For the UK government a series of disastrous computing projects that spiralled out of control and way over budget are likely to make it a year that Whitehall would prefer to forget.

The icing on the cake came with the catastrophic outage at the Department of Work and Pensions that was blamed on human error. This left 80 per cent of staff trying to use the EDS infrastructure without access to benefits payment processing systems.

IT woe for the government continued with the furore over ID cards: whether we should have them in the first place and, if so, whether we would be able to make the database and associated technology work. Industry experts warned that major technological issues could derail the scheme.

But the news for UK e-business was not all bad. The UK climbed up to third in the 'IT sophistication' world league, according to the government's annual benchmarking report. Only Sweden and Ireland now to beat.

UK business-to-business e-commerce was also found to be thriving, according to the Office of National Statistics, which found nearly a third of UK firms making regular online purchases.

On the global e-business stage, tightening government and financial regulations have been giving IT managers a headache as they try to cope with the sweeping changes to back-end infrastructures needed to make these project work.

As the Sarbanes-Oxley legislation for compliance deadline fast approaches, many companies around the world find themselves struggling to meet its stringent requirements.

It was also the year that 18 months of bitter wrangling came to an end when PeopleSoft finally bit the bullet and agreed to a $10bn takeover by Oracle.

The prophets of doom predicted that all our jobs would be lost to the fast-growing practice of outsourcing. Indeed, offshore outsourcing was predicted to reach $17bn by 2008, according to IDC.

It was a good year for search giant Google, which began spreading its tentacles around the globe. From Gmail, to Google Scholar, to Google Desktop to indexing some of the world's top libraries.

This was all topped off with a barn storming flotation which saw the firm's share price beat analysts' expectations hollow to soar on the back of a strong online advertising market.

In the UK's capital the London Internet Exchange became the world's largest internet hub, processing a mind-boggling 55 gigabits of data a second.