Ten Days that Shook the World

HP Acquisition of Compaq: September 3, 2001

The Woman Who Fought the Odds

The big fish eat small fish was the leitmotif throughout the decade
in the IT sector. The first large scale hint of what would come, was
the announcement of HP's acquisition of Compaq on September 3, 2001.
Carly Fiorina, who became the CEO of HP in the year 1999, had a key
role to play in the merger and many analysts felt, that was responsible
for her subsequent departure from HP too.

The tech slowdown at the beginning of the decade (largely through
the impact of the dotcom bust) had impacted HP too and Carly realized
that only improving the internal strategies would not be sufficient to
bring HP back to the pink of health. The company had to certainly plan
out something different. Initially, this merger was not planned. It
started with a telephonic conversation between Fiorina and Capellas,
Chairman and CEO Compaq. The idea behind the conversation was to
discuss on a licensing agreement, but it continued as a discussion on
competitive strategy and finally a merger. It took two months for
further studies and by September 2001, the boards of the two companies
approved of the merger.

In spite of the decision coming from the CEO of HP, the merger was
strongly opposed in the company. The two CEOs believed, that the only
way to fight the growing competition in terms of prices was to have a
merger. But the investors and the other stakeholders thought that the
company would never be able to have the loyalty of the Compaq
customers, if products are sold with an HP logo on it. It was the
strong determination of Carly Fiorina, that she was able to stand by
her decision in the face of severe resistance. Wall Street and all her
investors had gone against the company, lampooning her ideas with the
saying that she has made 1+1=1.5 by her extravagant ways of expansion.
Fiorina had put it this way, that after the company's merger, not only
would it have a larger share in the market, but also the units of
production would double. Her dream of competing with IBM would also
come true.

Capellas left the company after serving less than a year as
President of HP to become CEO of MCI Worldcom. Fiorina helmed HP for
nearly three years after Capellas left. HP laid off thousands of former
Compaq, DEC, HP, and Tandem employees, its stock price generally
declined and profits did not perk up. Though the merger initially made
it the number one PC maker, it soon lost the lead and further, market
share to Dell. In addition, the merging of stagnant Compaq with HP's
lucrative printing and imaging division was criticized as that
overshadowed the latter's profitability. In February 2005, the Board of
Directors ousted Fiorina. In late 2005, HPQ seemed to find its feet
under the new leadership of Mark Hurd. At this same time Dell seemed to
be faltering and HPQ took back the number one sales position. Hurd
separated the PC division from the imaging and printing division. HP's
PC segment has since been reinvigorated and now generates more revenue
than the traditionally more profitable printers.

Oracle Acquisition of Sun Microsystems:

April 20, 2009

The Great White's Biggest Bite

Oracle's announcement to acquire Sun on April 20, 2009 was in some
way the culmination of its predatory instincts throughout the decade.
It was the Great White Shark, that roamed the choppy oceans of the IT
world and gobbled up fishes like Peoplesoft, Siebel, Hyperion and BEA
systems and many others that swam tech's marine ecosystem.

What would ensue during the course of the next ten years would not
only reshape Oracle, forever changing its growth and product-innovation
strategies, but it would also transform, to varying degrees, the
enterprise software landscape and many customers' future technology
plans and purchases. "We would be interested in buying almost
anything," Ellison proclaimed at a meeting with financial analysts just
a month after the PeopleSoft announcement, in July 2005. True to
Ellison's word, by the close of 2009, Oracle had acquired 56
companies-30 of which filled out Oracle's applications portfolio, and
26 of which spruced up its technology lines of business. And the
fifty-sixth was the big one, Sun Microsystems.

Ellison saw massive consolidation coming, sermonized the trend and
opened his checkbook to make sure it happened, as he predicted it
would. Towards the middle of the decade, Ellison publicly predicted a
massive wave of consolidation that he said would eliminate about 1,000
high-tech companies, leaving a few giant category-killers. The
scenario, he told The Wall Street Journal, 'is the end of Silicon
Valley as we know it.' Though at the time of Oracle's first major
acquisition of Peoplesoft, the anti-Oracle sentiment was widespread by
the end of the decade, its aggressive strategies are more or less
begrudgingly accepted. The turnaround in sentiment leading to gradual
acquiescence to Oracle is perhaps best reflected in the acquisition of
Sun, once the poster boy of all tech romantics.

