It's been a big year for the computer industry, with some of the. largest mergers in history, record sales in many sectors, new technology finally delivered and a few momentous court cases. This year saw several PC vendors splash out in a round of corporate mergers and acquisitions. Most notable was Compaq's $3 billion (#1.8 billion) acquisition of Tandem, a move that expanded the number one PC vendor's kingdom, giving Compaq high-end might to conquer the core enterprise market and challenge vendors such as IBM and Hewlett-Packard. Compaq also opened its wallet for the $280 million (#169.7 million) acquisition of Microcom in April. The deal made Compaq a second division player in the remote access market, furthering the company's networking dreams. It was also an unusual year for Gateway 2000, whose attempt to buy credibility in the corporate PC market with the $194 million (#117.6 million) acquisition of high-end server manufacturer ALR will be tested in 1998. This will see the company navigating uncharted waters next year, as Gateway has never sold indirectly before. However, the company also had to undergo a round of job cuts thanks to some poor financial results.
At the high end, Silicon Graphics experienced a few pains this year, with poor sales leading to declining profits. The company is now preparing to take the plunge into the lower reaches of the market, with NT machines, and booted out long-time CEO Ed McCracken as part of the restructuring. Elsewhere, Apple attempted a total regeneration - again. In an abrupt turnaround following months of speculation, CEO Gil Amelio resigned and the company welcomed founder Steve Jobs back into the fold. The prodigal son brought with him the OpenStep operating system which Apple is now developing into Rhapsody, Apple's forthcoming 32-bit operating system. In one of the more ironic happenings of the year, Microsoft also announced a $150 million (# 90.9 million) investment in Apple, as part of the latter's reinvention effort. Apple went on to put an end to its cloning strategy with the purchase of Power Computing for $100 million (#60.6 million) in September. The company also learned from the example of vendors like Dell and Gateway, setting up a Web site to sell its wares. This year will decide whether its reinvention has worked. This was also the year the Internet finally grew up. The efforts of groups such as the American Civil Liberties Union (ACLU) highlighted just how strong feelings are for this remarkable medium. On the 26 June the US Supreme Court made an historic ruling that US president Bill Clinton's attempt to gag the Internet with the Communications Decency Act (CDA) was unconstitutional. Web sites all over the world celebrated the Net's liberation and the Clinton administration back-tracked swiftly to avoid further embarrassment. In the UK, trademark infringement sent scare stories throughout the corporate world as the term "cyber-squatters" was coined. Cheeky "consultants" set themselves up in what appeared to be the perfect crime: to register the domain name of a large company, like Virgin, and try to sell it to the company for a hefty profit. But even High Court judges know a cyber-con when they see one and the practice was halted by a ruling only a fortnight ago. As for the much-publicised issue of child pornography on the Net, thanks to the efforts of the Internet Watch foundation, ISPA (Internet Service Providers Association) and several other organisations the Internet is no longer a haven for paedophiles. The Internet as we know it could be very different in a few years time if a technological breakthrough announced this autumn comes to fruition.
The technology, from Norweb and Nortel, will allow users to access the Internet through the electricity mains. This could mean faster, cheaper Internet access, opening up the medium to many more users than has previously been possible. 1997 was the year when the thin client message finally sunk in at Microsoft HQ in Seattle. Spotting an opportunity to extend the Windows brand into the potentially huge terminal replacement market, Microsoft announced the Windows Terminal and immediately dubbed it the thinnest client. Having worked secretly on a project to turn Windows NT into a multi-user server on which Windows Terminals would connect, Microsoft gave up in May and licensed Citrix WinFrame, a competing technology. A Microsoft multi-user NT technology, Hydra, was spawned from that agreement and previewed in November. SCO too had something up its sleeve in the network computing sector. In November, the company announced Tarantella, a competitor to Hydra, which provides access to mainframes, Unix and Windows applications from a thin client. It was also a good year for development tools and databases. Oracle finally brought out Oracle 8, its long-awaited object relational database server. Microsoft crammed all its development tools into one box called Visual Studio 5.0, and Borland managed to ship JBuilder, its much anticipated Java RAD tool. We have had to say goodbye to some smart technology this year. IBM finally canned OpenDoc, its compound document architecture, in favour of Java technology. And Microsoft halted the development of MIPs and PowerPC versions of NT. This effectively killed off any chance of the Common Hardware Reference Platform (CHRP), which was based on PowerPC, ever taking off. CHRP would have enabled Apple Macs to run Windows NT for the PowerPC. On the processor front, Intel introduced the Pentium II. But Intel's fastest processor didn't have a look-in once its advertising bods got to work on the long-awaited graphics extensions for the Pentium, MMX. An unsuspecting world was introduced to the Bunny People, and we'll never be the same again. There were big moves in Novell's boardroom in 1997. In April, the company finally plugged the gap left by Bob Frankenberg's departure in 1996 with a new CEO, Eric Schmidt. Schmidt was previously at Sun, where he was one of the top brains behind Java. Under Schmidt's leadership, Novell is repositioning itself as a true Internet company and has just introduced its Open Solutions Architecture to get developers writing their Java server applications on NetWare. Other headline news in networking was the $6.6 billion (#4 billion) merger of 3Com and US Robotics, creating a massive new company which still can't match up to Cisco in size. And finally, having been on the drawing board for years, Gigabit Ethernet networking products finally appeared late this year. A review of 1997 would not be complete without a mention of the browser wars. Both Netscape and Microsoft were on the offensive with the latest and greatest versions of their respective Web browsers. Microsoft launched Internet Explorer 4.0; Nescape launched Communicator, its Internet tools suite. Ironically, shipment of IE 4.0 has been a mixed blessing for Microsoft. Both Sun and the US Department of Justice took an instant dislike to the product. Sun announced that IE 4.0 broke its licensing agreement for Java because it claimed Microsoft shipped an incomplete version of the Java VM in the software. The US Department of Justice (DoJ) began a legal battle with Microsoft, this time alleged strong-arm tactics against PC suppliers about bundling IE with all Windows 95 PCs. The DoJ is contesting that the browser should not be considered a feature of the operating system. Microsoft thinks otherwise, and the matter could take some time to resolve. If the DoJ wins, the consequences for Microsoft could be very serious indeed. On a happier note for Microsoft, the company announced earlier this summer a massive investment in a brand new R&D plant in Cambridge. The first major R&D facility outside Seattle, the #50 million operation will have close ties to the University computing labs. Lotus did its best to steal Microsoft's crown in the office applications market. The company announced in January, and previewed in November, a software suite of cut-down office productivity applets written in Java and able to run on a tiny footprint on any Java-based network computer. Overall, for Lotus, it was a good year. For Apple and Novell, fortunes were mixed. For Microsoft, events took a turn for the worse.
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