Top 10 tech stories of the decade

While the computer industry in the 1990s thrived as corporations re-engineered business processes to incorporate IT, this decade has seen technology truly become part of mainstream culture and commerce via the Internet and ever-cheaper and smaller computing devices. Yes, the Internet revolution began in the ’90s, but it was not until this decade that 14-year-olds raced ahead of professionals in figuring out how to tap social networks with hundreds, and sometimes thousands, of contacts. Here, in not-quite chronological order, are the top technology stories of the decade, selected by the IDG News Service for their singular impact on the industry as well as their emblematic status as examples of the trends that shaped the course of IT.

The dot-com deathwatch

Just months after concerns about the Y2K bug fizzled, the tech-heavy Nasdaq, symbol of the “new economy” because of the many IT companies it lists, hit a high of 5048 … for the decade. From that date (March 10, 2000, to be exact), over the next two and a half years, the index plunged almost 4,000 points, and never fully recovered. During those first years of the 2000s, companies burned through venture capital and IPO funds only to find that they couldn’t stay in business long enough to raise cash the old-fashioned way—offering actual products that people are willing to pay for.

Lesson learned: The e-commerce companies and IT vendors that survived figured out how to deal with a more skeptical customer base and did not suffer as much as other sectors during the Great Recession at the tail end of the decade. Now IT appears poised to help lead the economy back on a growth path.

Microsoft is busted

In April 2000, U.S. District Court Judge Thomas Penfield Jackson issued the first big ruling in a series of antitrust decisions to hit the software giant during the decade. Jackson found that Microsoft maintained its monopoly power by anticompetitive means and illegally attempted to monopolize the Web browser market. The final judgment in the U.S. federal case established restrictions related to licensing agreements and ordered that Microsoft release some of its intellectual property. Microsoft also faced private and government antitrust cases involving individual U.S. states, Sun Microsystems, and the European Union, which fined Microsoft $794 million in 2004.

Ramifications persist. Microsoft still meets with U.S. officials who monitor its behavior, and the European Commission just this month accepted the company’s promise to allow Windows users to choose which Internet browser they use, ending a browser-market investigation.

The cases were a huge distraction for Microsoft but ultimately made its software work better with competing technology. They also provided a template of sorts for antitrust cases brought against Intel this year in the U.S. and Europe.

Apple launches the iPod, and gets back on track

Several years after his return to Apple, after being banished in the 1980s when company growth stalled, co-founder Steve Jobs realized that though the mainstream market for digital devices was booming, music players were not very well designed. The iPod, launched in October 2001, was Apple’s game-changing entree into the consumer mass market. It was an immediate hit, and a year and a half later, Apple completed the content part of the picture with the launch of the iTunes Store, which opened up the floodgates for legal music on the ‘Net.

The concept of convergence among consumer electronics, communications, and computer technology took root in the ’90s, but it wasn’t until this decade that the consumer market, with Apple leading the way, became the holy grail for even traditional IT vendors. By 2003, mainstream PC makers like Dell offered LCD televisions and Hewlett-Packard announced digital cameras. But the iPod was, and remains, a clear category leader and became a symbol of the consummation of the marriage between IT and the consumer market.

HP ties the knot with Compaq

Carly Fiorina came to Hewlett-Packard with a plan for sweeping changes at the old-school tech vendor, going public in September of 2001 with a bold gamble to buy Compaq for $25 billion. An ugly battle ensued, as investors dumped shares, analysts warned of the massive risks associated with complex tech mergers, and heirs to HP’s founding fathers went public with their opposition to the merger, setting the stage for one of the largest corporate proxy fights in history.

Fiorina prevailed in 2002, but the next few years were rocky, and she was forced out in 2005. Ironically, her grand plan for the company ultimately worked out under her replacement, the low-key former NCR President and CEO Mark Hurd.

Hurd brought operational efficiency to the company, which is now the biggest IT company in the world, surpassing archirval IBM. The acquisition also pointed the way for an M&A trend in the decade that saw the biggest IT bellwethers grow even bigger in an effort to become one-stop shops for customers.

Google superstar

Google’s initial public offering in August 2004 was probably the most talked-about business story of the past 10 years. A year later its share value ascended to the point where the company became the most highly valued media company in the world, beating Time Warner. Its stock and its dominant position in search and related advertising is still the envy of just about every other company on the planet, a testament to the company’s tech savvy and ability to figure out how to monetize its position.

Ad dollars have enabled the company to branch out, offering a host of online apps including Gmail, the Android mobile phone platform, and the upcoming Chrome OS. The company is leading the way to a future in which most people access most data and applications from the Web, rather than a hard drive. One of the big stories of the next decade will be whether the company can make money from its non-search technology, and successfully complete its end-run around Microsoft, which still dominates software for the PC.

