When compared to the consumer side of the home, there is a common misconception that covering the enterprise is uninteresting, but having covered the space for several decades, I can assure you that nothing could be farther from reality. For one thing, there’s a lot of money in the business, as seen by Oracle’s $28 billion acquisition of Cerner last week, which shook up the healthcare sector, and UiPath’s climb from obscurity to $35 billion RPA powerhouse earlier this year, before reversing course after going public.
There is intrigue, such as when activist investors try to compel firms to make decisions they would not ordinarily make, and boardroom disputes, such as the one at Box this year. There is drama, such as the three-year war among the world’s largest business infrastructure providers for the $10 billion Department of Defense JEDI cloud contract, which included litigation, multiple internal reviews, and presidential involvement.
So you can talk a lot about the company… but is it boring? Certainly not, and this year was no exception. As a result, I have decided to wrap out 2021 with a look at five tales that shook the business. It is difficult to choose only five stories from a year’s worth of news, but here are my picks.
Jeff Bezos’ decision to stand down as CEO and take on the role of chairperson was perhaps the greatest story of the year. Now, that did not have a significant business impact in and of itself because Amazon is an e-commerce firm that does not technically fall under my jurisdiction, but then there what occurred afterwards. When Bezos made his announcement in February, he also mentioned that he had picked his successor, Amazon Web Services CEO Andy Jassy. He had aided in the growth of Amazon’s cloud infrastructure business, which had reached a run rate of $64 billion in the most recent quarter.
It would be difficult to replace him, so they went to an old acquaintance when they chose Tableau CEO Adam Selipsky to take over. Selipsky had previously worked for Amazon Web Services (AWS) from its creation until 2016 when he departed to become the CEO of Tableau. It is now his responsibility to keep the train rolling. He has momentum, but competition is becoming increasingly tough, and it will be interesting to see what happens next year under Selipsky’s leadership.
Bret Taylor, a Salesforce executive, got two significant positions in the same week at the end of November, making for a wonderful week for him. To begin with, he chose Chairman of the Board of Directors at Twitter. If that was not enough, he was also chosen co-CEO of Salesforce, he had risen quickly through the ranks after Quip bought for $750 million in 2016. While Twitter experienced its own upheaval with long-time CEO Jack Dorsey stepping down and Parag Agrawal taking over, the promotion to co-CEO at the CRM behemoth was arguably the greater story from a business standpoint.
Taylor will continue to report to business co-founder, chairperson, and co-CEO Marc Benioff, according to The Information, but the move puts Taylor in a position to be Benioff’s heir apparent if Benioff decides to step back into the chairperson role in the same manner that Bezos did earlier this year. Another theme to watch in 2022 is if Salesforce reconsiders its intention to purchase Twitter, which it considered in 2016 before abandoning.
Activist investor Starboard Value attempted to take over the board of directors of Box, which would have likely resulted in the ouster of co-founder and CEO Aaron Levie, the sale of the firm, or both. It was the conclusion of months of drama, and it established it as a significant enterprise narrative line for the year 2021.
In 2019, activist investor Starboard Value purchased a 7.5 percent interest in the cloud content management company, which would expand to 8.8 percent in 2020, giving the firm significant influence over the company. They kept silent for a while, but last year they decided to make a move and notified Box that they intended to take over the board, resulting in a proxy fight.
Box responded with a $500 million investment from KKR, further enraging Starboard, filed a filing with the SEC opposing Starboard’s slate of board members, and released their earnings report early to give voters an opportunity to see their most recent performance.
As fate would have it, the business had two strong quarters after Starboard’s intervention and comfortably won the proxy fight, preserving the status quo for the time being. What will happen in the year 2022? As I have stated, it may be time for Box to make some big steps and invest some of KKR’s money in complementary services.
