THE OKRS REMAIN
Welcome to Mostly Cloudy! Today: three new enterprise tech companies join the parade of job cutters, hackers are trying to hire your security pros, and Microsoft reveals the cause of last week’s major outage.
While concerns about the health of the enterprise tech market were somewhat alleviated last week by Microsoft’s slowing-but-still-strong growth numbers, the current moment still provides a great excuse for SaaS companies to trim their costs.
Workday, NetApp, and HubSpot all cut jobs Tuesday, as noted by Marketwatch editor Jeremy Owens on Twitter. The companies cited a variety of macroeconomic reasons for the moves, although Workday was careful to point out that it was not among the enterprise tech companies that dramatically overhired during the pandemic only to throw those people back out the door when the tide turned.
As we cycle through the fourth-quarter earnings season, it’s getting hard to tell if the macroeconomic IT spending environment is really that bad. It does seem clear that businesses are taking longer to make spending decisions on new software than they might have over the past two years, but several market researchers looking across the entire market — rather than a single vendor’s perspective — have suggested that 2023 should remain a strong year for IT spending.
However, executives like NetApp’s George Kurian (far from the only person to adopt this stance, to be clear) seem to be using this period of economic anxiety to imply that Times Have Changed.
“Companies are facing an increasingly challenging macroeconomic environment, which is driving more conservatism in IT spending,” Kurian wrote in a note to employees Tuesday. That doesn’t necessarily imply that companies are spending less overall on enterprise software and services, but that they are more carefully weighing their options and perhaps evaluating their vendors more carefully than in years past.
On the other hand, HubSpot suggested that demand for software that supports marketing efforts — one of the first line items to go in any economic downturn — has actually fallen.
“We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected,” chief executive Yamini Rangan said in an e-mail to employees, as reported by the Boston Globe. “Unfortunately, the level of uncertainty in customer demand now tells us that we may have more challenging times ahead. We need to set ourselves up to weather this storm.”
Still, the current level of “conservatism in IT spending” appears little more than air cover for enterprise vendors to get rid of around 7% of their employees, which seems to be the magic number in this round of cuts, for some reason.
If you’re in the market for an upgrade in 2023, you might as well cite the “increasingly challenging macroeconomic environment” to demand pricing flexibility from the vendors who are supposedly so worried about losing business that they’re willing to make the reps who remain at those companies work harder for your budget.
Companies that are actually trying to retain talent increasingly have to compete with some of the shadier elements of the world’s IT environment, according to new research from Kaspersky Labs. Dark web forums are reportedly brimming with thousands of cybersecurity and software development jobs that promise seven-figure salaries and what you’d have to imagine is a slightly more relaxed work environment than the back-to-the-office culture currently sweeping Corporate America.
Of course, it takes a certain kind of person to be willing to work for groups that are probably engaged in criminal activity, and Kaspersky noted that in most cases the salaries offered in these dark web forums aren’t that much higher than what qualified talent could get from a legit company. But people make bad decisions when they need money quickly, such as after they’ve been laid off from a steady job because the finance department thought it could get away with cutting costs by 7% because everybody else is doing it.
Around the enterprise
Microsoft blamed a networking configuration error for last week’s global outage, which took down everything from Office to Azure for several hours.
Somehow Red Hat Enterprise Linux was not an available option on Oracle’s cloud infrastructure, but the two companies corrected that Tuesday.
Todd Weatherby, the AWS executive named at the heart of a sweeping gender-discrimination lawsuit targeting its ProServe division, is leaving the company, according to Business Insider.
Salesforce agreed to accept three new board members as part of investor demands for change following a disappointing 2022 and an unclear product-development strategy.
Thanks for reading — see you later this week!