The Top Tech Disasters of 2022
The year 2022 was a tough one for tech. Hit by geopolitical trauma, macroeconomic slowdown, inflation fears, and interest rate hikes, companies worldwide suffered. Cue supply chain woes, reduced sales, and layoffs. In this atmosphere, stocks fell, funding stalled, and M&A got riskier.
To memorialize the year now disappearing in the rearview, Futuriom has compiled a list of the top tech disasters of 2022. Let us know if you agree, disagree, or have something to add to the following list (presented in chronological order):
NVIDIA’s abandoned Arm deal. After a long struggle to make it work, NVIDIA (Nasdaq: NVDA) and SoftBank Group in early February threw in the towel on a deal that had been expected to top $50 billion. NVIDIA agreed to pay SoftBank $1.25 billion as a kill fee, and SoftBank continues to plan an Arm IPO, though that’s been delayed by economic uncertainties.
The war in Ukraine. Russia’s invasion of Ukraine on February 24 unleashed dire consequences for the global tech economy, including trade embargos, supply chain issues, and cybersecurity threats. The fallout from this ongoing disaster persists and will likely affect tech markets for years to come.
China's supply-chain crisis. By mid-March, increased Covid cases tripped off a widespread lockdown in the PRC, choking off the flow of much-need parts to tech companies worldwide. With manufacturing paused in cities such as technology center Shenzhen, makers of tech products were caught without key parts, particularly in the semiconductor space. The recent lifting of restrictions could further hinder logistics as employees fall victim to the spreading virus.
Canada’s Rogers outage. On July 8, an accidentally deleted router filter crashed the network of Rogers Communications Inc. (NYSE: RCI), one of Canada’s largest carriers. The outage affected about 12 million users of Rogers’ services, including government customers, 9-1-1 callers, and businesses relying on Canada’s Interac payment network. The fallout resulted a CEO firing, a government hearing, and talk of punishing Rogers with fines.
Darktrace’s ongoing scandal. British cybersecurity firm Darktrace, which specializes in AI-based tracking of malicious threats, is going strong despite ongoing questions about its founder and major shareholder, Mike Lynch. Still fighting extradition to the U.S. on allegations that he inflated the value of Autonomy, a company he sold to HP in 2011, Lynch continues to cast a shadow on Darktrace, despite its successes. In September, private equity firm Thoma Bravo halted plans to acquire Darktrace, though the Lynch question was reportedly not part of that decision.
Elon Musk’s acquisition of Twitter. Billionaire Elon Musk’s purchase of the social media platform in October 2022 for $44 billion has been a hairball. After firing the company leaders and much of the staff, the founder of Tesla and SpaceX made a flurry of decisions -- and decision reversals -- that confused Twitter’s followers and advertisers. In a poll created by Musk himself recently, 57.5% of platform users voted against his continuing as CEO. Expect more drama.
FTX’s collapse. The cryptocurrency exchange FTX and its sister firm Alameda Research collapsed early in November, followed by the arrest of founder and CEO Sam Bankman-Fried for money laundering and various frauds associated with the alleged mishandling of customer funds. The aftereffects of this debacle continue to resonate throughout the crypto market.
Meta. Meta CEO Mark Zuckerberg’s insistence on the profitable future of the so-called metaverse (in which virtual and augmented reality combine with consumer and business applications) led to the company sinking billions into its Reality Labs division, despite that entity’s massive losses. At the same time, Zuck apologized profusely when he told employees in early November that 13% of them – over 11,000 people -- would be laid off as a result of his misreading of post-pandemic market needs. While Meta’s Facebook, Instagram, and WhatsApp platforms continue to draw sales, the firm has lost 64% of its market value over the past year. The next few quarters will determine how well Meta can sustain its ambitions.
Rackspace’s massive email outage. Cloud hosting firm Rackspace suffered a ransomware attack on December 2 that crashed a portion of the company’s hosted Microsoft Exchange service. Apparently, the email wasn’t properly backed up, the company’s response has been poor, and email continues to be affected, with users expected to spend long wait times to upgrade their accounts and possibly pay for the retrieval of past data. In short, it’s been a disgrace, though Rackspace appears unrepentant.
And there we have it -- just a few of the leading tech snafus of the past year. Let us know what you think. Write to us at analyst@futuriom.com
