Twilight of the Idols: The Information Technology Year in Review

There is little, if any, status quo in the technology business, and that fact was on full display in 2006.

Stalwarts such as Bill Gates and Scott McNealy took a back seat after decades of leading their companies; Dell (DELL), which seemed unstoppable over the past few years as other OEMs struggled, found its own share of troubles and saw its three-year lead in PC market share go to Hewlett-Packard (HPQ); and Microsoft (MSFT) negotiated a partnership with Linux player and former archenemy Novell (NOVL).

These transitions promise to continue into next year as the second (consumer) half of Microsoft's Windows Vista rolls out; chip makers continue their multicore push; and Oracle (ORCL) keeps growing, thanks to its voracious appetite for acquisitions.

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Here are eWEEK's most interesting stories from 2006:

Open Source Goes Big-Time

In short order in the last quarter of the year, big vendors made big strides in the open-source space, which could turn out to be good news for big customers.

Oracle announced in October that it will offer full support for the RHEL (Red Hat Enterprise Linux) operating system, a move CEO Larry Ellison told the audience at the OpenWorld show was designed to help address what he said is a key problem in Linux adoption: a lack of "true enterprise support for Linux."

The following month, Microsoft and Novell announced a set of collaboration agreements that includes patent protection for each other's customers and for their respective products.

Officials at the two companies said all the right things at the announcement of the controversial deal, but Microsoft CEO Steve Ballmer couldn't keep from getting a dig in at Novell, implying that the deal is an acknowledgment by Novell that Linux infringes on Microsoft intellectual property. The two companies later agreed to disagree on that point.

Red Hat (RHAT) officials saw the Oracle and Microsoft deals as attacks on their company.

Marc Fleury, senior vice president and general manager of JBoss, said the moves were made to counter Red Hat's purchase of JBoss, but added that the Microsoft-Novell deal was "a lot more clever than the one from Oracle, which was a 'for show' move."

Also in November, Sun Microsystems (SUNW), which has been releasing hardware and software to the open-source community for several years, finally released all versions of Java, fulfilling the desires of many developers during Java's 11 years in existence.

Security Woes

For those in the business of protecting IT from the host of dangers lurking out there, the news in 2006 wasn't good. Hackers are getting more organized and sophisticated, and so is the technology they're using.

Microsoft and the University of Michigan teamed up to create prototypes of virtual-machine-based rootkits that could be used to hide malware and maintain control of an operating system, introducing another threat into the picture.

Not long after that, a Microsoft security official admitted that recovering from malware programs and some types of spyware may become impossible without wiping out hard drives and reinstalling the operating systems.

Offensive rootkits — which are increasingly being used to hide malware and spyware — can avoid detection, so IT administrators can never really be sure if all traces of the rootkits have been removed, said Mike Danseglio, program manager in the Security Solutions group at Microsoft, in a presentation at InfoSec World in April.

eWEEK Senior Editor Ryan Naraine reported in October that botnets — collections of broadband-enabled PCs that have been hijacked in virus and worm attacks and used to launch spam, DoS (denial of service) attacks and malware — are becoming more prevalent.

Symantec found that 57,000 active bots per day were seen in the first six months of the year, and that 4.7 million computers were being used in botnets.

Chip Wars Heating Up

Tired of hearing for two years about how Advanced Micro Devices (AMD) was beating them to the punch and taking market share from them, Intel (INTC ) officials went on the offensive in 2006, revamping the company's server processor line in what they called the "summer of servers."

The initiative started in June, when Intel launched the dual-core Xeon processor 5100 series, the first chip line based on the company's new Core microarchitecture.

Over the next four months, Intel rolled out more than two dozen new server chips, including the first dual-core Itanium 2 processor. Intel followed that up by being first in the x86 space to release quad-core processors, launching its Xeon 5300 chips in November.

AMD answered Intel's chip onslaught with the launch of its "Rev F" redesigned Opteron processors in August, but the company won't be releasing its quad-core processors until mid-2007.

That didn't keep AMD officials from criticizing Intel's quad-core offerings, saying Intel's design of two dual-core chips on a single piece of silicon was less elegant than AMD's upcoming "native" quad cores.

AMD was able to boast additional OEM wins — in particular, longtime holdout Dell, which until this year had held steadfastly to its Intel-only mantra.

HP Investigation Goes Bad

Those hoping for a revival of the moribund "HP Way" with the passing of the CEO mantle from Carly Fiorina to Mark Hurd in 2005 were in for a disappointment when HP's board of directors admitted in September that it had conducted an investigation into news leaks that included the dubious method of "pretexting" to obtain the private telephone records of directors and members of the media.

Pretexting — a practice in which investigators contact phone companies and misidentify themselves in order to get records — and other nefarious means were used during the investigation, which initially had started under Fiorina's tenure in 2005 and resumed again under Hurd this year.