The Sun deal was Oracle's largest iteration in its decade-long
acquisition strategy to become an IT Masterbrand-it signaled its entry
into hardware and made it virtually the most influential voice within
the open source movement and communities. While the full impact of this
acquisition is yet to be visible, even a partial consummation would go
a long way in making the world's largest enterprise apps vendor also
its most diversified one. While some doomsayers predicted that Sun
could become Oracle's Waterloo, it would more likely catapult it one
more step towards becoming the world's number one IT company. God (mere
mortals cannot just call him Larry Ellison), what's next?

Zuckerberg Launching Facebook:

February 4, 2004

Friends in an Unfriendly World?

When Time magazine named 'you' as the Person of the Year in 2005,
the biggest endorsement was given to the rise of the social networking
phenomenon, which saw its rise and rise throughout the decade. People,
eager to express individuality and creativity, created public pages
with little to no HTML writing experience under websites like
Friendster, MySpace, Xanga, LiveJournal, Twitter and Facebook. Each of
the sites allowed users to post and share photos, blogs, comments and
make 'friends'. Facebook is currently the largest social networking
site on the Web, with Twitter emerging as something quicker and edgier.
However, has all these made world a more friendly place? Not really,
considering that a global survey in 2009 found 'unfriend' as the most
popular word.

Being dumped by his girlfriend Erica prompted Mark Zuckerberg to
invent a social networking site called Facemash from his Harvard dorm
on February 4 2004, which rated women in the campus as 'whether hot or
not'. Facemash became Facebook following a few modifications with the
idea coming from his days at Phillips Exeter Academy, which had a
long-standing tradition of publishing an annual student directory with
headshot photos of all students, faculty and staff known as the
'Facebook'. Zuckerberg's Facebook started off as just a
'Harvard-thing', until he decided to spread it to Stanford, Dartmouth,
Cornell, Columbia, Cornell, Yale and others. Finally, he moved to Palo
Alto and over the summer of 2004, Facebook was launched as a corporate
entity. The social networking revolution was also born.

After several lawsuits by his co-founders, in 2007 Facebook sold 1.6
percent stake to Microsoft for $240 million. With over 450 million
users, Facebook is the face of social networking-a bestseller detailing
the fallout of Zuckerberg and the co-founders is already on the stands,
while a biopic is also slated for release. If Facebook is the face of
social networking, then Twitter is its biggest facial adornment. In
Oakland in 2000, Jack Dorsey started his company to dispatch couriers,
taxis, and emergency services from the Web. Building on dispatching and
inspired in part by LiveJournal and possibly by AOL Instant Messenger,
he got the idea at this time for real time status communication. He
decided that SMS text suited the status message idea better and built a
prototype for Twitter in two weeks. He co-founded Obvious, a podcasting
startup which then spun off into Twitter. As CEO, Dorsey saw the
startup through two rounds of VC funding-though improving uptime was
initially given more priority over generating revenues, considering its
universal popularity now Twitter is looking at channels to monetize it
now.

Lenovo Acquisition of IBM PC division:

May 4, 2005

The Mandarin Goes Mainstream

IBM was the company that launched PC and even at the beginning of
the decade to the majority of people 'PC meant IBM PC'. All this
changed on May 4, 2005 when the company, that had launched the personal
computer revolution into the office changed hand as Lenovo, previously
a local Chinese computer manufacturer with no real global footprint,
acquired IBM's PC division for $1.3 bn The deal established Lenovo as a
global player in the PC market and heralded the arrival of Chinese
companies on the global scene.

As metaphor, it was an irresistible deal: the purchase of IBM's
storied personal computing division by a Chinese company most Americans
had never heard of. It could only signal the rise of the upstart and
the demise of the establishment. Voracious Chinese entrepreneurs were
banging on the door. An icon of corporate America was in foreign hands.
Capitalism was being transformed. The reality was more mundane though,
as barring the initial hiccups that any deal of this magnitude goes
through, things have never been too topsy turvy.

When Lenovo began to absorb the IBM division in 2005, both sides
were acutely aware of the turmoil at HP after it bought rival Compaq in
2002; combined sales fell as the HP and Compaq brands cannibalized each
other, and the divisions feuded internally. The new Lenovo faced
geographic and cultural hurdles, too: The Chinese company was based in
Beijing, the IBM division in Raleigh, NC. And virtually none of the
IBM-ers spoke Chinese. But Lenovo-IBM has some advantages that
HP-Compaq didn't. The product lines, for one, are largely
complementary: Lenovo-branded computers are dominant in China, with 35
percent of the market, while the Think computers have a strong
worldwide presence with higher-margin corporate clients. Plus, the
IBM-ers, instead of rejecting their new corporate parent, embraced
Lenovo.

