IT industry ends the year with a bang

News from the information technology industry was downright dull for most of 2004 -- until a couple of blockbuster deals jazzed things up as the year drew to a close.

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IT had its share of high drama in 2004 in the form of executive ousters and mergers, with two blockbuster deals coming just as the year drew to a close. But one emerging technology managed to make its way onto the list of top stories thanks to a generous helping of industry buzz.

"I don't look at it as a year where there were new inventions [or] amazing things happening every day," said Judith Hurwitz, president of the Waltham, Mass.-based Hurwitz & Associates consultancy. "It was a year that built upon a foundation over the past 10 years."

That's not to say there wasn't a fair amount of corporate intrigue, security scares and splashy technology releases. Following are stories that helped shaped the face of enterprise IT in 2004.

Oracle perseveres in PeopleSoft quest This story had a little bit of everything: courtroom drama, boardroom politics, a "poison pill" defense and government intervention. On Dec. 13, it all came to an anticlimactic conclusion. On that day, PeopleSoft ended 18 months of fighting to keep from being acquired by Oracle when it announced that its shareholders had agreed to allow the deal to go through. But to get its prize, Oracle had to make a few "final" offers to PeopleSoft, as well as fight back an antitrust challenge from the U.S. Department of Justice. Meanwhile, the fallout was far and wide. PeopleSoft CEO Craig Conway was shown the door by the company's board over his handling of the takeover defense, and the antitrust case exposed the startling revelation that SAP and Microsoft briefly talked about merging.

But for all its intrigue, did the Oracle-PeopleSoft saga really mean anything to those who make their living in IT? "To be quite honest, I watched it with only mild interest," said Ray Dixon, an IT specialist with ClearPoint LLC, an employee-benefits specialist based in Seattle. "We don't have any Oracle in our shop, and it's probably going to stay that way. And we don't have PeopleSoft either, so I wasn't really worried about it at all."

Symantec and Veritas agree to merge Just a week after the PeopleSoft-Oracle saga came to a head, a leader in the security industry and a leader in the storage industry agreed to a merger that will create the world's fourth-largest software company. In a stock deal valued at $13.5 billion, Symantec -- maker of the popular Norton antivirus product line -- concluded months of stealthy negotiations to acquire Veritas Software. Analysts are still pondering whether this is a good fit, but Symantec and Veritas say they'll be creating a one-stop shop for storing and securing data.

The emergence of service-oriented architecture What began as an attempt to make software applications more nimble has turned into something of a Velvet Revolution in software development. Service-oriented architecture, or SOA, is a software architecture that lets resources get shared over a network in a "loosely coupled" way so that one piece doesn't have to rely on another. Naturally, almost everyone who sells software now says their product is based on SOA.

Count Gartner Inc.'s Alexander Linden as among those who have watched with great interest as the concept of SOA took root this past year. "We in the emerging trends section don't look too much into the merger issues and whether CEOs depart or not," said Linden, a research vice president for Stamford, Conn.-based Gartner. "We definitely have an eye on service-oriented architecture and how this evolves."

Hurwitz agreed that the best is yet to come for SOA. "I think it's transformational," she said. "I don't think a lot of people recognize what it is. It becomes a whole different way of handling software because it gives you incredible flexibility."

IBM sells its PC business to Lenovo Big Blue closed one of the most important chapters in its storied history with the sale of its PC business to China's Lenovo Group. A pioneer of personal computing in the 1980s, IBM had steadily lost market share to rivals, although its notebook business remains robust. It appears that Big Blue may have big-picture plans, however. The company will retain a nearly 19% stake in the PC business, it installed an IBMer in the top spot at Lenovo and the IBM brand name stays in place for five years.

Microsoft releases Windows XP Service Pack 2 With the Longhorn version of Windows still two years away, Redmond made headlines with an upgrade to an operating system that first hit the street in 2001. Windows XP Service Pack 2, or simply XP SP2, was a collection of new features that focused on security, an issue Redmond had been hammered on since outbreaks of Internet worms became more frequent and more widespread about three years ago. Despite some problem areas such as application compatibility, SP2 was generally well received, although many enterprises are taking their time deploying it.

The outsourcing trend continues Whether you believe Forrester Research analyst John McCarthy's numbers, or the U.S. Department of Labor's stats, the overall conclusion is the same: American companies are sending lots of jobs overseas, including many in IT. In 2004, McCarthy updated his 2002 prediction that 3.5 million service jobs would be outsourced by 2015. It's more like 3.4 million now, said McCarthy, who argued that the Labor Department fails to take into account when companies outsource contractors, who are not full-time employees. In IT, jobs for programmers and call center specialists are increasingly shifting to places like India and the Philippines.

Companies rush to meet Sarbanes-Oxley compliance For large organizations, 2004 was supposed to be the year they met the first of the deadlines to comply with the Sarbanes-Oxley Act, legislation that places closer government scrutiny on corporate accounting practices. Because much of what companies do is now electronically documented, a huge part of the compliance effort fell on the shoulders of IT. And just as the race to meet the so-called Section 404 deadline neared, the U.S. Securities and Exchange Commission put the brakes on SOX compliance for one year.

Sanjay Kumar ousted at CA The impetus of the Sarbanes-Oxley Act was the massive Enron accounting scandal, but IT had a mini-Enron of its own in Computer Associates International. In 2004, CA chief executive Sanjay Kumar was fired -- and indicted -- over federal charges that he took part in an illegal stating of the software company's revenue, spanning several years. Late in 2004, longtime IBM sales executive John Swainson was brought in as CEO to help right CA's ship.

Linux gains mainstream acceptance Munich made the switch to the open source operating system, AT&T said it would consider open source desktops and Novell cemented its makeover as an open source vendor, all visible signals in 2004 that Linux is considered by many to be a maturing technology, rather than a hobbyist's passion. Even Microsoft appears to be resigned to the fact that Linux isn't going away.

Comdex is canceled For nearly 25 years, Comdex was a fall fixture in Las Vegas, a nearly weeklong celebration of technology that attracted up to 200,000 attendees at a whack. It was also a place where Microsoft's Bill Gates annually delivered a de facto State of the Union address for the high-tech industry. But eroding sponsor interest forced organizers to cancel the 2004 edition. And while a date has already been set for a 2005 show, many speculate that Comdex is cooked. The-all-things-to-all-people IT conference is no more.

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