from PC World by Marc Ferranti, IDG News Service

The Great Recession cast a shadow on all sectors of the economy in 2009. IT fared better than most, however, and the slump did not curb the dynamic nature of the industry. Acquisitions among big vendors continued to reshape the market, operating-system wars extended to mobile battlefields, microblogging became a powerful source of real-time information, and the take-up of small, ‘Net-connected devices was stronger than ever. Here, in no particular order, is the IDG News Service’s pick of the top 10 technology stories of 2009.

Oracle (tries) to buy Sun: The big get bigger

Oracle’s April deal to buy Sun Microsystems for US$7.4 billion, reportedly outbidding IBM, has the potential to reshape the tech industry. It’s also a denouement for Sun, whose prescient “the network is the computer” tagline has been overshadowed by mounting losses as users take up commodity servers. In dollar terms the acquisition is smaller than Hewlett-Packard’s May acquisition of services giant EDS for $13.9 billion, but could be more of a game-changer because it gets one of the biggest software companies on the planet into the hardware game, zeroing in on the data center. Major players are trying to emulate IBM’s “one-stop shop” for software, hardware and services. Other notable acquisitions this year included HP’s November deal to buy networking company 3Com for $2.7 billion and Xerox’s September agreement to acquire services company ACS for $6.4 billion. The story is not over, though: The European Union is threatening to block the Sun deal, out of fear that Oracle could quash the budding open-source database market by crippling Sun’s MySQL.

Microsoft launches Windows 7 — we can all move on now

On Oct. 22, Microsoft CEO Steve Ballmer took the stage in downtown New York at the lead event for a somewhat — for the software giant — soft-edged launch for Windows 7. Ballmer presided over a day of speechmaking and sales promotions in cities worldwide. But the events were on the whole smaller than the usual major Microsoft launches. The scaled-back hoopla and the marketing mantra of “simplicity” fit Microsoft’s characterization of the new OS — above all, faster and more straightforward to use than its predecessor, Vista. That much-maligned OS was plagued by hardware compatibility problems, slow performance and annoying system alerts. The older Windows XP, as of the Win 7 launch, was still being used by more than 70 percent of computer users. Microsoft, no doubt happy to turn the page on an embarrassing chapter in its history, says Win 7 is being adopted faster than Vista.

Chrome OS: Emperor’s new clothes or paradigm shift?

Just about a month after the Win 7 launch, Microsoft’s archnemesis, Google, released its Chrome operating system to the open-source community. Google said Chrome, due out in about a year, will be faster, simpler and more secure than existing OSes. It probably will be, because it does a lot less than current operating systems. Chrome runs only Web-based applications and will not even be able to run applications built for Google’s own Android mobile OS. That, and the fact that peripherals for Chrome-based machines will have to comply with specific hardware reference designs, means that in no way can it be a replacement for current PC OSes. But that’s the point. Computer users are spending more time accessing Web services and applications. Not many PC owners are ready to throw out their hard drives, but take-up of small, ‘Net-centric devices will one day lead to a tipping point where the majority of users tap the Web for virtually all their computing needs.

Yahoo, Microsoft sign deal … and seal Yahoo’s search fate?

In the end, the two companies worked out something that was less than a marriage of convenience, but which nevertheless managed to fundamentally alter one of the legendary names in Internet search. A year-and-a-half after Microsoft made an unsolicited bid to buy Yahoo for $44.6 billion, kicking off a series of stormy, on-again-off-again talks, the two companies announced a search deal aimed at giving them leverage against Google. The companies agreed to a revenue-sharing deal calling for Microsoft’s Bing to run Yahoo’s search site and for Yahoo to sell premium search advertising services for both companies. This relegates the Yahoo search engine to the dustbin of also-rans, and puts pressure on Carol Bartz, who took the CEO reins from founder Jerry Yang, to build up Yahoo’s non-search technology and services to the point where they can sustain the company. Investors are still holding their breath — Yahoo shares are trading at half the $31 Microsoft offered almost two years ago.

Government 2.0: Obama administration includes tech in stimulus plans

Barack Obama took office with an agenda that included putting IT in the stimulus bill. In February, in the wake of Senate approval, the House of Representatives passed a stimulus package including $7.2 billion for broadband deployment, $17 billion for incentives to adopt electronic health records and $11 billion to hook up the electricity grid to the Internet. Obama, an avid BlackBerry user, had put tech, notably social networking and business intelligence, to work in his campaign. This year, the White House has deployed the Drupal open-source content management system, tapped YouTube for communications, and encouraged projects such as data.gov for data junkies and recovery.gov for the money-followers. The General Services Administration, meanwhile, is opening up a “cloud storefront.” In October, the Federal Communications Commission filed a notice of proposed rule-making on net neutrality rules, which would prohibit broadband providers from selectively blocking or slowing Web content. It already seems that one of Obama’s legacies will be the government’s activism in, and tighter embrace of, technology.