Vista delays …. and launches

After numerous setbacks, Microsoft in November 2006 launched Vista, along with Office 2007 and Exchange 2007. Though Microsoft CEO Steve Ballmer at the time called it “the biggest launch in our company’s history,” it didn’t have that feel. Consumer versions of Vista and Office wouldn’t be available until 2007, and the operating system itself was painfully slow, buggy, rife with annoying system alerts, and failed to offer working drivers for a range of peripherals. Customers did not buy it.

By the time Windows 7 was launched this October, Vista’s predecessor, Windows XP, was still being used by 72 percent of computer users, compared to 19 percent for Vista. Though Win7 has been greeted with relative enthusiasm, the Vista episode left an indelible mark on Microsoft, which as it struggled to repair the faulty OS and burnish its tarnished image, saw Google and Apple race ahead in Internet search and the consumer market.

Facebook’s decision in October 2007 to sell a $240 million minority share to Microsoft, which had been fighting Google for the stake, solidified social networking’s central place in technology this decade. The Microsoft stake valued Facebook at $15 billion total, even before it figured out how to monetize its services. While social networking had been a growing trend for years, Facebook led the way, offering interactive features and a development platform that had the social networking site MySpace and others playing catch-up.

The problem of monetization, however, has been compounded by privacy issues. The ability of Facebook’s Beacon ad system to track user actions whipped up a controversy two years ago that Facebook is still struggling to deal with. Just this month, Facebook introduced new privacy settings aimed at making them simpler to figure out by its end-user base, which has grown to a whopping 350 million people worldwide.

The rise of the botnets: Security tops Web worries

Here’s a pop quiz from the annals of top 10 lists this decade: Why are U.S. presidential candidate Ron Paul, the “Storm Worm,” e-card invitations, and the country of Estonia all alike? Within the span of one year they all became associated with botnets, which let criminals control computers in numbers up to tens of thousands.

Botnet perpetrators use so-called “zombie machines” to flog useless products and inflict all sorts of damage, as when Estonian government Web sites were crippled in April 2007. Botnets got so sophisticated that they began to be offered as, essentially, software-as-a-service packages to criminals. That’s what happened six months after Estonia was attacked, when the Paul campaign was hit. Nearly 200 million spam messages supporting Paul for president were sent without permission from the campaign.

The botnet phenomenon very publicly marked an overall problem for the Web: As more and more people use the Internet globally, an ever-increasing number of hackers use their talents for online fraud. Until international cybercrime laws and enforcement procedures are in place, victories against cybercriminals are only temporary.

Gates moves on … baby boomers, move over!

Bill Gates’ June 2006 announcement that he would step out of his daily role at Microsoft in 2008 to focus on philanthropy came at a transition time. Microsoft has been criticized for being rarely, if ever, a “first mover,” as for example Apple has been. But by combining deep technical knowledge with entrepreneurial acumen, Gates embodied the great American knack of seizing a great idea and commercializing it beyond expectations. His deal to provide the operating system for the IBM PC in 1981 fueled the personal computing revolution in IT originally sparked by the Apple II, establishing an industry. Gates led Microsoft to dominate the desktop market, bring the graphical interface to the masses, and navigate the currents of the early Internet era.

While it can be argued that Gates’ withdrawal from daily operations at Microsoft did not have a direct impact on tech, it marked a milestone: As the baby boomer leaders of the PC era begin to be usurped by Internet upstarts, so too is technology moving away from a desktop-centric view of the world. Meanwhile, Gates may prove to have a great second act if he can revitalize philanthropy, as he did computing.

The iPhone: Apple redefines a market, again

Yes, Apple products warrant two entries in the decade’s top 10 tech stories. That’s because while some companies reinvent themselves. Apple, under the guidance of the mercurial Jobs, reinvents markets.

After redefining IT in the 1970s with the Apple II and then pushing the envelope in personal computing with the Mac in the 1980s, Apple stalled when its business model ended up giving the company a loyal—but tiny—user base. The company started to ride high again after launching the iPod, and in 2006 breathed new life into the Mac by moving to Intel-architecture chips.

Before the iPhone, there were many multifunction phones. But amid a June 2007 launch that had people lined up at stores from Tokyo to San Francisco, Apple proved its design mojo still worked. The iPhone combination of cool design, phone functions, Internet connectivity and multimedia features raised the bar for any manufacturer of connected handheld devices.

This article includes items from the IDG News Service’s annual top 10 technology stories, and contributions from staff worldwide.