The 10 Biggest Software Stories Of 201210:00 AM EST Tue. Dec. 11, 2012
From major product introductions like Microsoft's Windows 8 to major embarrassments like Apple's botched mobile map application and Hewlett-Packard's Autonomy debacle, 2012 was a busy year in the software industry.
The industry continued to undergo some major transformations with the shift away from on-premise software to cloud computing and the explosion of new software technologies to handle "big data." And some major players in the IT industry took big steps to increase their software footprint -- Dell's $2.4-billion acquisition of Quest Software being the prime example.
Here's a look at 10 of biggest software stories of 2012.
When Apple rolled out iOS 6 in September, it bragged about the 200-plus new features in the iPad and iPhone operating system upgrade. But most will remember just one feature: the new map application Apple developed to replace Google Maps.
Within a week it became clear the new map application was a disaster. Users complained about inaccurate directions, wrong location data and downright bizarre glitches. A little more than a week after iOS 6 debuted Apple CEO Tim Cook issued an apology for the problems. By then Richard Williamson, the manager in charge of developing the map application, and Scott Forstall, Apple's iOS software chief, were no longer with the company.
While the fiasco might seem minor compared to other IT vendor screw-ups (see Hewlett-Packard and Autonomy), it came at a time when Apple was on a roll and seemingly could do no wrong. Was it a one-time stumble or a hint of what's to come from a post-Steve Jobs Apple?
Despite competing in a tough market with such giants as SAP, Oracle and Microsoft, Sage North America has remained a player in the market for business applications for SMBs and a key vendor for many application solution providers. But, it's been a difficult year for the company and its channel partners.
The problems began last year when the company announced plans to rebrand some of its products, a move that upset many partners who were heavily invested in older brands such as MAS 200 and 500. Earlier this year came a new subscription pricing plan and changes to perpetual license prices that angered some partners. And at the annual partner conference in August, the company announced plans to phase out some aging products.
All this has created trepidation among the company's resellers, and some have been signing up with other application vendors such as NetSuite, SugarCRM and Microsoft.
The software industry's rife with bitter rivalries, but none were more heated than the competition between Microsoft and VMware. While VMware has long been the king of virtualization, Microsoft's been fighting back with its Hyper-V technology built into Windows Server. Throughout 2012 the two vendors frequently engaged in claims and counter-claims to have the most cost-effective virtualization technology. Microsoft, for example, launched a VMware Costs More campaign early on, while VMware frequently fired back at Microsoft's competitive "trash talking." Microsoft is generally seen as having gained ground with the new Hyper-V technology in its Windows Server 2012 release, which offered expanded support for processors, memory and active virtual machines per host. VMware, in contrast, spent part of the year on defense after it took a lot of heat for its proposed vRAM licensing plan for vSphere 5 that customers said would boost virtualization costs. In August VMware backed off and dropped the plan in what was seen as an effort to stay cost-competitive with Microsoft.
Cloud computing's been on everyone's radar for several years, and it's long-since jumped the chasm from industry buzzword to real technology and deployments. But 2012, a year in which Forrester Research predicts cloud IT sales to hit $61 billion, may well be remembered as the year cloud computing software and services truly went mainstream.
Certainly IT vendors put big bucks behind their cloud efforts. SAP completed its $3.4 billion acquisition of SuccessFactors, while Oracle shelled out $1.9 billion for Taleo. Cloud service companies like Amazon Web Services and Rackspace became increasingly attractive alternatives to on-premise IT systems. And customers seemed more comfortable with the cloud concept: The Environmental Protection Agency jettisoned IBM Lotus Notes in favor of Microsoft's Office 365 cloud applications for 25,000 workers under a $9.8 million contract. Vendors, meanwhile, stepped up their efforts to enlist solution providers in cloud computing. Microsoft was among the most aggressive, launching a number of programs to help solution providers develop cloud-computing practices.
Some of the nastiest patent battles in 2012 were between mobile device makers, with Apple's lawsuit against Samsung drawing the most attention. But, it was hardly peaceful on the patent front in the software industry.
Oracle's suit against Google claiming infringement of its Java patents was the most visible case in 2012. While Oracle had sought up to $1 billion in damages, a jury concluded after a testy trial that Google's use of Java application programming interfaces in Android did not infringe Oracle's patents.
Other vendors focused on arming themselves for future patent battles. Microsoft paid $1 billion in May to buy 800 AOL patents, while Google acquired some 200 patents from IBM for an undisclosed sum in January.