Jobs comes back, again

Apple’s comeback kid did it again — but this time, the hurdle Steve Jobs overcame concerned health. At the end of June, Jobs, a pancreatic cancer survivor, returned to work after taking a leave of absence in January, citing health issues. It was later revealed that Jobs received a liver transplant. Investors questioned Apple’s decision to hold back information on Jobs’ condition, and the controversy hit at the heart of a nagging question: What would Apple be without its co-founder’s business acumen and laserlike focus on design? After Apple ushered in the personal computer era with the Apple II and reinvented the PC with the Macintosh, the company’s proprietary-systems strategy headed for a dead end and Jobs was ousted. Apple’s fortunes languished. But after Jobs’ return in 1997, Apple launched a succession of hit products including the iPod, the iPhone and a revived Mac using Intel chips. Apple is again a driving force in IT, but while Jobs’ latest return has quieted the distress of Apple fans, issues about the company’s dependence on him linger.

The microblogging revolution: Twitter helps world follow Iranian protesters

Microblogging and social networking have been the butt of cynical jokes as entertainers like Oprah Winfrey jump on the Twitter bandwagon to solidify their celebrity. But Twitter, it turns out, can be a vehicle for much-needed real-time information. The re-election of Iranian President Mahmoud Ahmadinejad over challenger Mir Hussein Moussavi caused chaos in Iran. With Western journalists booted out of the country, in June local Twitter users stepped in, sending out a stream of Twitter messages that helped the world follow events as protesters marched. The U.S. State Department even asked Twitter to postpone a planned service outage. Twitter has also been used to broadcast information by eyewitnesses at many other news events this year. But with the good comes the potentially bad: Twitter in Iran also was used in denial-of-service attacks against key government officials.

E.U. slaps a fine on Intel, but the antitrust fight is far from over

Antitrust troubles for Intel had been brewing for a while when the European Commission fined the chip giant €1.06 billion (US$1.44 billion at the time) in May, citing damage to competition as a result of discounts the chip maker gave to partners. In 2008 the Korea Fair Trade Commission fined Intel about $25 million for abusing its dominant position in the processor market. Intel has been fighting the antitrust battle on many fronts. In November Intel and Advanced Micro Devices announced that they had settled all antitrust litigation and patent cross-license disputes. Intel also will pay AMD $1.25 billion. The fight is not over yet, though. The U.S. Federal Trade Commission is conducting an inquiry into Intel business practices, and in November New York Attorney General Andrew Cuomo filed a lawsuit charging that the company had conducted a “systematic campaign” of illegal conduct. No matter how the current cases end, antitrust scrutiny is reshaping the chip market. Intel has to rethink its strategy of discounts to its PC maker friends, and meanwhile, AMD has an extra billion dollars to help it mount further attacks on Intel’s market share.

Droid takes smartphone battle up a notch

In October, Verizon launched the Droid, a half-inch-thick contender for the smartphone crown. Sporting a 3.7-inch touch screen, a metal top and sliding keyboard, the device is the first serious contender to challenge the iPhone and the BlackBerry. Verizon is banking on Droid to counter AT&T’s iPhone offering, while Motorola — Droid’s manufacturer — is desperate for a hit product as memory of its Razr phone fades. The Droid is also a standard bearer for Google’s Android, an OS that looks like a force to be reckoned with in the phone and netbook market. Ultimately, the Droid launch was one of the emblematic tech events of the year, highlighting global adoption of small-form devices that connect to the ‘Net.

IT forecast: Clearing, with a chance of sun

The recession was a story for every sector this year, but tech occupies a special place in the recovery. At the beginning of December, IDC echoed other market research companies when it declared that IT will lead us out of the Great Recession. Global IT spending will increase by 3.2 percent in 2010, getting back to 2008′s pre-recession spending level of about $1.5 trillion, IDC said. Tech did not do as badly as had been feared. Gartner said worldwide chip revenue will hit $226 billion in 2009, down 11.4 percent from last year but better than the previous forecast, which called for a 17.1 percent decline. Meanwhile, IDC said global PC shipments in the third quarter rose 2.3 percent from the same quarter a year earlier, to 78.1 million units — the first quarter this year in which PC shipments increased compared to 2008. Until now though, revenue for most vendors has been below 2008 results. Until vendors start reporting results that exceed year-earlier figures, tech will not be out of the woods.

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by Eric Zeman

Over the weekend, Sprint and a number of other companies agreed to invest another $1.5 billion into Clearwire, the growing provider of WiMax services. Notably absent on the list of financiers was Google, which has previously given cash to Clearwire.

Clearwire needs more cash to continue building out and operating its slowly expanding WiMax network across the U.S. Sprint, its major investor, has announced that it will pony up a whopping $1 billion (despite the company’s recently reported quarterly loss). Other investors — including Comcast Corp., Intel Corp, Time Warner Cable Inc. and Bright House Networks LLC — are kicking in another $500 million between the lot of them.

