years we have been operating, there has been no evidence of the results of Positive Technologies’ research being used in violation of the principles of business transparency and the ethical exchange of information with [the] professional information security community,” it said.
In March, news broke that Chinese hackers infiltrated hundreds of thousands of on-premises Microsoft Exchange Server instances throughout the world.
The attack allowed access to email accounts and installation of malware to increase hackers’ dwell time inside a system.
Microsoft, which identified the attackers as Hafnium, urged organizations running the email server to install newly released patches.
Hafnium is a nation-state actor, warned Tom Burt, Microsoft’s corporate vice president for customer security and trust. The group has penetrated more than 30,000 organizations in the United States.
John Hammond, senior security researcher at Huntress, last month said the threat is still very much real.
“Servers that are not patched are still being actively exploited,” he said. “As public exploits are now available, any ill-intended actor can spray-and-pray across the internet looking for public-facing and vulnerable Exchange servers.”
Organizations may now see this as a wake-up call to move to the cloud, but this is a painstakingly slow process that requires months of planning, Hammond said. There is no telling why some servers remain unpatched. But truthfully, there is no excuse.
A bankruptcy judge last month ordered Charter Communications to pay Windstream more than $19 million in connection with a deceptive mailer that it sent out addressing Windstream’s chapter 11 bankruptcy.
Windstream told the court it lost nearly $20 million and 1,400 customers due to Charter’s mailer.
Windstream asked the court for a verdict requiring Charter to cover its losses, attorneys’ fees and litigation costs. The court sided with the Arkansas-based business communications giant.
The summary judgment said Charter should be sanctioned because of its “misleading” ad campaign’s willful violation of the automatic stay under the bankruptcy code. The judge said Charter also violated the automatic stay by disconnecting service to a number of Windstream customers.
In addition, the judge said Charter “intentionally and wrongfully” interfered with Windstream’s customer contracts and good will.
After a year and seven months, Windstream exited bankruptcy last September with two-thirds of its debt erased and $2 billion in new capital.
In January, VMware sued Nutanix CEO Rajiv Ramaswami, it’s former chief operating officer. The suit alleges material and ongoing breaches of his legal and contractual duties and obligations to VMware.
VMware said Ramaswami “failed to honor his fiduciary and contractual obligations to VMware.”
“For at least two months before resigning from the company, at the same time he was working with senior leadership to shape VMware’s key strategic vision and direction, Mr. Ramaswami also was secretly meeting with at least the CEO, CFO and apparently the entire board of directors of Nutanix to become Nutanix’s CEO,” VMware said. “He joined Nutanix as its CEO only two days after leaving VMware.”
Ramaswami demonstrated “poor judgment” and had a “clear and extended period of conflict of interest,” VMware said.
Two legal experts say VMware‘s lawsuit against Ramaswami holds little weight due to California’s rules concerning hiring among competitors.
VMware also lost its CEO this year. Pat Gelsinger vacated the post to rejoin Intel as its CEO. He was VMware’s CEO for more than eight years.
VMware this month chose longtime company veteran and co-COO Rangarajan “Raghu” Raghuram to be its new CEO. Co-COO Sanjay Poonen then left the company after it passed him over for the top job.
Earlier this month, news broke that the Pentagon may pull the plug on the Joint Enterprise Defense Initiative (JEDI), the Department of Defense’s project to update its systems to cloud computing.
According to the Wall Street Journal, top federal lawmakers are tired of the legal battle between Amazon Web Services (AWS) and Microsoft. They’re pressuring the DoD to make a move. On April 30, Deputy Defense Secretary Kathleen Hicks said JEDI would undergo a review.
“We’re going to have to assess where we are with regard to the ongoing litigation around JEDI and determine what the best path forward is for the department,” Hicks said, according to the WSJ.
Her comments came after the Pentagon sent a report to Congress. That document said another Amazon court win could significantly impact the timeline for getting JEDI up and running. And DoD’s assessment came before a federal judge last month refused to dismiss Amazon’s claims alleging the Trump administration interfered in JEDI.
Microsoft Azure landed the $10 billion contract in 2019. AWS then convinced a judge to halt any work Microsoft had started on the project.
Cisco, McAfee, Mimecast, VMware, Forcepoint and Shenandoah Telecommunications (Shentel) have all pink-slipped workers in recent months.
Shenandoah Telecommunications (Shentel) is cutting about 340 workers, or 30% of its workforce, as it prepares to sell Shentel Wireless to T-Mobile. T-Mobile is acquiring the Shentel assets for nearly $2 billion in cash.
In the aftermath of its acquisition by Francisco Partners, Forcepoint channel partners learned the company laid off most of its North America channel team. About 10 channel employees have lost their jobs. That includes Mark Nehring. He was Forcepoint’s vice president of North America channel sales for more than two years.
