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5 Companies That Had A Rough Week

For the week ending August 17, CRN looks at IT companies that were unfortunate, unsuccessful or just made bad decisions.

The Week Ending August 17

This week's roundup includes companies facing tough decisions from judges, shareholders, and confronting revelations of security flaws and suspect privacy practices.

Rimini Street suffered a big loss in court, with a federal judge barring the software maintenance provider from offering some support services around Oracle products.

Intel discovered more chip vulnerabilities, and a Google practice of tracking users shocked the industry. Also, several executives at solution provider Black Box learned that shareholders had bucked common practice to deny them raises.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

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Injunction On Rimini Street

In a decision with serious ramifications for the software maintenance industry, a federal judge barred Rimini Street from selling controversial services around Oracle's enterprise products.

The long-running legal feud over the lengths third-parties can go to offer and maintain proprietary software from name-brand vendors has seen twists and turns as Oracle looks to set a precedent that will keep other upstarts from cutting into a highly profitable support business.

After an initial injunction was vacated by the Ninth Circuit Court of Appeals, U.S. District Judge Larry R. Hicks on Tuesday granted a new one, finding Rimini infringed on 93 Oracle copyrights and "irreparably injured" the software giant's business.

Rimini Street, based in Las Vegas, said it's not done fighting Oracle, and pledged to appeal the decision, which has "the same legal defects and flaws" that undid the first injunction in the case.

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Activist Raids Symantec's Board

Starboard Value revealed it had taken a 5.8 percent stake in Symantec and privately nominated five directors to the security giant's 11-person board.

The activist hedge fund wants to see operational changes at Mountain View, Calif.-based Symantec to improve margins, especially in its business-facing segment, according to the Wall Street Journal.

Starboard said Symantec lags behind its peers despite being one of the largest cybersecurity vendors, the Journal reported.

The hedge fund believes its board nominees can help remediate any potential financial reporting issues and improve operations.

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Intel Confronts New Chip Vulnerabilities

Intel disclosed on Tuesday three more vulnerabilities within its server, client and workstation processors, signaling that security issues for the company's CPUs are far from over.

The Santa Clara, Calif.-based company said the L1 Terminal Fault and two related vulnerabilities are similar to previously disclosed side-channel analysis security issues, including the Meltdown and Spectre variants that kicked off a new level of concern over CPU security when they were disclosed in January.

In a blog post published Tuesday, Intel product security head Leslie Culbertson said the new vulnerabilities can be mitigated through updates being issued by industry partners and the open source community, as well as microcode updates that Intel released earlier this year.

Culbertson also noted future CPUs, starting with Intel's next-generation Xeon Scalable processor, code-named Cascade Lake, and client processors coming out later this year will come with new hardware-level security protections that have been touted for months now.

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Google Tracking Exposed

Research emerged this week revealing certain Google applications are storing location data, even after consumers have turned location-tracking services off.

Experts said news of the unwanted tracking could ding the cloud giant in the eyes of business users.

Google's location-tracking on Android and iOS devices was first revealed by an Associated Press investigation and later confirmed by computer science researchers at Princeton University. Despite users turning off location tracking in the privacy settings on their mobile devices or on the web, certain applications still take time-stamped snapshots of the user's location and store that data for when the user performs a search, opens applications such as Google Maps, or checks the weather.

While the research evaluated consumer usage of Google apps, many businesses today are also relying on the same applications.

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Compensation Plan Denied For Black Box Executives

In a non-binding vote, Black Box shareholders rejected an executive officer compensation plan that included $969,000 in severance for former CEO Eslie "E.C." Sykes, who left the company in 2017 after serving in the top job for nearly two years.

In its proxy statement, Black Box said the current executive board -- CEO Joel Trammell, Chief Financial Officer David J. Russo, and general counsel Ron Basso -- is paid below market rate, in terms of salaries.

It’s rare for executive compensation votes to fail. According to a June 6 analysis from consulting firm Semler Brossy, just 2.1 percent (32 of 1,498) of Russell 3000 companies had their compensation proposals rejected so far in 2018.

Black Box has struggled to regain footing after the company saw shares drop nearly 64 percent, from $21.01 to $7.62, in 2015 amid persistent revenue woes, which then-CEO Michael McAndrew blamed on the performance of his sales team. McAndrew was replaced by Sykes in February 2016.

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