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'OracleSoft,' Blogs and in Between: A Look Back at 2004

We called 2004 a year to build on the recovery after three years of a technology recession, and expected no shortage of sharp minds and strong personalities supplying new breakthroughs to the resilient industry. We were not disappointed.

Amid Oracle's battle to take over PeopleSoft, the low-level warfare between SCO Group and Linux, the emergence of 64-bit computing, BitTorrent, online music, blogs, and the spread of IP telephony, innovation blasted through the tech transom in its usual brisk pace this year.

internetnews.com looked back at it all and rounded up of some of the hottest stories and issues that dominated the information technology industry in 2004.

SECURITY: The Year of Networking Dangerously

Security is always a hot topic in any year of tech coverage, but the sheer volume of worms, viruses, spam, Internet Explorer flaws, buffer overflows, spyware (did we mention spam?) blasting through the digital ecosystem blew away prior years' security benchmarks.

The many faces of the fast-spreading bagle virus uploaded and executed malicious code on infected computers, MyDoom, Netsky, and Sober returned, new blended threats found multiple holes across corporate networks and spyware emerged as an even bigger headache for corporate networks.

For many companies, security issues ranked as the number one focus this year; in some cases, the problems even eclipsed cost as the usual top priority.

And that's without even mentioning the security exploits bedeviling IE this year (grabbing keystrokes, exploiting drag and drop, injection flaws), as well as skyrocketing phishing attacks, the rise of open-source botnets and for-profit virus writing.

Security was a major issue for the world's largest software company, as Microsoft released Service Pack 2 for Windows, thick with enhanced security. Some even called it an interim release of Windows, the changes were so vast. In some cases, the upgrade was enough to potentially break some applications. SP2 dominated the latter half of the year, as did security concerns in general about the Windows operating system.

By December, security player Symantec's $13.5 billion acquisition of storage company Veritas and Microsoft's acquisition of Giant Software threw the security issue into even higher relief for companies, leading the way for major new security products and approaches in the year to come.

ORACLESOFT: The Battle For Enterprise Applications

Oracle's dogged pursuit of PeopleSoft was rewarded on December 13, 2004 as PeopleSoft's board of directors agreed to sell the company for $10.3 billion. The deal capped 18 months of tense legal battles and market unrest that not only shook PeopleSoft, but left customers of all the major enterprise applications in a holding pattern, waiting on the outcome.

The story dominated headlines throughout the year, such as in October, when the the U.S. Department of Justice said it would not appeal a ruling that effectively stopped the DoJ's quest to block the merger. The news came on the same day of PeopleSoft's ouster of CEO Craig Conway, who was replaced with company founder and Chairman Dave Duffield.

For PeopleSoft and JD Edwards customers concerned that their products would be tossed aside, Oracle CEO Larry Ellison promised that the company would go out of its way to "over support" PeopleSoft customers for the next 10 years. The story will loom in 2005 as the merger -- and consolidation in the enterprise application market -- plays out.

VoIP: Finally Meaning Business

Internet telephony has been around for almost a decade, but it was mostly a phenomenon of Internet geeks. In 2004, sparked by technical advances and regulatory rulings, both corporate America and consumers began to give VoIP considerable commercial traction.

Among the companies that committed to VoIP this year were Bank of America, Ford and BT Group. Corporations see cost savings from moving voice and data onto one network and efficiency gains by giving employees new tools. The percentage of companies using the technology jumped from 3 percent last year to 12 percent this year, according to research firm In-Stat/MDR.

Much higher adoption rates are found in larger business segments. In-Stat/MDR forecasts that middle-market VoIP penetration will be at 34 percent by year's end, and at 43 percent in the large business segment.

The major U.S. telecom carriers launched heavy campaigns to win business VoIP customers this year. The battle also continued on the consumer side, with new ISPs taking on large carriers and cable companies and pushing down prices for home users.

WIRELESS: Consolidation Arrives

Industry-watchers have been talking about consolidation in the U.S. wireless market for years. In 2004 it finally happened as Cingular closed its $41 billion purchase of AT&T Wireless and Nextel merged with Sprint.

The moves reordered the industry, consolidating 75 percent of the mobile carrier business under three companies -- Cingular Wireless, Verizon Wireless and Sprint/Nextel.

At the same time, carriers began a new cycle of investment in third-generation technologies. Network equipment companies have been the early beneficiaries, tallying billions of dollars in orders extending out over the next several years.

With new systems coming online, carriers will be able to offer faster wireless broadband speeds that will enable new voice, data and video services.

A contentious spectrum swap agreement involving Nextel and the federal government was approved by the FCC in 2004 as well, after Verizon Wireless, which originally objected to the deal, was placated.

SEARCH: Big Bucks, Big Plans

Search is increasingly becoming consumers' first step in Web browsing. But thanks to the release of free desktop search tools from the big brands, it's also becoming the way to access files on the desktop. Search engine marketing became big business, but only when Google opened its books in preparation for its IPO did the industry realize just how big.

Eyes popped at the $390 million Google earned in the first quarter of 2004 and its more than 100 percent year-over-year growth -- and the race was on. Microsoft's Bill Gates vowed to beat Google at its game and MSN began working on proprietary search technology. Yahoo cut ties with Google and unveiled Yahoo Search.

Google's highly successful IPO and high-flying stock price seemed to usher in a new tech frenzy. VCs opened their purse strings and the stars returned to entrepreneurs' eyes. But search isn't only about ad revenue, it's a technology that enables everything from office productivity to speedy e-commerce. The struggle for market share will lead to innovation that benefits business and consumer alike.

Return of the browser, the spread of open source, and more top stories on next page