Top 10 IT stories of 2003

2003 offered some respite from megamergers, corporate scandals and the boom-and-bust cycle, but 64-bit computing, worms and spam...

After a three-year roller-coaster ride, 2003 seemed to provide some respite from megamergers, monopoly-busting, history-making corporate scandals, and the exhilarating but scary boom-and-bust cycle.

However, IT managers were kept on their toes by continual assault from a variety of nasty worms, handled user demands for wireless access and figured out how to work 64-bit computing technology into their systems.

IT issues spilled into the public domain as politicians around the world grappled with spam and the challenges created by offshore outsourcing. Home users saw an increasing number of consumer electronics products aimed at them from vendors who had once focused solely on the computer market.

Meanwhile, everyone is still waiting for economic recovery. As the year wanes, there are signs of a pickup that might fuel IT spending, and as usual, the pundits have plenty of ideas about what that spending will entail.

Here are the top 10 IT stories of the year, not necessarily in order of importance:

SCO rocks the Linux boat
Just when things appeared to be going well for Linux the world over, the SCO Group filed a lawsuit in March, charging IBM with misappropriation of trade secrets, Linux users saw that the move involved more than a contract dispute. SCO asserts that IBM took proprietary Unix code and put it into the open-source community. This muddies the legal waters for open-source software users, some of whom believe that SCO's terms could restrict Linux users' ability to redistribute source code.

Nevertheless, governments and local entrepreneurs around the world continue to develop new variations of Linux and promote open-source software as an alternative to Microsoft Windows. With such strong winds of change blowing, Linux is unlikely to suffer permanent damage from the SCO suit, but the legal wrangling will cause continued consternation in the open-source community.

Oracle, PeopleSoft, and JD Edwards
Legal battles also added to the drama of PeopleSoft's acquisition of rival enterprise resource planning software maker JD Edwards, and its subsequent fight to ward off a hostile $5.1bn takeover bid from Oracle.

With Oracle acting as spoiler of the JD Edwards deal, it got hit with several lawsuits by its takeover target. Adding spice to the affair was the war of words between Oracle's Larry Ellison and PeopleSoft's Greg Conway. In any case the fracas is a milestone. The fragmented ERP market has been due for a shake-out, and the Oracle-PeopleSoft bout may end up being just one in a series of merger and acquisition events leading to a new chapter in the business applications story.

Spam grows from annoyance to major political issue
This year, spam was one of the causes célèbres for politicians in both Europe and the US. In October, an "opt-in" directive came into effect for the 15 European Union member states. In the last few weeks of the year, the US Congress followed suit by sending an "opt-out" antispam bill to US president George W Bush, who has now signed it into law.

Squabbles over differences in approach gave way to agreement that unless some sort of antispam crackdown also occurs in Asia, purveyors of unsolicited e-mail will find a haven. Security experts agree. For now, they advise, users should not count on the law for protection, but use antispam filter software.

Offshore outsourcing: One worker's gain is another's loss
Stories about western companies outsourcing work to India have been reported for years. But this year it became apparent that Romania, Bulgaria, Russia, China, Ghana, the Philippines, and dozens of other countries are also clamouring for, and getting, business from the leading industrialised western countries.

The value of IT services provided to US businesses from offshore labour will double to $16bn next year and triple again to $46bn by 2007, IDC predicted. Forecasts such as this sparked fears that IT workers will face increasing competition, and prompted politicians and trade unions to raise the spectre of protectionism.

Legislators in several US states voted for anti-outsourcing bills. Now, with outsourcers moving up the IT value chain from offering basic coding labour to higher-value product design, this issue is likely to cause friction for years to come.

Slammer, and other worms, continue to attack the internet
The year had just begun when Slammer hit the internet, proving to be the fastest spreading worm to date. The good news is that most organisations that were affected said prompt reaction and new security technology prevented more widespread disruption.

