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
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
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
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
Continued from page 1
MICROSOFT: Settling With the World
The world’s largest software company was also the biggest
defender of lawsuits, as years of litigation at home and antitrust
investigations in Europe piled up.
But with its antitrust appeal of the European Commission’s ruling already complicated by a European court ruling in December that upheld antitrust penalties against the company, Microsoft is making 2004 a lawsuit-settling year. The company cleaned up the last four outstanding antitrust suits brought by individual states unhappy with the Department of
Justice’s settlement, then went to work on its competitors — in a good way.
The most surprising rapprochement was with Sun Microsystems. The two ended their legal war with a landmark $1.9 billion settlement of long-running charges against Microsoft involving Java.
The two companies have since banded together OPEN SOURCE: Apps and the OS Make Gains Open Source applications The operating system. Open source is more than just Linux, though it is perhaps its defining The year marked the end of life for Red Hat Linux and two version releases for its Linux continued to face the challenge presented by SCO in 2004, and Linux The applications. Mono, the Open Source .NET framework implementation, created a How can anyone talk about the year in technology without mentioning Though blogging as a phenomenon sprouted quite a few years The food GLOBAL TRADE: More Than The EU and Microsoft RFID: Planning at a Whole New Level TELCOS: Getting Your Fiber
Fiber to the Home is not a new idea. It’s been circulating among the
The carriers have earmarked billions of dollars to deploy optical fiber in
SBC has also licensed SAFE SURFING: Return of the Browsers As security firms one by one warned against using Internet Explorer due to Although there are Browsers used to be ho-hum after SYNDICATION PART II: A Little Music While Banging the DRM on P2P It might be faster to count up who didn’t launch online music services in 2004, or strike alliances in the hot e-commerce sector. Apple’s iTunes service (as well as its iPod digital media device) remained a favorite with many users and were credited with helping the nascent industry expand. But services from MSN, RealNetworks, AOL and a bevy of newcomers such as Wal-Mart and even CNET are also in in the hunt for a piece of the growing online music pie. Industry players also bemoaned the different digital rights management system and incompatible media players as a drag on adoption rates and growth curves. The bad blood between RealNetworks and Apple got a bit worse after RealNetworks launched Harmony Technology, a DRM translation technology that lets consumers securely transfer purchased music to every popular secure music device on the market, including Apple’s iPod. As different DRM formats swirled around the industry, peer-to-peer networks continued to fend off the entertainment industry’s lawsuits to stop copyright infringement on the file-swapping networks. As the year wound down, the U.S. Supreme Court said it would hear arguments in the case of MGM vs. Grokster, which will weigh the merits of the contentious legal battle between music publishers and peer-to-peer (P2P) interests. The case could help redefine copyright in the digital age, such the way the high court’s landmark 1984 Sony Betamax decision influenced the VCR market and home entertainment. STORAGE: Federal Mandates Written by: Roy Mark, Colin Haley, Susan Kuchinskas, Sean Michael Kerner, Clint Boulton, Jim Wagner, Erin Joyce, Tim Gray, Catherine Pickavet and Michael Singer Also see the roundup of the year in Congress: A Busy Year for IT in DC
on interoperability and Web services
Microsoft still is in the midst of a five-year appeal of the EU’s monopoly
judgment against it, but when the EU
cast a cold eye on its acquisition of
ContentGuard with Time Warner, the partners brought in Thomson Media, a
French company, to
sweeten the deal.
covering virtually every market segment were introduced in 2004, creating no shortage
of media buzz. Like almost every year since open source first hit the
mainstream, pundits on both sides claimed that the open source desktop and
applications were ready or not ready for the enterprise.
operating system. The release of the 2.6
kernel promised enterprise grade functionality on par with
anything out there. By year’s end, Novell’s SUSE Linux division, which it
acquired in 2003, was the only enterprise distribution to include the new
kernel (Red Hat Enterprise Linux 4 will be released in the first quarter of 2005 will include
it). Non-enterprise distributions, such as Red Hat’s Community Fedora
Project, Mandrakelinux and others, also began to include the 2.6 kernel in
2004.
Fedora Core project. SUSE Linux was further integrated into the Novell
marketing machine and Mandrakelinux was resurrected from bankruptcy. The
Linux desktop benefited from multiple upgrades from both KDE and GNOME in
2004, and both Red Hat and Novell each announced enterprise Linux desktops.
vendors and resellers (IBM and HP) moved to indemnify their customers. The GPL
itself was called into
question by SCO, though various studies came out showing that the legal
action wasn’t chilling enthusiasm for Linux.
buzz this year as a Microsoft alternative. Alternative browsers, most
notably Mozilla’s Firefox, challenged Microsoft’s dominance of the browser
space. OpenOffice.org won new converts, GAIM gained ground in the IM space and
MySQL challenged the proprietary database giants.
SYNDICATION: The Rise of RSS, Bloggers
RSS
and bloggers? You can’t. For sheer impact on the tech industry, the rise of
RSS and blogging
technology in 2004.
ago, Really Simple Syndication or Rich Site Summary (take your pick) exploded in 2004, thanks to a passel of easy-to-use
blogging software releases in the marketplace. From the growing influence of political bloggers
who helped unmask CBS’s fraudulent document story scandal, to technology
pundits that now help frame the industry’s news agenda, the gusting winds of
RSS and blogging are quickly leaving change in their path, fundamentally
changing how information is distributed.
fight among competing syndication formats, RSS and Atom, appeared to be
working its way out among different proponents. Even dictionary publisher Merriam-Webster got in on the act by naming Blog its #1 word of the year based on the number of online lookups.
