December 07, 2006, 9:51 PM — Megadeals signalled realignment in the IT industry and foreshadowed the Internet's multimedia future. A much-delayed Vista debuted amid speculation that it would be the last of the old-school, big-bang product launches. As software giants announced support for Linux, and manufacturers switched chip allegiances, the open-source and chip industries were thrown into turmoil. 2006 was a transition year, as IT giants positioned themselves for a new era of global competition in the post-PC era. Here, not necessarily in order of importance, are the IDG News Service's top 10 news stories of the year:
HP spy scandal: Board, and broad, implications
A board feud at Hewlett-Packard Co. hit the newspapers in September, leading to the resignation of Chairman Patricia Dunn. The board spat erupted over an investigation to see which board members leaked information -- including arguments about the ouster of former Chief Executive Officer Carly Fiorina -- to the press. The company used "pretexting," where investigators pretend to be the people being investigated in order to access private information. Criminal charges were filed against Dunn, legal counsel Kevin Hunsaker and outside investigators. Users are unfazed: Under Mark Hurd, CEO and newly appointed chairman, HP has overtaken Dell Inc. as the leading PC maker and IBM Corp. as the biggest IT company in revenue terms. However, the scandal has broad implications. Congress may make pretexting a federal crime. Oversight of corporate governance is a rallying cry.
Microsoft cuts a deal with Novell: Embrace and devour?
Microsoft Corp.'s November deal with Linux distributor Novell Inc. created turmoil in the open-source world. Microsoft will offer sales and support for Novell's Suse Linux, work on interoperability and indemnify Suse users and developers from potential Microsoft lawsuits against copyright infringement. Industry insiders say that Microsoft is driving wedges into the open-source community, protecting only some users from legal reprisals. The open-source world had already been rocked in October, when Oracle Corp.'s move to offer full support for Red Hat Linux had industry insiders worrying Red Hat Inc.'s business model would suffer. Ultimately though, the software giants' embrace of Linux is a sign that no one can ignore open source. Microsoft CEO Steve Ballmer said the impetus for the agreement came from customers. Though that's an old line, there's no doubt that open source has truly come of age.
Alcatel-Lucent: M&A mania grows
The merger of Alcatel SA and Lucent Technologies Inc., announced in April, formed a US$24 billion networking giant and signaled trends in global mergers and acquisitions. The hookup was necessary to face down competition in growth areas of the mature enterprise market -- such as VOIP (voice over Internet Protocol) -- while Chinese manufacturers put pressure on the West on the low end. 2006 is expected to yield 3,945 M&A deals, up from 3,455 in 2005 and the highest number ever, according to investment firm Innovation Advisors. Globalization and changing demand are fueling M&A in networking, the Internet, the chip industry and enterprise software. 2006 examples include Advanced Micro Devices Inc. and ATI Technologies Inc., Cisco Systems Inc. and Scientific-Atlanta Inc., Red Hat and JBoss Inc., and EMC Corp. and RSA Security Inc.
Google-YouTube: Convergence 2.0
Google Inc.'s ability to afford the $1.65 billion price tag for its acquisition of YouTube Inc., announced in October, underscored its status as the Internet's superstar revenue generator. The deal itself confirmed video's importance in the evolution of Web 2.0: the mashing together of user-generated content and multimedia applications. "Anybody who wasn't interested in YouTube was either asleep or not being honest," said Jonathan Miller, who was deposed as AOL LLC chairman after the Google-YouTube deal. Competitors scrambled. Lycos Inc. launched a movie-streaming service mixing elements of social networking and online video, while movie studios and TV networks rushed to put video online. Legal issues between Internet sites and content producers need to be worked out but one thing is for sure: convergence of video and the Net has hit prime time.
AOL search data release fans privacy debate