The bad news is that security flaws in popular software are likely to allow malicious hackers to continue to plague users. Slammer took advantage of a flaw in Microsoft SQL Server 2000, while Blaster, a worm surfacing in August, infected machines running Windows XP and Windows 2000.

Experts estimated that there were about 80 more software flaws found in 2003 than in 2002. As long as such flaws exist, users will have to deal with corrupted hard drives and network slowdowns.

The Wi-Fi revolution: Coming to a coffee shop near you
While Wi-Fi hotspots had already started to spring up in public spots around the world last year, it wasn't until this year that you could pretty much count on finding a hotspot in multiple coffee shops throughout most of the globe's major cities. When you can access the internet via Wi-Fi while sipping an espresso, you know a consumer trend has arrived.

Intel's Centrino chip package, tailored for mobile computing applications, helped fuel interest in wireless computing. Meanwhile, new specifications such as 8011.g, combined with new smart antenna technology, will work to boost Wi-Fi range and signal strength and, undoubtedly, serve to further fuel the wireless revolution.

AMD pushes 64-bit computing into prime time
While not as mainstream as Wi-Fi, low-cost 64-bit computing took a step toward prime time in 2003. Advanced Micro Devices played a key role in lighting a fire under the market for 64-bit computing, launching in April the Opteron chip and in September the Athlon64 processor.

Since the chips run both 32- and 64-bit applications, AMD hopes to be rewarded by helping customers hedge their investments in old technology and ease the transition to new applications. Although desktop users will still have to wait for many applications as well as a 64-bit version of Windows not expected until the second half of 2004, the stage is set for the average user to get the benefits of faster video encoding, better performance on complex applications such as computer-aided design, and a richer gaming environment.

PC companies see the future, and it's the consumer
When developed countries are saturated with PCs and developing countries don't have the economic muscle to energise a maturing market, what's a computer manufacturer to do? The answer appears to be convergence among consumer electronics, communications and computer technology. It has come to fruition this year as IT suppliers plunge into the manufacture of televisions, music players and hand-held communications devices.

Although Apple offered the iPod music player in 2001, and Japanese companies have for years offered both PCs and consumer devices, this year marked a new epoch for traditional PC manufacturers. The likes of Dell offered LCD televisions,  Hewlett-Packard offered digital cameras, and Gateway offered a range of consumer electronics devices, including Microsoft's Xbox game console and home theatre systems.

The PC market shows signs of life
Even though the consumer electronics arena holds out promise for hardware manufacturers, their fate for the time being rests in their traditional market and, after lying moribund for a year or so, PC shipments by the end of 2003 were forecast to grow more than 11% for the year.

That rate would mark double-digit growth for the first time since 2000. Although signs of a pickup first emerged in Asia-Pacific and from the consumer side, it was an expected surge in business spending in the US that helped push the forecasts up above 10%.

Analysts are also starting to predict double-digit growth for 2004. All this bodes well for the chip industry, and by the end of the year various analysts were estimating global semiconductor revenue to grow by around 17% in 2003 and anywhere from 19% to 26% in 2004.

The search for the Next Big Thing
By the end of the year, rosy predictions for hardware joined upbeat economic news, including the Dow Jones Industrial Average closing above 10,000 for the first time in 18 months, and moves by the Nasdaq stock exchange to bring more technology stocks into its Nasdaq 100, as the index rose by more than 40% from 2002 levels.

This gave a lift to the end of 2003, which in a sense was the year of the tech story that wasn't: Forecasts for an upturn in 2002 had been dashed, and this had a dampening effect on the usual hype surrounding new products. Now, industry watchers are starting to talk up technology that made news this year, but that might need a more robust buying climate to really take off.

Look out for a resurgence in spending  - IDC forecasts overall IT spending to grow between 6% and 8% in 2004, and for trends including the increasing use of utility, or "on-demand" computing resources, and increasing corporate use of low-cost commodity computing systems that incorporate Intel chips and Linux.

Marc Ferranti writes for IDG News Service

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