The year when the big got even bigger

Multi-billion dollar buy outs dominated the landscape as IT’s big hitters flexed their muscles — and consolidated

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By  Peter Branton Published  December 26, 2005

|~|intelceobody.jpg|~|Craig Barrett, in one of his final duties as Intel CEO, paid a visit to Saudi Arabia. |~|The problem for anyone attempting to write an end-of-year review in just about any field is that events don’t tend to fall as neatly into the calendar as we would like. So for IT hacks, 2004 could be fairly described as the year that big-money mergers made it back on the IT agenda, after several years’ hiatus. Security firm Symantec bought disaster recovery outfit Veritas, while Oracle finally snapped up rival PeopleSoft (which had of course already bought another rival, JD Edwards, just previously). Unfortunately, neither of these events was actually completed until earlier this year. Perhaps even worse, it is still arguably too early to say just exactly how effective either has been. Security firm Symantec has spent most of the year trying to convince customers (and big-money investors) that its purchase of a disaster recovery firm makes perfect sense because the two are all part of the same thing: business continuity. Customers seem to have reacting cautiously and Symantec has seen its share price slump since the merger was announced. For its part, Oracle revealed that it had a clear roadmap for integrating the PeopleSoft and JD Edwards product lines with its Fusion plans. It then announced yet another multi-billion dollar deal, buying customer relationship management (CRM) rival Siebel, for US$5.85 billion in September this year. The Siebel product lines are now to be integrated into Fusion, Oracle has said, but since the firm is not ruling out other big-money deals, it remains to be seen just how it will fit them all together. So, having dismissed two of 2004’s big stories, what can we say about 2005? It was the year that saw “blog” and “wiki” become commonly used words, the year that saw Google become arguably the tech industry’s hottest firm, and yes, it was a year where we saw a lot more mergers. Add in a few major virus outbreaks and some decidedly criminal activity, and we can say with some certainty that 2005 was a big year for the IT industry. While IT may not have made centre-stage in the same way that it did in its late-90s Economy hey-day, the industry is now very definitely back on the mainstream business agenda and — as befitting a more mature industry — is likely to stay that way this time round. While 2005 has been a big year for the IT industry globally, it has also been an important year for the Middle East’s IT industry, if only in how we are perceived by international vendors. One of the common complaints that we IT journalists here in the region are wont to make is that the top execs from IT firms don’t tend to visit here. That certainly wasn’t the case this year with both halves of the Wintel alliance sending their most senior executives to the region. For Microsoft, both CEO Steve Ballmer and chairman Bill Gates made trips to the region: Ballmer came to Dubai in April this year for the Government Leaders Forum and his colleague Gates made not one but two trips, taking in Egypt and Jordan this year. Intel also wheeled out the big guns, with CEO Craig Barrett coming to Dubai in March, in one of his last engagements in that post. He revealed then that part of his new role as chairman at Intel would include keeping a watching eye on the emerging markets.||**|||~|steveBbody.jpg|~|It was the year when Steve Ballmer allegedly lost his cool. |~|And he proved true to his word by visiting Saudi Arabia in November, to announce an ambitious scheme to make Riyadh a wireless city, as well as the provisioning of up to US$150 million in investment in technology firms in the region. These high-profile visits really were just the tip of the iceberg, with such luminaries as Bruce Claflin, CEO of 3Com and Yang Yuanqing, chairman of Lenovo, also making visits to the region, along with a host of other c-level executives from some of the biggest IT companies in the world appearing here. Some execs won’t be appearing here of course. Unquestionably the biggest IT departure of the year was the exit of Carly Fiorina from her role as CEO of HP in February this year. Fiorina, the most high-profile businesswoman in the world paid the price for failing to deliver the results promised when she committed HP in 2001 to its merger with Compaq. That merger was completed in 2002, and sceptics are still to be convinced that it was a success: Fiorina’s replacement — Mark Hurd — has been repeatedly called upon to undo some of its works. See what we mean about events not falling neatly into single year patterns? If other CEOs kept their jobs in 2005, they didn’t always keep their cool: Ballmer is alleged to have lost his very badly when a senior engineer at Microsoft announced he was leaving to join Google. He was said to have picked up a chair and thrown it across the room, while threatening to “f*****g kill Google”, according to a sworn statement from the engineer in question (it should be noted, that Ballmer later denied he had ever thrown furniture). That statement was made as part of an ongoing court case between Microsoft and Google over the departure of another Microsoft engineer, Kai-Fu Lee, to the search engine giant. The court case revealed just how rattled by Google Microsoft was: in a series of memos released by Microsoft senior executives last month, the firm acknowledged that Google has stolen a march on it in several critical areas, most notably of course being search. Microsoft has come back from major threats before of course – the memos released last month consciously harked back to Gates’ famous ‘Internet Tidal Wave’ of a decade ago — but it very definitely remains to be seen how it will cope with this one. The big story of 2005 may just take another few years before it reveals itself fully. ||**||Security threats|~|PHbody.jpg|~|Paris Hilton fell victim to identity theft.|~|Earlier this year one of the biggest security threats facing IT managers worldwide was Paris Hilton: the ‘Simple Life’ star became in February the latest female celebrity to be used by virus writers to snare unwary internet users. The Ahker worm was hidden in an attachment that was purportedly an “adult” video of the hotel heiress; once opened it disabled some applications and could prevent access to certain web sites. Actually, Ms Ritchie’s sometimes best friend was also a victim of a security breach this year, when some of the contents of her cell phone — including personal pictures and phone numbers of friends — was published online. Paris Hilton therefore managed to sum up a couple of the biggest trends of 2005: the increased activities of virus and worm writers and the growing dangers of identity theft. In June for instance, the world’s biggest bank, Citigroup, suffered the world’s biggest data loss, with nearly four million customer records being mislaid. While not every case of missing customer records translates into a criminal act, plenty do: the US Federal Trade Commision estimated that as many as 10 million people worldwide were the victims of identity theft in 2003, and the trend has, if anything, increased since then. Encompassing both these trends was another, extremely alarming, development: namely, the growing trend towards IT security issues being criminal acts. Cases of “phishing”—where criminals attempt to gain user’s personal information by sending out fake e-mails — increased around the globe, and the term became commonplace. Banks and financial institutio- ns have come under increasing attack from criminals inthe past 12 months, security experts warn. The Middle East has not, unfortunately, escaped such activity, with a number of banks this year admitting they had been attacked by cybercriminals. Earlier this year, Mashreqbank suspended some of its online banking services citing the threat of hacker activity, while the National Bank of Dubai (NBD) also said it had seen evidence of hacking attacks. More recently, the National Bank of Abu Dhabi (NBAD) said it had seen evidence of phishing attacks, with phishers e-mailing some of its customers and attempting to get them to register their details on a bogus web site. Security experts in the region point out that this evidence of increased cyber-crime activity here is a natural by-product of the Middle East’s expansion. So, sadly it looks like we can expect to see a lot more of the same in 2006. ||**||

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