Stories of the Year: Software

It was a year of short-lived highs and desperate lows. Through it all, one man reigned supreme: Microsoft chairman Bill Gates. His company's settlement with the Federal Government gets our nod as the top software story of the year. But there were other notables feats to be sure. Below is our take of the 10 biggest stories in software this year. No doubt you have your favorites. Let us know what you think.

1. Microsoft Beats the Government

A no-brainer, frankly. Maybe the biggest story of the year, perhaps the last 10 years. It was the IT industry's "Trial of the Century," a knock-down, drag-out battle between the biggest software company in the world and the most powerful government on the planet. Thanks to some favorable timing, a loose-lipped judge, a pro-business Bush administration and some tenacious litigating and unwavering commitment from Microsoft, the Justice Department folded. In the end, Microsoft avoided a break-up, preserved its desktop monopoly, kept Windows bundled up, and endured only minor changes to its business practices. Bill Gates emerges as the clear winner and still remains the richest man in the world.

2. Windows XP Arrives

The most important product release of the year. Windows XP marked the most heavily hyped, eagerly awaited software release since Windows 95. After some clunky let-downs (Windows ME, NT), Microsoft finally put together an operating system that incorporated the best of previous systems and much-needed new advances. It's not perfect--XP is less crash-prone, but the memory and power requirements have been questioned, along with software and peripheral compatibility--but even the debate over Windows XP provided some much needed energy in the software industry this year.

3. ASP Industry Dies a Lonely Death

Some said it would be a $5 billion industry. Some said $10 billion, $20 billion, even $50 billion. The point is, everyone--analysts, software developers, even Larry Ellison--had lofty expectations for the ASP industry. After rocketing to prominence in 2000, hosting companies began to fall this year like deflating balloons the week after a big party. Sure, there are a handful of successful ASPs still around; they just don't call themselves ASPs anymore. End of story.

4. IBM--the Software Company

Big Blue is known as a computer franchise and an IT services powerhouse. So it was a surprise that the company focused its attention and resources this year on its software business. What software business? many asked. IBM showed them by pumping up middleware brands DB2 and WebSphere, partnering like crazy, re-aligning subsidiaries Lotus and Tivoli, and launching a massive marketing campaign. Now, IBM is a step behind BEA in the application server race and, with the $1 billion acquisition of Informix's database business, pressuring archrival Oracle.

5. B2B Software Crumbles

Second only to the ASP industry in the category for spectacular flameouts in 2001. Like ASPs, many predicted B2B software to be a monster, with e-procurement and e-marketplaces becoming a dominant force in business operations. How about e-failure? In the span of a month, the three leading B2B software makers-- Ariba, Commerce One and i2 Technologies--went from patting themselves on the back to patting down people for loose change. High-priced products, integration problems, and a simple inability to deliver the goods sunk B2B software this year. Check back next year.

6. Start-Ups and IPOs Vanish, Acquisitions Abound

Before Lawson launched its improbable successful IPO last week, there was a dearth of software companies going public this year, a drastic turnaround from 2000. Even more shocking, the start-up seemed on the verge of extinction. A small number of software vendors made their debut this year and still live to tell about it. A frenzy of acquisitions--Macromedia buying Allaire, Microsoft purchasing Great Plains, IBM grabbing Informix--contributed to some serious consolidation in the software market.

7. Linux Goes Mainstream

Yes, Windows is still number one. Yes, many Linux distributors are ailing. And yes, the open-source operating system still has some maturing ahead of it before widespread business adoption But 2001 is the year Linux went mainstream. No longer a maverick OS used solely by computer geeks, Linux became the low-cost, low-maintenance, customizable alternative to Windows. With IBM embracing the technology and championing "Peace, Love and Linux," and other big names such as Computer Associates and Oracle supporting the open source cause, Linux found a home.

8. Security Finally Gets Respect

Sadly, it took the combined effects of several high-profile cyber-attacks and costly viruses as well as the horrific Sept. 11 terrorist attacks, but security technology is finally getting the respect and attention it deserves. Firewalls, VPNs and intrusion-detection software are becoming must-have products and underappreciated vendors such as Check Point and Symantec are emerging as formidable franchises. Unfortunately, now everyone pretends they can do IT security.

9. BEA Systems and Siebel Systems Join Elite Ranks

There were a lot of companies jockeying to be the next Microsoft in 2000. It all turned out to be false hope and posturing except for two heavyweights--BEA and Siebel--that showed they were the real deal. BEA solidified its presence as the top application server vendor and Siebel built a dominant CRM franchise. Both companies have the lead market share in their respective software fields. Now they are mentioned in the same breath with Microsoft, Oracle and IBM.

10. PeopleSoft Makes a Comeback

Not quite as improbable as the U.S. Olympic Hockey Team's Miracle on Ice, but pretty astounding just the same. The ERP software maker struggled at the height of the dot com boom, lost gobs of money and market share, and was left for dead. But PeopleSoft made a stirring return this year with a trailblazing new software architecture and a star-making CRM product. The feel-good story of the year.

Tweet

   

More Channel Programs