The year 2005 saw many movements in the industry as technology convergence and vendor consolidation were the trends that plagued the newswires throughout the year.
Most notable of which was Oracle Corp.’s spate of acquisitions geared at enhancing its technology prowess beyond database management and into the vast enterprise application space – from the high profile, US$10.3-billion acquisition of PeopleSoft Inc. to the less prominent Retek and ProfitLogic buys, to the most recent Siebel Systems Inc. purchase (Oracle to buy Siebel).
Oracle’s consolidation strategy received mixed reactions from industry analysts (Oracle buying spree may intensify), as well. Experts following Oracle’s moves were confident the company could pull it off saying it has the resources to accomplish its goals. Others said integrating all its acquired technologies and providing a clear product roadmap would be the bigger challenges for Oracle. One big benefit is clear though: these acquisitions gave the database giant an even larger customer base. With the Siebel buy alone, Oracle inherited 4,000 customers with 3.4 million CRM users.
Veritas Software Corp. and security vendor Symantec Corp. also finalized their marriage (We’re a perfect match) this year, with the companies’ leaders describing the move as a “convergence between information security and availability.” The merger sealed a growing trend toward the integration of data protection and security, and data recovery and storage, into an end-to-end “risk management” architecture.
The telecommunications market also saw significant activity around convergence as IP telephony paved the way for the inevitable move towards voice, data and video integration. As a result, telecom companies this year started taking the path of consolidation in a bid to take advantage of IP-enabled capabilities and provide customers with seamless communication applications.
In the U.S., SBC Communications Inc. started the ball rolling this year with its US$16-billion acquisition of AT&T Corp. in February (SBC’s long-arm acquisition), which had Canadian analysts pondering how the marriage would affect the Canadian telecom industry.
Other significant mergers in the telecom sector include that of Sprint’s and Nextel’s – forming the Sprint Nextel Corp. – and Verizon Communications Inc.’s US$6-billion union with MCI Inc. (Verizon sweeps up MCI). In the local front, Rogers Communications’ acquisition of Call-Net Enterprise Inc. (Rogers wins big) last summer was viewed by telecom analysts as a smart move, giving the media giant a far more extensive portfolio of telecom and data services.
Leadership changes and organizational shake-up among prominent industry players also managed to grab the headlines in 2005.
The controversial resignation of Carly Fiorina as Hewlett-Packard’s chairman and CEO in February (Fiorina steps down) left industry observers talking for months. It was no industry secret that HP was not happy with the lady CEO, but industry analysts still thought the development was all too sudden, and expected major changes in the way the organization would do business once the new HP chief steps in (Brace for change).
And true enough, when Mark Hurd took over (Hurd chosen to head HP) as the new head of the Palo Alto, Calif. company, he announced a massive global reorganization plan three months into office (HP plans to cut jobs). The move was expected to save the company US&1.9 billion a year, and a large part of the means to achieve that was cutting 10 per cent of the HP workforce over an 18-month period.
Brampton, Ont.-based Nortel Networks Ltd. also had its share of the limelight this year with the resignation of two senior executives in June (Nortel president resigns) and – four months later – the announcement of its new president and CEO Mike Zafirovski.
Though there was no apparent indication from Nortel of the impending leadership change, analysts were not surprised to hear then president and CEO Bill Owens was handing over the company to a successor. To them it was simple: Owens – with his strong, “military-type” leadership – was hired to get the company back into decent financial footing, and now that he has accomplished that, it is time to move toward strengthening Nortel’s hold in the market (Nortel’s new chief).
This year, the industry saw chipmakers making good on their words to bring dual-core processor technology to the market place. Intel Corp. and Advanced Micro Devices Inc. (AMD) butt heads trying to get a head start over the other in this dual-core race (AMD dares Intel). Both companies shipped their own versions of dual-core processors in April – Intel’s Pentium Extreme Edition 840 (Intel’s first dual) and AMD’s Opteron microprocessors (Dual-core set to ship).
The industry also started getting into the 64-bit craze – the next generation of computing technology that promises billions of gigabytes of memory more than its 32-bit predecessor (64-bit or bust).
Industry players agreed that this new breed of technology should be application driven, allowing users to run the 32-bit applications on 64-bit processors without performance degradation. The availability of this new computing power has got the enterprise mulling over the question of when to implement (Getting ready).