A look back at a tumultuous year in IT

Hurricanes, acquisitions, data security breaches kept IT staffs busy

E-mail outbreaks of destructive Sober worm variants, a string of highly publicized corporate data losses and thefts, and the technological aftereffects of Hurricane Katrina nearly stretched the world of IT to its limits in 2005.

But there was more.

The acquisition mania of the last several years continued as Oracle Corp. went on a buying spree, several large telecommunications companies swallowed up key rivals, and Sun Microsystems Inc. expanded its reach by acquiring storage vendor Storage Technology Corp.

Some high-profile IT personalities made headlines this year, most notably Carly Fiorina, who was ousted as CEO of Hewlett-Packard Co.

Here's a look at some of the high-impact events in IT during the last 12 months, as selected by the staff of Computerworld:

Hurricane Katrina

The mammoth storm that hit the coasts of Louisiana, Mississippi and Alabama in late August, bringing destructive winds of more than 150 mph and ravaging New Orleans and other Gulf Coast communities with massive flooding, was just the start of an ongoing IT nightmare. Today, four months later, the recovery is still just beginning. During the storm, IT workers in hotels in downtown New Orleans reacted on the fly as the storm lashed the city. They saved critical corporate data and jury-rigged high-speed Internet connections in hotel ballrooms, allowing stranded guests to communicate with the outside world -- until the power went out (see "IT staffers at Starwood hotels begin the road back after Katrina").

Security Breaches

Corporate data security and consumer privacy made headlines in 2005. With unnerving regularity, large financial institutions such as Bank of America Corp., credit and personal information vendors such as ChoicePoint Inc., and online investment brokerages like Ameritrade Inc., reported data thefts or losses or infiltrations by hackers that affected thousands of clients and records. Credit card vendors, including MasterCard International Inc., were also hit by hackers. In an incident in June, an intruder was potentially able to access 40 million credit card numbers by infiltrating the network of a company that processed payment data for MasterCard (see "Security breach may have exposed 40M credit cards").

Last week, ABN Amro Mortgage Group Inc. revealed plans to stop physically sending data tapes to its credit reporting bureaus after one of those tapes -- with the private information of more than 2 million customers on it -- went missing in November. The tape was found last week, but the company said it has been working since last spring on a system for encrypting its data and sending it over secure networks whenever possible, and it expects to complete that project in January.

The ongoing corporate security breaches have been so pervasive that the federal government is stepping in with proposed legislation that would force companies to publicly announce such incidents (see "Bill Requiring Notice of Breaches Goes Forward").

Sober Worm

The year was also big for new variants of the e-mail mass-mailing W32/Sober worm. In May, computer users were sent fake e-mails notifying them that someone obtained their account and password information, and some people in German-speaking nations received fake e-mails stating that they had won tickets to upcoming 2006 Soccer World Cup events. Last month, a new Sober variant disseminated bogus e-mails stating that recipients' Internet use had been recently monitored by the FBI, CIA or other government agencies and that they had accessed illegal Web sites (see "Update: FBI warns of fake e-mail scam").

The Fall of Fiorina

After six years at the helm of Hewlett-Packard Co., CEO and Chairman Carly Fiorina was fired in February over what the company called disagreements in strategy (see "Update: HP board ousts Fiorina"). Fiorina had survived a bruising shareholder battle over HP's purchase of Compaq Computer Corp. in May 2002 and had been under tough pressure to make the $21 billion deal pay off. In March, HP named former NCR Corp. CEO Mark Hurd to replace Fiorina.


While the Earth didn't actually shift on its axis, it may have seemed so to Apple Macintosh fanatics in June, when Apple Computer Inc. announced that it would move all of its computers over to Intel Corp. chips by 2007, abandoning its longtime use of PowerPC chips from IBM and Freescale Semiconductor Inc. Apple executives said the move was made to give the company a more flexible road map for the future, especially in providing more performance without eating up lots of electrical power.

Sun Buys StorageTek

Sun Microsystems Inc.'s $4.1 billion acquisition of Storage Technology Corp. in June may help reinvigorate Sun's image. For several years, Sun has been viewed by some as not offering the innovation of its main competitors. But with this move, analysts said, Sun made a statement that it was trying to tie its core server and Solaris operating system technologies into more integrated offerings, complete with deeper storage product lines and services. With the StorageTek purchase, Sun can now offer wider data management services to handle security, storage, privacy and regulatory compliance requirements while strengthening its reputation.

Oracle's Buying Spree

Sun wasn't the only company relying on acquisitions to reinvigorate its image this year. Oracle Corp. has been on an acquisition tear in an effort to remake itself as a global business applications powerhouse. The year started with the finalization of its $10.3 billion acquisition of PeopleSoft Inc.. In March, Oracle beat out SAP to acquire retail management software developer Retek Inc. , and in July it bought profit optimization software vendor ProfitLogic Inc. The shopping spree continued in September, when the company announced its planned $5.85 billion purchase of Siebel Systems Inc., and in October, Oracle bought Finnish open-source database technology developer Innobase OY, which builds an add-on storage engine for MySQL databases.

Sony's Software Nightmare

Sony BMG Music Entertainment created a public relations nightmare for itself earlier this year through the inclusion of anticopying software in millions of its music CDs by popular recording artists. Last month, the company announced an exchange program to allow buyers of the affected CDs to get new CDs without the Extended Copy Protection software, but by then, the Texas attorney general had sued the company for violating a new Texas antispyware law that went into effect Sept. 1.

Cisco and the Black Hat Conference

Cisco Systems Inc. experienced a PR fiasco of its own when it publicly battled a security researcher at July's Black Hat USA security conference over the researcher's presentation on alleged flaws in Cisco router code. The researcher, Michael Lynn, detailed a way to shut down a Cisco router by taking advantage of a known and already-patched flaw in the vendor's Internetworking Operating System software, even after Cisco compelled the conference organizers to destroy CDs that were being distributed and rip out more than 30 pages containing Lynn's slides from thousands of booklets with copies of the conference proceedings. Eventually, Cisco obtained a federal court injunction preventing Lynn from further spreading the information.

Telecom Mergers

Finally, blockbuster mergers also took place this year in the telecommunications industry. Verizon Communications Inc. agreed to acquire MCI Inc. in a February deal valued at $6.7 billion, and SBC Communications Inc. acquired AT&T Corp. in a $16 billion January deal that created the largest telecommunications carrier in the U.S. Both deals helped change the landscape in the telecommunications marketplace and left consumers with fewer choices.

Copyright © 2005 IDG Communications, Inc.

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