If put to a vote, 2000 would have to be considered the most interesting, if not the most eventful, year of technology ever. Internet security, B2B vs. B2C and the Napster revolution moved computing news off the technology pages and onto the front pages of most news outlets. And you wont find any dimpled, hanging, bulging or pregnant chads to dispute that the business of technology is now everyones business. In the following pages, eWeek News, eBizStrategies and Labs analysts look back at the year it was.
1: Security, What Security?
The nightmare started in February and still isnt over. A series of denial-of-service attacks from unknown hackers swamped the largest sites on the Web and demonstrated just how vulnerable we are. In May, the ILove- You virus exploited serious holes in Microsoft Corp.s Outlook client, causing corporations all over the world to shut down their e-mail systems. As the year wore on, more and more corporate hacks were being publicized, and experts were hinting at the great number that didnt get reported. Then, near the end of the year, hack-tivists targeted OPEC and Israeli government sites and, of course, Microsoft, a corporate attack that demonstrated a new level of sophistication. Most ominous of all, not many people are predicting 2001 will be any better. The culprits in 2000, after the hackers, were application and security vendors that left holes in their software, as well as IT managers who left holes in their networks. As a result, services have become a major part of any comprehensive security plan.
2: In Microsoft We (Anti)Trust
In a series of landmark decisions, Judge Thomas Penfield Jackson in April found Microsoft guilty of anti-competitive practices, then in June ordered the company to be split in two. But since then, the story has fallen off the screen as court proceedings promise to push the case into 2001 and beyond. Microsoft itself is conducting business as usual, but one wonders how the brain drain in Redmond this year, including the departures of Windows architects Jim Allchin and Paul Maritz, may affect the company.
Similarly, the $109 billion America Online Inc.-Time Warner Inc. deal created a lot of news in usually dull January, with speculation that the merger would create the next monopoly. But since then, regulators have scrutinized the pairing into obscurity. The deal was finally approved by the Federal Trade Commission Dec. 14.
3: Napster Nation
Label this one "Its the end of the music industry as we know it (and I feel fine)" or "The song no longer remains the same." What began as a simple, but perhaps not so innocent, software program to enable users to share MP3 music files knocked a multibillion-dollar industry on its ear, generated millions of new fans and created a new acronym: P2P, or peer-to-peer computing. Napster Inc. has so far avoided a court-ordered shutdown for copyright violation, but such a shutdown seems inevitable. And its deal with BMG Entertainment last month wont necessarily enable the site to keep up with competitors like MP3.com Inc., which has more deals than Napster with record labels; or with other file-sharing programs, like Gnutella, that avoid Napsters server-centric model.
We all knew it was going to happen. We just didnt know it would happen so soon or so quickly. Sparked by the Microsoft guilty verdict in April, tech stocks started a sharp and unyielding decline. Once-flush startups were soon burning through cash just to survive, and planned initial public offerings got put on the back burner. As the holiday season approached, Amazon.com Inc. was under pressure for the first time in its brief history to turn a profit and prove to the world that it can be a viable business.
5: At Your Service
With too little software and IT expertise chasing too many e-business problems, its not surprising that services of all kinds became a primary focus of IT providers, from CEOs down to departmental managers.
Everything that was once available as a piece of software is now available as a service, from enterprise applications to intrusion detection to word processing, although the latter has not been especially successful for Microsoft.
The big systems integrators were the biggest winners. The U.S. Department of the Navys $6.9 billion contract award to Electronic Data Systems Corp. in October is the largest government outsourcing award to date and is unique in its coverage of networked desktops. However, a large crop of "boutique" consultants, such as MarchFirst and Organic, found the high seas of e-business too rough for their liking and ended 2000 on a downer.
6: Linux Yes, Microsoft .Not
Despite growing pains, Linux and other open-source software programs quietly proved to be serious contenders for enterprise applications, and by years end Linus Torvalds was about to release the 2.4 kernel for his Unix cousin, opening the door for the next generation of Linux apps. Meanwhile, the latest "bet the company" strategy from Microsoft only taxed the patience of developers, users and IT managers. Conventional wisdom said not to wait for Microsofts vaporware platform for Web services because by the time the whole thing is done, the rest of the computing world will have moved on to the next big thing. The foundation of the strategy, Windows 2000, has yet to really catch on among users. However, by moving Steve Ballmer into the CEO spot and assuming the new role of chief software architect in January, Bill Gates enabled himself to focus entirely on developing and, more important, marketing .Net. And as we have learned over the past 25 years, dont underestimate Bill Gates.
7: Taking Stock
Dell Computer Corp., Gateway Inc., Apple Computer Inc. and Compaq Computer Corp. investors have fallen out of love with this once-powerful lineup of hardware makers, with each ones stock price sinking into the teens by the end of the year. But they werent alone; even Hewlett-Packard Co.s stock price dove severely last month, while Intel Corp.s dropped precipitously earlier in the fall. What gives? Perhaps the success of the PC makers over the past decade has caught up with them in the form of an oversaturated market. In addition, cell phones, PDAs (personal digital assistants) and pagers are now serious challengers to the PC as an Internet-access device. Personal computing may not be dead, but the PC as weve known it is near the end of the line.
8: Wireless Static
Has a technology ever been so poised to explode and yet remained so far away from reality? Wireless is everywhere, from your cell phones, PDAs and pagers to your enterprise and instant-messaging applications. But much work remains to be done in standardizing network protocols, creating useful enterprise applications and syncing the considerable technological advancements of wireless devices with the needs of users.
9: The Rise and Fall of B2B
One year ago, business-to-business e-commerce was about to explode. Exchanges and other types of e-marketplaces were supposed to lead us all into a new land of opportunity. In February, the Big Three automakers formed Covisint LLC, a marketplace alliance with Commerce One Inc. and Oracle Corp., igniting dozens of similar launches. But like their business-to-consumer counterparts, many B2B exchanges, giddy despite their weak foundations with the promise of applying disintermediation to entire industries, quickly collapsed. This months shutdown of two Ventro Corp. exchanges, Chemdex and Promedix, warned exchanges that are still around of the need to improve alliances and business models next year.
10: What Y2K Crisis?
Now for the good news. New Years Eve came off without a hitch, making the biggest story of 1999 the biggest nonstory of 2000. If anything Y2K served a purpose in getting IT to clean up its back offices and replace old code and aging servers, paving the way for enterprises to build for the furutre that is now upon us as the real 21st century begins.