The scandal surrounding the investigation led to the resignations of three board members — including Chairman Patricia Dunn , who spearheaded the investigation, and George Keyworth, who admitted to being the leak — and several high-ranking HP executives, as well as criminal indictments of Dunn and others on conspiracy and other charges.

It also caught the eye of Congress, which held hearings at which Dunn, Hurd and others testified.

The investigation called into question Hurd's role. The CEO said he knew little of the methods being used in the probe but admitted that he did not give it as much oversight as he should have.

Still, the board quickly enabled Hurd, who already was president and CEO of HP, to consolidate his power by naming him chairman as well.

Gates, McNealy Step Aside

Two of the tech industry's founding giants — and, for much of the past two-plus decades, fierce rivals — Microsoft's Gates and Sun's McNealy in 2006 stepped down from leadership positions at their respective companies.

Gates, Microsoft's co-founder, chairman and chief software architect, said in June that he will leave the company in 2008 and that two chief technology officers, Ray Ozzie and Craig Mundie , would take over his software chief role. Gates said he wants to spend more time on his charitable work through the Bill and Melinda Gates Foundation.

McNealy, on the other hand, after announcing he would be stepping down as Sun CEO to make room for President Jonathan Schwartz , has pretty much handed over the reins to his successor.

That wasn't surprising, since Schwartz was given much of the credit for Sun's bold moves over the past couple of years, including embracing AMD's Opteron chips and Sun's decision to open-source much of its technology.

VA Data Theft

The theft in May of a laptop and hard drive containing the names, Social Security numbers and dates of birth of millions of retired veterans, active-duty personnel and some spouses brought into sharp focus the issue of security-sensitive data on employee notebooks.

The laptop and external hard drive were stolen from the Maryland home of an unnamed Department of Veterans Affairs employee who had taken the data home to work on a personal project.

The computer and hard drive were found a month later, and three teenagers were arrested in August in connection with the theft, but the theft of the data angered veteran and military groups.

A probe by the VA inspector criticized the lax oversight of records at the organization and the poor response from officials once the initial report of the theft had been filed.

Oracle's Buying Spree Continues

Any thoughts that Oracle's hot buying spree of 2005 would cool off in 2006 were dashed when the software maker completed the acquisition of Siebel Systems in January, marking the beginning of another busy year for Oracle.

This year, Oracle has bought 13 companies, equaling the number of purchases in 2005. From 360Commerce in January to Portal Software in April to Stellent in November, Oracle gobbled up companies big and small, in large part to build up its enterprise application offerings.

A number of companies involved in the land grab — HotSip and Sunopsis, for example — were targeted to build up Oracle's middleware capabilities, while other Oracle moves — such as its acquisition of SleepyCat Software — targeted the database space.

HP Passes Dell in PC Biz

In the third quarter of 2006, according to research companies Gartner (IT) and IDC (IDC), HP overtook Dell as the top PC vendor worldwide, regaining the position that Dell had held since the fourth quarter of 2003.

But the numbers reflected more than simply an industry ranking and highlighted a reversal of fortune for the two rivals.

HP, which struggled during Fiorina's tenure, became a more focused and streamlined company after Hurd took over in 2005. The results were put on display in 2006, with HP showing big revenue gains throughout the year, including a 7 percent increase in its fiscal fourth quarter.

In contrast, 2006 was a year of challenges for Dell. Revenue growth slowed, and the company was dogged by a Securities and Exchange Commission investigation into its finances, the recall of 4.1 million Sony (SNE) batteries in some of its laptops — though a number of other OEMs also recalled the batteries — and continued problems with its customer support.

Vista Debuts

It wasn't until the last day of the 11th month of the year that Microsoft finally rolled out Vista for businesses, the first new version of the company's operating system since Windows XP five years ago. But there was certainly enough buildup in the months leading up to the Nov. 30 release.

Upon Vista's release — Microsoft also released Office 2007 and Exchange Server 2007 the same day — the overall reaction was mixed.

Did the operating system have some cool new features? Sure.

But there was doubt over how quickly enterprises will adopt Vista — the general time frame is 12 to 18 months — and how compatible current hardware is with Vista.

Some industry analysts also said Microsoft would end up losing money this holiday season by not having the consumer version ready until late January 2007.

And Don't Forget ...

In 2006, the greening of the data center continued, with chip makers and OEMs continuing to roll out more energy-efficient products. Efforts were made to bridge the gap between IT administrators and facilities managers, and governmental bodies, including Congress, showed an increased interest in the issue. ...

Net neutrality found its way into Congress as legislators were asked to decide whether telecommunications giants could charge extra for enhanced services or had to treat all Internet traffic as equal. ...

Google (GOOG) bought YouTube for $1.65 billion in a power play against established mass-media models.

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