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A long year for Sun--and tech in general
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For tech companies, 2009 was a year that went from awful to getting just a bit better. Layoffs and reorganizations were commonplace across the enterprise sector, as companies sought to cut costs and eke out profits amid the worst recession in decades.
Bad news hit a variety of key segments in the tech industry. PC vendors such as Hewlett-Packard, Dell, and Lenovo all saw their sales and earnings plummet early in the year.
As the economy sagged, so did the tech job market. Along with the torrent of layoffs, there was a paucity of new jobs throughout Silicon Valley and the tech sector. Popular sites such as Dice.com reported huge declines in the number of job listings.
As better results started to trickle in around the third quarter for more tech firms, corporate executives felt bullish enough to predict a sustained recovery in store for 2010. Research firms like Gartner and IDC also got into the act, seeing better times ahead for sectors from cell phones to servers and semiconductors.
Despite, or perhaps because of, the roller-coaster economy, tech companies also kept busy with the usual round of takeovers, many hoping to grab chunks of profitable new markets. IBM scooped up security firms left and right, Dell shelled out almost $4 billion for Perot Systems, and Cisco Systems had its eye on videoconferencing player Tandberg.
Oracle takes heat over Sun acquisition
But the biggest takeover of the year was Oracle's $7.4 billion buyout of Sun Microsystems, a deal still in regulatory limbo, after the European Commission formally objected to the merger in November.
The battle for Sun began late in 2008, with a string of suitors, including IBM. After Sun shareholders and the U.S. Department of Justice both OKed the merger, Oracle CEO Larry Ellison figured that it was a done deal, until he ran into the long regulatory arm of the European Commission.
Fears over an Oracle-owned MySQL reportedly kept the Commission from approving the deal.
Some thought the Commission's resistance smacked of European protectionism. But other powerful voices, such as MySQL co-founder Michael "Monty" Widenius, who left the company in February, expressed his concerns over potential conflicts of interest and urged Oracle to sell MySQL.
With each day of uncertainty, Sun continued to hemorrhage money and lose customers to players such as IBM and HP. Yet throughout all the sturm und drang, Ellison kept a positive spin, insisting that MySQL would be in safe hands with his company.
In December, Oracle backed that spin with a more concrete series of pledges to do right by MySQL. Among other things, Oracle pledged to spend more cash than Sun did on MySQL development and to set up advisory boards to include MySQL customers.
Oracle also said it would not require paid support to get a commercial MySQL license and that it would offer flexible support contracts to customers.
In response, the European Commission that same day issued a statement suggesting that it's warming up to the idea of a Sun-Oracle combination.
Cloud computing: a silver lining?
Despite hard times, the tech industry still found the time and energy to promote its latest trends, with cloud computing one of 2009's hottest topics.
As companies scaled back on internal staff and data center resources, vendors took advantage by beefing up their cloud-based services. In spite of fears over data security, cloud computing has proven a hit among companies eager to save cash.
Major vendors such as AT&T and IBM opened up the clouds, hoping to convince customers of the cost-effectiveness of running their businesses online.
Microsoft, too, continued to venture further into cloud computing, always with a wary eye on what Google is up to. At its Professional Developers Conference in November, Microsoft announced plans for the formal launch of Windows Azure, the cloud-based operating system--already in the hands of some customers, and set to go into production for all users starting January 1, 2010--that lets developers write programs that run on servers in the company's data centers. Tens of thousands of developers have used Windows Azure through the course of 2009, Chief Software Architect Ray Ozzie told the PDC audience.
"When we began developing Azure, we developed it more or less with a clean sheet of paper, saying, 'What will the operating environment look like for the next 30 years?' Ozzie said in an interview with CNET's Ina Fried. "If you look at VMware or [Amazon's] EC2, what it really is--and I mean to be saying this respectfully--but it's more or less a (virtual machine) hosting environment. It's not a transformational computing environment."
Overall, the industry is certainly feeling more optimistic than it did a year ago. For 2010, the tech sector, like the rest of us, is waiting for more profitable times ahead.
--By Lance Whitney
Featured coverage
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