VMware cut more than 100 jobs starting in late March. That included 93 who worked at VMware’s Palo Alto, California, headquarters, and 14 who worked remotely.
Eighty Mimecast employees lost their jobs earlier this year as the company’s growth remains below its pre-pandemic expectations. The layoffs represented 4% of the company’s 2,000-member workforce.
More than 130 McAfee employees were let go in March as the cybersecurity company cut its corporate headquarters workforce. Some worked in McAfee’s headquarters in San Jose, California, and others worked remotely and reside outside of California.
Finally, Cisco laid off 101 workers in San Jose in December as part of a cost-cutting and restructuring effort. Data scientists, software engineers, project managers and technical leaders are among the eliminated positions.
At first, it appeared that an MSP marketing specialist had decided to mark International Women’s Day by mocking transgenders online.
However, it turned out to be a joke gone wrong, an object lesson in what not to do after accidentally offending someone — and an amazing demonstration of grace.
Scott Millar of the U.K.-based IT Rockstars posted in a Facebook community that he was going to mark the day by identifying as a woman. The post, which was accompanied by photo in which he had used FaceApp to look like a female, appeared in the “IT & MSP Business Owners Group,’ a private group of more than 10,000 members.
When other members of the group responded to Millar indicating that they found his post to be inappropriate, his response was, “Guys please respect my wishes to identify the way I want.”
Soon after, a response to Millar’s post came from Nicole Boon, CEO of Phoenix Secure IT, a Minneapolis-based IT security and support provider: “I found your joke about identifying as a women for a day distasteful.” To which Millar responded, “Tomorrow I will be identifying as a potato – please respect my wishes.”
Boon is transgender and told Millar that. She asked for an apology, but there was no response.
According to Millar, he – perhaps unwisely – maintained radio silence because he didn’t want to offend anyone further, since that had not been his intent in the first place. He told Channel Futures that he had been trying to make a self-deprecating joke and was surprised by the response he received.
“I’ve known I was a woman since I was five years old, and I’ve endured the most hateful things since I came out four years ago,” Boon said. “Our right to exist has been challenged in the last year and many states openly discriminate against us. I just want others to think twice before they decide to spread transphobia. It really hurts my fellow transgender people. We are struggling right now for equality and acceptance in society.”
In the aftermath of its emergence from Chapter 11 bankruptcy, Frontier Communications faces a Federal Trade Commission (FTC) lawsuit. It alleges the company misrepresented internet speeds.
The FTC and law enforcement agencies from six states filed the lawsuit in the U.S. District Court for the Central District of California.
The FTC lawsuit alleges Frontier did not provide many consumers with internet service at the speeds it promised them. Moreover, it allegedly charged many of them for more expensive and higher-speed service than was actually provided.
Frontier emerged from bankruptcy last month. It reportedly trimmed some $11 billion in debt and obtained a liquidity of about $1.3 billion.
Frontier disputes the lawsuit’s allegations and said it’s preparing a “vigorous” defense.
In the aftermath of its emergence from Chapter 11 bankruptcy, Frontier Communications faces a Federal Trade Commission (FTC) lawsuit. It alleges the company misrepresented internet speeds.
The FTC and law enforcement agencies from six states filed the lawsuit in the U.S. District Court for the Central District of California.
The FTC lawsuit alleges Frontier did not provide many consumers with internet service at the speeds it promised them. Moreover, it allegedly charged many of them for more expensive and higher-speed service than was actually provided.
Frontier emerged from bankruptcy last month. It reportedly trimmed some $11 billion in debt and obtained a liquidity of about $1.3 billion.
Frontier disputes the lawsuit’s allegations and said it’s preparing a “vigorous” defense.
Forget former President Trump still claiming he won the 2020 election. There’s plenty of channel conflict and controversy involving SolarWinds, Alteryx, Zoom and RingCentral, and more.
New hires, changing channel programs, security breaches and M&A are typical Channel Futures fare. But there also are plenty of eye-opening controversies that draw you to the watercooler. There have been quite a few since our last roundup of channel conflict and controversy in November.
Recent hubbub involves a racially charged tweet costing Alteryx’s former CRO his job, the never-ending drama around the giant SolarWinds hack, and Zoom suing longtime partner RingCentral.
In addition, the Federal Trade Commission (FTC) is gunning for Frontier Communications, creating new legal hassles after the company emerged from Chapter 11 bankruptcy last month. Furthermore, layoffs by Cisco, McAfee, VMware and more amid the pandemic had readers talking.
So kick back and click through the slides above. Revisit the controversies and conflicts that have impacted the channel over the past several months.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Edward Gately or connect with him on LinkedIn. |
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