Launch of the iPod on October 23, 2001

The Eye of the Apple

When Steve Jobs returned to Apple in 1997, prospects were bleak.
What a difference a decade makes. With the introduction of the iPod in
2001, Macs running on Intel Processors in 2006, the industry-defining
iPhone in 2007, and the iPhone App Store juggernaut in 2008, Apple has
become a force to be reckoned with, while Jobs has been hailed as the
conquering hero in a black turtleneck. The D-day would probably be the
launch of iPod on October 23, 2001. Though iPod's contribution to
overall Apple revenues have dwindled by the end of the decade, there is
no doubt that it helped swung its sagging fortunes and paved the way
for the iPhone and iPad to come later and steal the show. However, even
these never enjoyed the share of their respective sectors the way iPod
dominated the digital media player market.

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 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 Internet.

Since October 2004, the iPod line dominated digital music player
sales in the United States, with over 90 percent of the market for hard
drive-based players and over 70 percent of the market for all types of
players. In January 2007, Apple reported record quarterly revenue of
$7.1 billion, of which 48 percent was made from iPod sales. On 9 April
2007, it was announced that Apple had sold its one-hundred millionth
iPod, making it the biggest selling digital music player of all time.
(Since then it has sold in excess of 250 million units). Even its
contribution to overall Apple revenues have become less than 10
percent, but there is little doubt that this saved the Apple from
extinction.

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 HP
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.

AOL Acquisition of Time Warner:

January 14, 2000

The Disaster

Ah yes, AOL-Time Warner. The granddaddy of "What Were They Smoking?"
era, and a lasting reminder of the skewed logic of the time. AOL's $164
billion acquisition of Time Warner on January 14, 2000 was intended to
combine print and broadcast media with the Internet to form a
powerhouse that would forever change the media landscape. Of course,
almost immediately after the deal was announced, the dot com economy
began creaking ominously. Soon after, of course, it lapsed into a
complete and utter free fall.

Time Warner dropped the AOL name in 2003 and in 2009 finally
revealed a plan to spin off AOL as a separate company. The caper to the
whole saga-and something that sounds an awful lot like an April Fool's
joke-is AOL's re-branding to "Aol." Whether a deal is good depends on
the side of the table one sits on. The January 2000 acquisition of
Time-Warner by AOL was great for AOL shareholders and turned disastrous
for Time-Warner's. Playing on the fear instilled in media companies by
the success of dotcoms left and right, AOL managed to engineer a deal
where most of the shares of merger would go to its shareholders.

Ultimately, the deal became a disaster for all parties involved as
the attempt at finding synergies between the two companies found
themselves bumping against the cold reality of political warfare and
corporate protectionism. With units fighting against each other for
most of the decade, the only way to reclaim the piece was to spin-off
AOL, nine years later, for less than one percent of the combined value
of the two companies in 2000.

If there is a bigger example of destruction of financial value by a
deal, I'm not aware of it. Ultimately, the importance of this deal is
two-fold: first, it was the last big deal of the dotcom era and can
serve as the marker for the end of that era (some might quibble that
the stock market didn't fall apart until about six months later but
that's just a detail). The deal also showed that expertise in online
and not online are not necessarily compatible. Both require different
business models and experts who understand the particulars of each
market.

Planning 9/11 Attacks Done Online:

September 11, 2001

From Cyber crime to Cyber terrorism

It would be unthinkable not to somehow include 9/11 in this list of
days. While it would perhaps be the date of the century and maybe it
directly did not have any great impact on IT, the fact of the matter
was that it was the first hint that terrorism too has acquired the tech
veneer. The plotters did most of their planning online; and terms like
cyber snooping, wi-fi hacking etc all came into the lexicon.

It's inevitable-once there's real money for the taking, the amateurs
get pushed out and the pros move in. In the 2000s, organized
criminals-bad guys (terrorists and hardcore economic offenders) as
opposed to boastful hackers looking to impress their friends-came up
with brilliant online schemes either to threaten your country or to
steal your cash. According to several sources, by the end of the
decade, most of the major terrorist strikes across the world and
corporate data breaches were directly attributable to organized crime,
online. Web development used to be just for smart folks; now it's for
wiseguys.

