ITs Tumultuous Year in Review

Analysis: eWEEK editors offer their take on the top stories that shaped 2005, including Hurricane Katrina's wave of destruction and Google's efforts to woo the enterprise.

If 2004 was the year of merger mania, then 2005 will be remembered as the year a great many things were rent asunder.

Mired in a bogged-down technology economy, the industry continued to struggle for purchase, and so began the year with major executive shake-ups that would eventually rock the corner offices of Hewlett-Packard Co., PalmSource Inc. and Siebel Systems Inc.

But by far the greatest upheaval was felt in August, when Hurricane Katrina tore the heart out of the Gulf Coast and tested backup, recovery and communications systems to their very limit. Even as we move into 2006, the cleanup goes on, and the damage estimates—and the death toll—continue to rise.

/zimages/6/28571.gifClick here to read about how Hurricane Katrina served as the ultimate testing ground for IT disaster recovery.

In the rest of the war-weary nation, IT professionals continued to battle security threats and manage compliance requirements even as more and more of their jobs were shipped overseas in the persistent trend toward outsourcing. Despite the forces of God and man, we spent 2005 trying to hold it all together. Here now is eWEEKs take on the top stories that shaped 2005.

Wave of destruction

Massive and deadly, Hurricane Katrina dealt Florida a glancing blow on Aug. 25 before heading into the Gulf of Mexico and targeting New Orleans. To date, the storm is blamed for taking 1,400 lives—the third-deadliest storm in U.S. history—and is expected to cost upward of $300 billion, making it, by far, the most expensive hurricane ever.

The storm was a sobering lesson in business continuity plans, many of which wilted when data was saved and servers were mirrored but buildings and people were swept away. Still, those businesses that planned better—and got a bit of luck—fared better relatively.

The lasting damage of Katrina is evident in the communications infrastructure as well. Some 3 million telephone lines in Louisiana, Mississippi and Alabama were knocked out by the storm, which caused severe damage to cables, terminals, poles and wireless facilities. More than 1,000 cell phone sites had to be restored.

Nearly four months after Katrina, much of New Orleans, including extensive parts of Orleans Parish and St. Bernard Parish, remain without telephone and Internet service, although services to the French Quarter and Central Business District are back up. Late last month, in a show of resilience, the mayor of New Orleans announced that the city will deploy and operate its own wireless Internet system, which will be free for all users.

Packing it in

The year began with restructuring at HP when CEO Carly Fiorina united the vendors printing and PC units in January, despite persistent calls from analysts for HP to spin off its lucrative printing business. It would turn out to be her last significant official act.

In February, Fiorina was ousted by HPs board of directors after several quarters of inconsistent financial results. Though the directors said they agreed with Fiorinas overall strategy, they no longer were confident she was the right person to carry it out.

/zimages/6/28571.gifRead more here about HPs massive restructuring.

In March, the HP board surprised many in the industry by bringing in a relative unknown, NCR Corp.s CEO and president, Mark Hurd. In his first nine months with the company, Hurd has focused as much energy on getting HPs house in order as he has with bringing out new products and technologies. In July, Hurd, saying he was looking for "a simpler and nimbler HP," announced a massive restructuring that included 14,500 job cuts and a redistribution of the global sales force.

HP wasnt alone this year in shaking up its executive ranks. David Nagel, a beloved veteran of the handheld industry, was forced out as president, CEO and director of Palm operating system maker PalmSource Inc. in May, shortly before the company was sold to Access Co. Ltd., of Tokyo.

The story was similar at Siebel, where CEO Mike Lawrie was shown the door in April, just five months before the CRM (customer relationship management) software maker was purchased by Oracle Corp.


Spam was the menace in 2004, but in security circles, 2005 will be remembered as the year of the data breach. Prodded by new legislation in California and other states, companies from LexisNexis to ChoicePoint Inc. to Bank of America N.A. were forced to go public with news of massive data breaches. The scandals turned obscure payment companies such as Atlanta-based CardSystems Inc., which coughed up data on approximately 200,000 credit card accounts, into household names.

The lapses also shone a light on an ugly problem that many experts believe has been hidden from public view for years: porous corporate and public-sector networks that are brimming with sensitive information on ordinary citizens.

Coupled with reports of a burgeoning online market for stolen identities and compromised computers, the data breaches recast the problem facing most companies. Long focused on the threat posed by bored teenagers and misanthropes who write and release worms and viruses, enterprise IT managers must now contend with organized, well-funded criminal groups determined to attract little attention and cause little noticeable damage while netting maximum profit.

Government is trying to do its part. In the U.S. Senate, committees approved two bills, the Personal Data Privacy and Security Act and the Identity Theft Protection Act, while a third committee was expected to take up a separate bill of its own. More than a dozen similar measures have been introduced in the House.

Next Page: Multicore madness, mergers, Googles greatness and more in 2005.