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The 10 Biggest Software Stories Of 2010 | Dec 6, 2010

A Wild Ride For The Software Industry

It’s been a tumultuous year in the software industry. In other words, business as usual.

There have been acquisitions, from Intel’s blockbuster buyout of McAfee to IBM’s acquisition of, well, just about everybody. There were Microsoft’s efforts to extend its Windows hegemony into mobile computing with Windows Phone 7, and growing recognition by Hewlett-Packard that having software account for 3 percent of its total revenue isn’t enough. And there was the pending sale of Novell, once a head-to-head competitor of Microsoft, now a relatively minor player.

But perhaps the biggest software-related stories in 2010 were the mega-trends, led by the growing adoption of cloud computing and Software-as-a-Service, which are changing how software is delivered and managed, if not changing the concept of “software” itself.

Here’s our list of the top software stories for 2010.

1. Intel To Acquire McAfee

Intel stunned the industry on Aug. 19 when it announced a deal to buy security software developer McAfee for $7.68 billion.

Yes, the acquisition is big, probably the biggest in the IT industry in some time. (Even Oracle’s acquisition of Sun Microsystems was only $7.3 billion.) But the significance goes beyond the dollar value. As with the Oracle-Sun deal, Intel’s pending acquisition of McAfee is further proof that the line between “hardware vendors” and “software vendors” is becoming increasingly blurred.

The acquisition will help Intel develop security software and hardware products for Internet-ready mobile and wireless devices, and embedded systems in ATMs, cars and even medical devices. The companies expect to close the deal late this year or in early 2011. While the acquisition has made some partners nervous about McAfee’s future, Intel CEO Paul Otellini has pledged to operate McAfee as a wholly owned subsidiary and maintain the current business model for resellers.

2. Microsoft Windows Phone 7 Debuts

With its Windows operating system, Office applications and other products, Microsoft dominates the desktop and is a major player in the data center. But when it comes to mobile devices Microsoft is an also-ran. And that’s a problem because, as pointed out by Ray Ozzie, until recently Microsoft’s chief software architect, we’re moving to a “post-PC world” and Microsoft runs the risk of becoming obsolete.

So that’s why Microsoft Windows Phone 7 is arguably Microsoft’s most important product this year. Windows Mobile, Microsoft’s earlier entrant in the mobile OS sweepstakes, has faired poorly against the Apple iPhone, Google Android and other competitors. Windows Phone 7 is Microsoft’s attempt to hit the “reset” button and start fresh.

So how is it doing? Reports say only 40,000 consumers bought Windows Phone 7 devices on launch day, Nov. 8. Compare that to the 1.7 million Apple iPhone 4s sold in the first three days after its launch in June.