Google has already given about $200 million to Clearwire, and apparently, Google thinks that’s enough (for now). Google recently said, “We have already made a significant financial investment, and at this point we think the best way we can continue to add value is through continued product and strategic cooperation,” in an email to Reuters.

In other words, Google is saying, “We’ll see what we can do to make some of the stuff we’ve already invested in available to Clearwire while we wait to see if this WiMax thing is really going to take off.”

According to The Wall Street Journal, Clearwire has about 511,000 subscribers sprinkled across the country. Keep in mind, Clearwire still has a fairly limited footprint, especially when compared to the existing 3G networks of Verizon Wireless, AT&T and even Sprint.

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by Michael Arrington

Last month Skype was in talks to acquire VoIP startup Gizmo5. It was a perfect backup plan in case all that IP litigation didn’t work out. Gizmo5′s SIP infrastructure could theoretically replace Skype’s proprietary P2P back end.

After the Skype settlement, though, Gizmo5′s strategic value to Skype sort of plummeted. In the meantime, Google bought them, say multiple sources with knowledge of the deal, for around $30 million in cash. The deal is done, say our sources, and will be announced shortly.

Gizmo5 is a good fit with a number of Google products. Google Talk allows voice calls between users but has no PSTN link to allow incoming or outbound calls to real phones. Gizmo5 does this well already.

And Google Voice is a great VoIP and phone identity service, but they have no endpoint for calls. Gizmo5, which by the way already integrates with Google Voice, is a soft phone end point for Google phone users. In other words, you will be able to make and receive calls to your Google Voice phone number from your computer.

This looks to me like Gizmo5 will be the glue that puts Google Voice and Google Talk together into a single product. And that product looks a lot like a Skype competitor.

Gizmo5, which was founded in April 2003, has raised $6 million to date, plus an unspecified amount from founder/CEO Michael Robertson. Prior to Gizmo5, Robertson gained notoriety with his founding of MP3.com and later MP3tunes (which has led to big music suing both the company and himself personally).

We’ve reached out to Gizmo5 and Google for comment.

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By Claudine Beaumont

Apple says that consumers may turn to Mac computers because Microsoft’s new operating system, Windows 7, is ‘complex and expensive’

The criticism comes from Brian Croll, vice president of Apple’s Mac OS X worldwide product marketing. He said that Microsoft users were tired of the “headaches” caused by the Windows operating system, and expects some disillusioned Windows users to switch to Apple’s Mac platform.

“Windows users are really tired of all the headaches that they’ve been getting over the years, starting all the way back from Windows Me to NT to Vista and now Windows 7,” he said. “As a result, I think people are looking for something different, and the Mac offers real ease of use, stability and security.”

Apple recently announced its best ever quarter for Mac computer sales, and Mr Croll said there’s “a lot of momentum” behind the platform.

He said the difficulty some users will experience upgrading from Windows XP to Windows 7 – which involves a clean install of the entire PC – will prompt them to simply buy a new computer, and he believes a significant number will opt for a Mac.

“We think this is an opportune time for people to take a look at a Mac. We believe we can get even more people moving over.

“Windows 7 is still just Windows. It doesn’t change a lot. It’s still complex, it’s still really expensive when you look at the cost of the upgrade, and there’s still security concerns,” he said.

“It also still requires a lot of assembly. It turns out when you get Windows 7 it doesn’t even have some of the basic applications like mail or chat, or programs to manage your photos. You actually have to go and find them and download them.

“For the consumer, there’s a lot of headache and annoyance built in to Windows 7. It’s built on a lot of antiquated technology… that doesn’t change from release to release. We think that most people probably aren’t going to make that jump [from Windows XP to Windows 7], and as a result, are going to be looking for new computers.”

Mr Croll did not comment on whether Apple intended to run any special offers or advertising campaigns to tempt Windows users away from Microsoft.

Despite Mac computers costing substantially more than some PCs running Windows, Mr Croll said Apple’s computers still represented “great value for money”.

He also denied claims from some critics that Apple had launched its most recent operating system, Snow Leopard, before it was ready.

Scores of Mac users have reported compatibility issues between Snow Leopard and other software, and Apple itself had to confirm that a bug in the software was wiping crucial files, folders, music and data from some users’ computers.

“Occasionally, there are some issues that people find, but they’ve been extremely rare for a new release,” he said.

Microsoft has high hopes for Windows 7, the successor to the much-maligned Windows Vista. The new operating system is designed to make it easier for users to share files, photos and music between computers at home, offers better support for touch-screen devices, and will enable users to browse the internet more safely.

“Windows 7 is more than just a collection of new features,” said Ashley Highfield, a senior Microsoft executive. “It’s a pivotal turning point in Microsoft’s history.”

He said that Microsoft had listened to the needs of users, and worked hard to produce a simpler, more efficient operating system.

“We want to be the glue that binds your digital life together,” he said.

PC World has reported strong first day sales of Windows 7, with demand for the new software outstripping similar early demand for Windows Vista, which was released in 2007.

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