Globalization of the U.S. technology industry continued unabated in 2004
with Geneva, Beijing and Bangladore increasingly becoming major ports of
calls for American-based firms.
Microsoft, in particular, had a busy year in Europe defending its Windows
franchise and DRM technology.
Redmond lost out on its appeal to the European Court of First
Instance to stay
an order to provide a version of
the Windows operating system that does not include Microsoft’s Windows Media
Player and to provide more licensing access to server communication protocols with Windows.
In addition, the EU
opened an investigation into Microsoft’s and Time
Warner’s efforts to acquire ContentGuard, a vendor of digital rights
management. The EU has concerns that the acquisition will strengthen
Microsoft’s dominance in the DRM technology market.
China dominated news throughout the year with first agreeing to step down
from a proprietary wireless LAN encryption scheme within its borders and
then agreeing to phase out discriminatory VAT taxes on integrated circuits.
By the end of the year, IBM, which is credited with launching the Personal Computer revolution in the early 1980s, sold its PC division to China’s Lenovo Group for $1.75 billion.
Thanks to mandates from the nation’s largest purchasers, radio frequency
identification, also known as RFID, auto-ID and contactless data
transmission, went from a little understood technique for automating
warehouse and supply-chain operations to a major initiative for the big
consulting and software companies.
While the most obvious benefits of RFID are speeding supply chain operations
by eliminating the need to manually scan barcodes, the real juice will come
from plugging the resultant data into corporate systems. Businesses will get
a new view of trends, identify weak points in their operations and take
planning to a whole new level.
Research firm IDC considers RFID a disruptive technology that will create a
new tech boom for hardware, software and services vendors.
broadband community for years. But 2004 marks the year that large telecom
carriers, especially
Verizon and
SBC, finally got serious about it.
neighborhoods to deliver high-speed Internet connections, VoIP services and
video, including TV and video-on-demand.
Microsoft’s IP TV platform to deliver video content, a
major challenge to Comcast
and other cable giants. Television
and video also figure prominently in the fiber plans of other major
carriers.
security problems in 2004, Mozilla’s open source brainchild, Firefox,
kept capitalizing on IE’s vulnerabilities as more users discovered the open source browser. Since
the release
of Firefox 1.0 in November, more than eight million users have
downloaded the browser.
variants
among research firms
over how much market share Firefox is gaining at IE’s expense, there is no
question that it is chipping away at IE’s dominant share. A year ago, IE
held over 95 percent of the browser market. By some accounts, that share has
slipped to between 88 and 92 percent. And that’s not counting Apple’s Safari
browser as well as Opera’s. And just to keep things interesting, AOL released
an updated prototype of its Netscape Navigator browser, which made the most
of features in both IE and Firefox.
Microsoft vanquished Netscape in the browser wars a few years back and
started to disband its IE unit — mission accomplished. But lately, Redmond
has begun to call its browser team back to arms, yet another sign that
browsers gained new status in 2004.
LONGHORN: Bum Steer?
It’s unclear whether there’s pent-up demand for still another version of
Windows, but demand will have a while to grow. After a couple of years of tight
lips, Microsoft
committed to delivering Longhorn,
an entirely new operating system built from the ground up, in 2006.
Redmond never had given a full outline of the product, precisely because it
didn’t want to make promises it couldn’t keep. It kept repeating that
Longhorn would be delivered when ready. But analysts and aficionados had
gleaned hints from executive speeches, blogs and developer conferences.
Then, the feature cuts began.
Microsoft said Longhorn would not include the
innovative file system, WinFS, which would allow users to search through
multiple file types on the desktop. More feature cuts may come.
Analysts remain divided on whether Longhorn’s innovations will be enough to
prompt businesses and consumers to upgrade. With uptake of XP and Windows
2003 stalling, maybe Windows 98 users finally will be in the mood and go
directly to Longhorn. If Microsoft can deliver on the security features it
promises, and if exploits and spam continue to explode exponentially, the
prospect of a safe, secure machine may be a dealmaker.
SOA: Promising Re-Emergence
Distributed computing software saw some momentum this year, as Web services
mindshare.
Programmers are experimenting with the best ways to help applications speak
to one another to transmit critical documents; vendors are trying to figure
out the best ways to package and sell Web services to customers.
Hence the re-emergence of service-oriented architectures (SOA)
as a way to help companies shuttle business documents to and fro, reusing
assets such as code when necessary to cut costs.
In and indication of just how important Web services and SOAs are, Microsoft
and Sun Microsystems made them the centerpiece of their
April agreement,
pledging some interoperability between their products.
All indications are that’s the tip of the iceberg, as research firm ZapThink
predicts
the market for SOA platforms will balloon from $4.4 billion in 2005 to $43
billion by 2010 … if the heavy thud of XML doesn’t get in the way.
While HIPAA, Sarbanes-Oxley and SEC 17a-4 sound like a radical faction, a
disease, and a penal code, respectively, such government mandates are
increasingly dictating the way companies store information. The spate of new
laws in 2004 found corporate tech seeking storage infrastructure that would
help them keep in step with the latest government regulations.
But it’s not about the manner in which information is stored as much as it’s about the
information system’s ability to retrieve important files quickly, or
reprioritize data by putting it on lower costing storage. Storage systems
must also retain data per policy by a certain number of years to meet these
stringent guidelines.
Such is the chore of an
information lifecycle management strategy,
cradle-to-grave document management that vendors who consider themselves
storage providers or information managers have been making in the past two
years. EMC, IBM, HP and StorageTek are all making ILM pitches.
In December, Oracle announced Files 10g, an enterprise content management
system designed to help customers corral their files. Expect Oracle to try to
steal market share from Microsoft, IBM and EMC in the next year.