What's common between US presidential candidate Ron Paul, the 'Storm
Worm,' e-card invitations, and the country of Estonia? 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 Websites
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 cyber crime
laws and enforcement procedures are in place, victories against cyber
criminals are only temporary.

The US Department of Defense (DoD) charged the US Strategic Command
with the duty of combating cyber terrorism. This is accomplished
through the Joint Task Force-Global Network Operations, which is the
operational component supporting USSTRATCOM in defense of the DoD's
Global Information Grid. This is done by integrating GNO capabilities
into the operations of all DoD computers, networks, and systems used by
DoD combatant commands, services and agencies.

On November 2, 2006, the Secretary of the Air Force announced the
creation of the Air Force's newest MAJCOM, the Air Force Cyber Command,
which would be tasked to monitor and defend American interest in
cyberspace. The plan was however replaced by the creation of 24th Air
Force which became active in August 2009 and would be a component of
the planned US Cyber Command. On December 22, 2009, the White House
named its head of Cyber Security as Howard Schmidt. He will coordinate
US Government, military and intelligence efforts to repel hackers.

Microsoft Antitrust Ruling: April 3, 2000

No Monopoly

The Microsoft anti-trust case was going on from the 90s; the
culmination in the form of ruling came in 2000, but its impact
reverberated throughout the decade. On April 3, 2000, Judge Jackson
issued a two-part ruling: his conclusions of law were that Microsoft
had committed monopolization, attempted monopolization, and trying in
violation of Sections 1 and 2 of the Sherman Act, and his remedy was
that Microsoft must be broken into two separate units, one to produce
the operating system, and one to produce other software components.
Though the DC Circuit Court of Appeals later overturned the rulings to
break up Microsoft, it did not overturn the findings of the fact.

On November 2, 2001, the DOJ reached an agreement with Microsoft to
settle the case. The proposed settlement required Microsoft to share
its APIs with third-party companies and appoint a panel of three people
who will have full access to Microsoft's systems, records, and source
code for five years in order to ensure compliance. Microsoft's
obligations under the settlement, as originally drafted, expired on
November 12, 2007. However, Microsoft later 'agreed to consent to a
two-year extension of the part of the Final Judgments' dealing with
communications protocol licensing, and that if the plaintiffs later
wished to extend those aspects of the settlement even as far as 2012,
it would not object.

The anti-trust suit humbled Microsoft, cost it billions in fines
paid to rivals, (possibly) kept Sun alive by handing it out $2 billion
in 2004 and perhaps most importantly cleared the way for the rise of
Google and cloud computing. That would have happened anyway but keeping
the Microsoft honchos distracted and less competitive than they were in
the 1990s definitely helped. And though, Google has later often given
rise to similar apprehension, the Microsoft anti-trust suit has perhaps
checkmated for ever the threat of runaway monopoly in the IT sector.

Of course, it wasn't Microsoft's only run-in with the regulators.
Throughout the decade, the Seattle king was beset with a series of
anti-trust issues and no doubt if it has leashed the rabidly aggressive
Microsoft to act more judiciously.

NASDAQ hitting 5048 on March 10, 2000

The Beginning of the End

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.

In the late 1990s, the stock market, fueled by investment in high
tech was on a roll, new tech companies were launching every day, and
even Alan Greenspan's talk of 'irrational exuberance' couldn't dim our
enthusiasm. Venture capitalists were pouring money into shaky new
websites. The sites scaled up as quickly as possible, even without a
demonstrated revenue stream or business model. By mid-2000, the dotcom
bubble had burst, taking the economy and many people's livelihoods with
it. Boo.com, Pets.com, Webvan: It was fun while it lasted, but the
after-effects were definitely not funny.

Google IPO on August 19, 2004

The Search Ends Here

Though you cannot point a specific date in its journey, it would be
blasphemous to conclude this listing without including Google. Its IPO
on August 19, 2004 would fit the bill perfectly. This IPO 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.

Interestingly, as the decade comes to end, Google is drawing the
sort of unwanted government scrutiny that Microsoft attracted in the
90s. Will Google humbled by the trustbusters in the coming years? Or
will it learn from Microsoft's mistakes and make peace with the feds
before any of its business plans get squashed. That will be one of the
big events when this list is again compiled in 2020.