There is often a mistaken impression that covering the enterprise is kind of dull when compared to the consumer side of the house, but having followed the space for a couple of decades now, I can tell you that nothing could be further from the truth.
For one thing, there’s big money in the enterprise, like Oracle buying Cerner last week for $28 billion and shaking up the healthcare vertical while they were at it, or UiPath going from obscure startup to $35 billion RPA juggernaut earlier this year, before falling back a bit after going public.
There’s intrigue, like when activist investors try to force companies to make moves they normally wouldn’t want to make, and battles for control of the board like we saw at Box this year.
There’s drama, like the three-year battle among the biggest enterprise cloud infrastructure companies in the world for the $10 billion Department of Defense JEDI cloud contract, a procurement process that had everything from lawsuits to repeated internal reviews to presidential interference.
So you can say a lot of things about the enterprise… but boring? Definitely not — and this year was no different. So I decided to close out 2021 with a look at five stories that rocked the enterprise. It’s hard to narrow 12 months of news down to the five biggest stories, but here are my choices.
The Bezos-Jassy-Selipsky musical chairs at Amazon
Perhaps the biggest news this year involved Jeff Bezos deciding to step back as CEO, taking on the chairman role. Now that in itself did not have a huge enterprise impact because Amazon is an e-commerce company, which doesn’t necessarily fall within my purview, but then there was what happened next.
That February day when Bezos made his announcement, he also indicated he had chosen his replacement, Amazon Web Services CEO Andy Jassy. He had helped build the cloud infrastructure business at Amazon into a massive business, surpassing a $64 billion run rate in the most recent quarter.
Replacing him wouldn’t be easy, but they turned to an old friend when they hired Tableau CEO Adam Selipsky to take over for Jassy. Selipsky had previously been at AWS from its inception until 2016, when he left to take over Tableau. Now it’s his job to keep the train moving. He has momentum in his favor, but competition is getting ever more fierce, and it bears watching what happens next year under Selipsky’s leadership.
Bret Taylor’s totally excellent week
One of the other top stories involved Salesforce executive Bret Taylor getting a couple of big jobs in the same week at the end of November, making for a pretty sweet week for him. For starters he was named chairman of the board at Twitter. If that weren’t enough, he was also named co-CEO at Salesforce, where he had moved rapidly up the ladder since his company, Quip was acquired in 2016 for $750 million.
While Twitter had turmoil of its own with long-time CEO Jack Dorsey stepping down and Parag Agrawal taking over, the move to co-CEO at the CRM giant was clearly the bigger news from an enterprise perspective. While The Information reported that Taylor would still be reporting to company co-founder, chairman and co-CEO Marc Benioff, the promotion put Taylor in line to be Benioff’s heir apparent should Benioff decide to step back into the chairman role in the same way that Bezos did earlier this year. Another storyline to consider in 2022 is whether Salesforce revisits its desire to buy Twitter, a move it thought of making in 2016 before walking away.
Box-Starboard Value proxy fight
Box beat back an attempt by activist investor Starboard Value to take over the board, a move that likely would have resulted in the removal of co-founder and CEO Aaron Levie, the sale of the company, or both. It was the culmination of months of drama and it made it a major enterprise story line for 2021.
Starboard Value, an activist investor, bought a 7.5% stake in the cloud content management company in 2019, which would grow to 8.8%, giving the firm considerable influence over the company. They remained quiet for a time, but last year they decided to make a move and put Box on notice that they wanted to take over the board, which resulted in a proxy battle.
Along the way, Box answered with a $500 million investment from KKR, further angering Starboard, filed a document with the SEC pushing back against Starboard’s slate of board candidates and issued their earnings report early to give voters a chance to see their latest results. As luck would have it, the company scored two decent quarters following Starboard’s action and easily won the proxy battle, leaving the status quo for now. What happens in 2022? As I wrote, perhaps it’s time for Box to make some bold moves, and use some of KKR’s money to buy some adjacent functionality.
DoD kills JEDI and announces new cloud initiative
The $10 billion, decade-long JEDI cloud contract has been drama-filled from the day it was announced in 2018. Over those years, I wrote more than 30 articles on it, so when the Pentagon decided to kill it finally this year, that was big news.
From the start, conventional wisdom said that it was Amazon’s contract to win. There were complaints that the RFP was written with Amazon in mind, but in the end it was Microsoft that won the deal. Amazon went to court though, stating that the previous president had directly interfered with the procurement process because of his personal dislike for Amazon CEO Jeff Bezos, who also happens to own The Washington Post newspaper. Amazon also argued that it should have won on merit.
Regardless, it succeeded in convincing a judge to put the project on hold in February 2020. It would never restart, and the DoD decided to move on to a new project in July, stating that technology had changed since 2018 (which is true) and wisely deciding to go with a multi-vendor approach with its new initiative, instead of the winner-take-all approach it had pursued with JEDI.
Dell spins out VMware
When Dell bought EMC in 2015 for $67 billion (later amended to $58 billion), it was the largest deal in tech history, and another doozy of a story to follow and write about over the years. VMware was always the crown jewel of the deal, and so enterprise reporters like me kept a close eye on what Dell was going to do with it. For a long time it stood pat, but it was a huge story in the early part of the year when it announced it was spinning out the company in a deal valued at $9 billion.
It seemed a little light perhaps given the amount of money that’s still on the books for the EMC deal. What happens next year? Could someone make a run to acquire VMware now that it’s free of Dell? Dell remains a major shareholder and still has plenty of debt left over from that EMC deal, so it is definitely something to watch in 2022.
It’s hard to choose just five because inevitably I’ve left out some worthy storylines. What would you have included? Leave a comment and let me know.