"Big data" went from early-adopter buzzword to full-blown industry trend -- or even an entire industry by itself -- in 2012, judging by the number of big data products that spilled out of startups and established IT vendors alike. Big data conferences packed 'em in, and industry pundits made, um, big forecasts -- such as Gartner's calculation that big data would drive $28 billion of IT spending in 2012. Hype aside, the exploding volume of information stored in the world's IT systems reached an estimated 2.7 zettabytes (or 2.7 billion terabytes) in 2012, and the need for technology to collect, store, manage and analyze all that information is very real. Big data startups like Datameer, Hortonworks, Karmasphere, Mortar Data, Qubole, Splunk and Zettaset were industry darlings while just about every established vendor jumped on the bandwagon. IBM, for example, acquired Vivisimo and its technology for accessing and analyzing big data spread across multiple repositories. Oracle put marketing muscle behind its big data Appliance (which debuted in Oct. 2011). And SAP bet heavily that its HANA in-memory database would be a hit with customers wrestling with big data challenges.
Although Salesforce released Chatter in 2010, it seemed like 2012 brought social media to the fore, with a number of IT vendors scrambling to jump on the bandwagon -- sometimes paying big bucks to do so. Microsoft's $1.2 billion acquisition of Yammer and its cloud-based social networking software for businesses was perhaps the most conspicuous move. SAP launched its Jam employee collaboration application, while Salesforce unveiled plans for its upcoming Salesforce Communities that will connect employees, customers and partners in a single network. Some acquisitions focused on tools for making better use of social networks for marketing purpose, including Oracle's buyout of Collective Intellect and Vitrue, and Salesforce's acquisition of Buddy Media (for $689 million). Others, including IBM's $1.3 billion acquisition of Kenexa, focused on using social networks for employee recruitment. "The social revolution is going on right now, and it is unlike anything we've experienced before," Salesforce CEO Marc Benioff (pictured) said in a Dreamforce keynote. "Business is social. Social networking is the fastest growing segment of the industry."
Dell started out in PCs, later moving into server and storage hardware. But 2012 was the year the company really got serious about adding software to its product lineup and becoming a full IT technology and service provider.
While the company has made a number of software and cloud technology acquisitions in recent year, Dell took a major step in February when it created a separate software group and hired ex-CA Technologies CEO John Swainson (pictured) to run it. That was quickly followed by the company's acquisition of SonicWall, a developer of network security and data protection software. But the real leap came later in the year when it bought Quest Software, a supplier of security, storage and application management software, for $2.4 billion.
Early in 2012, CEO Michael Dell declared: "Dell is not a PC company." Competitors should have listened ...
It must have seemed like a good idea at the time: Acquire a company with a broad information management applications portfolio to expand HP's software offerings. But HP's $11.1 billion acquisition of Autonomy turned into an embarrassing fiasco. The first hints of trouble came in May when Autonomy co-founder and CEO Mike Lynch (pictured) was fired when Autonomy returned what HP CEO Meg Whitman described as "disappointing" financial results. Then channel partners complained they didn't have access to Autonomy products. But the real extent of the mess came to light last month when HP took an $8.8 billion write-down for "serious accounting improprieties" and "disclosure failures" that it said inflated Autonomy's price tag. There's some serious finger-pointing going on between Whitman, Lynch, HP's board of directors, former HP CEO Leo Apotheker, former HP strategy executive Shane Robinson, accounting firms Deloitte and KPMG, and other parties. A shareholder lawsuit has been filed. And all the while HP channel partners and customers can only watch from the sidelines and shake their heads.
Its debut was almost anti-climactic. After more than a year of previews, blog posts, developer conferences, and feature and price announcements, Microsoft launched the next generation of its flagship product in a relatively low-key press event in New York on Oct. 25. The product hit store shelves the next day. Microsoft has struggled to regain its competitive edge in a world where smartphones and tablets are eroding the importance of desktop PCs -- the market Microsoft dominated for years. Windows 8 is something of a gamble because it's the first Microsoft OS designed to support "traditional" PCs as well as touch-screen tablets.
Microsoft doesn't need Windows 8 to be an immediate success as it did with Windows 7 in the wake of the Windows Vista disaster. But Windows 8 represents Microsoft's efforts to regain its technological mojo, and so the product's ultimate success or failure will have a big impact on the company's long-term fortunes. Microsoft has said 40 million Windows 8 licenses were sold in the first month of its availability -- a number that didn't exactly wow Microsoft watchers.