2004 Top 10: The big stories

If there were any lingering doubts that we are in the post-PC era, several big stories this year should have cleared them up. The sale of IBM Corp.’s PC business to China’s Lenovo Group Ltd., and the death of Comdex, were powerful reminders that IT is in a transitional stage.

This transitional era involves not only shifts in computing technology per se, but issues related to law and technology strategy. Would technology advance more rapidly if patents were disallowed? Can users deploy mission-critical, open-source systems secure in the knowledge that the legal underpinnings of the code are sound? There are no easy answers, as the biggest stories of the year reveal.

Here are the top 10 IT stories of the year, not necessarily in order of importance:

–IBM bows to reality, sells PC unit to Lenovo If there ever was a sign of the times, it was IBM’s sale of its PC unit to China’s Lenovo Group just a few weeks before the year ended. The deal, which will give IBM more than a billion U.S. dollars in cash and equity, calls for IBM to keep its foot in the PC arena in order to continue offering a full range of services and products. IBM will own 18 per cent of Lenovo, which will be headed by a current IBM executive and headquartered in New York. Still, there is no doubt that the company that gave legitimacy to the PC revolution of the 1980s essentially is exiting the PC business because margins are too thin and the competition is more fierce than ever. Analysts expect more vendor consolidation over the next few years. The Lenovo deal also pointed to ….

-China: The next India, or the next …. U.S.? While Western vendors have for years been beating down the door to get into China, this year the country began to emerge as a player in its own right. Speaking in Beijing in September, Cisco Systems Inc. president and chief executive officer John Chambers said China “will become the IT centre of the world.” He was speaking in terms of decades, but nevertheless the year has seen major companies such as Accenture Ltd. and IBM, as well as Indian services providers such as Wipro Ltd., establish or expand outsourcing facilities in the country. The facilities still cater mainly to the local markets, but China’s IT and facilities infrastructure is stronger than India’s. As China fortifies its foreign language skills and piracy laws, look for its increasing presence in the service sector. Meanwhile, hardware and networking companies such as Lenovo and Huawei Technologies Co. Ltd. are reporting rapid international growth, while software companies such as Red Flag Software Co. Ltd. are starting to take more of a leadership role in international software trends.

–Oracle v. PeopleSoft part II: Larry wins it. So Larry Ellison meant it, after all! Many industry insiders thought the incendiary Oracle Corp. co-founder and CEO made a hostile bid for ERP (enterprise resource planning) rival PeopleSoft Inc. last year mainly to take advantage of the FUD (fear, uncertainty and doubt) that such a move was sure to cause. But on Dec. 13, Oracle closed the deal to buy PeopleSoft for approximately US$10.3 billion, ending an acrimonious takeover battle. Despite the many obstacles PeopleSoft put up, Oracle persisted and in September it got the regulatory green light to continue its pursuit when a federal judge rejected the U.S. Department of Justice’s effort to block the offer on antitrust grounds. Finally, two years after Oracle’s initial bid, the story ends as another case of industry consolidation.

–Sun and Microsoft, friends after all One of the shocks of the year was to see Sun co-founder and CEO Scott McNealy sitting side-by-side with Microsoft Corp. chief executive Steve Ballmer, laughing and joking about their surprise “broad cooperation agreement.” The April deal settles all outstanding litigation between the formerly bitter industry enemies and calls for Microsoft to pay Sun US$1.6 billion to resolve antitrust and patent issues. The agreement appeared to be a winner for all sides: Sun gets cash to help its corporate makeover, which has entailed a souped-up Solaris and a new round of products for its core financial industry users; Microsoft placated a fierce rival and laid to rest some legal problems; and users, in theory, will get products that work better together.

–E.U. slaps Microsoft with antitrust ruling It took the European Union’s antitrust ruling against Microsoft to show that the software giant could not completely buy its way out of legal trouble. Though Microsoft settled various antitrust cases and complaints with payoffs to several states, companies and organizations, the E.U. in March hit Microsoft with a

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