Good riddance to a year that witnessed a flood of redundancies, data blunders and economic turmoil.

The most influential businessman of our time, Bill Gates, moved on from Microsoft to focus on philanthropy. Microsoft itself, moving into middle age and struggling to gain ascendancy on the web, was involved in many of the biggest stories of the year. HP bought EDS. Long-awaited products like the Android-based G1 "Google phone" were launched. Standards wars involving file formats like OOXML concluded. The battle against spam purveyors like McColo went on and on.

Here, not necessarily in order of importance, is the IDG News Service's pick for top 10 technology stories of the year.

The credit crunch hits IT workers

In October, the Bank of England declared the UK was in the midst of a recession. The tech sector is not immune. In September, Lehman Brothers spectacularly went bankrupt. The collapse of the investment bank, a pioneer in cutting-edge IT systems, sent shudders through the city, leaving IT workers in fear for their jobs.

By December, as the recession deepened, thousands of jobs, including back office workers, were cut at banks including HSBC and Credit Suisse.

But the panic began long before Lehman Brothers collapsed. Throughout the third quarter, firms had slammed the brakes on outsourcing investment, according to sourcing advisory firm TPI. In May, Citi said it would cut a massive £1.5 billion from annual IT costs. By November, the situation blew up, and the bank announced a further 52,000 job cuts, including IT.

In March, a report by recruitment service provider Giant Group said IT contractors were struggling to find work. Supplier Fujitsu Siemens warned that permanent IT staff could face difficulty looking for work, as it predicted IT departments would halve in size in a decade. In August, Gartner said there would be a widespread slowdown in the IT sector.

Spanish bank Santander, which owns Abbey, somewhat turned the turmoil to its advantage, snapping up Alliance & Leicester and Bradford & Bingley in the summer.

Not all was doom and gloom for the tech sector, however. Red Hat chief executive Jim Whitehurst predicted that the credit crunch would encourage enterprises to invest in open source. Forrester founder George Colony said in November that the technology sector's fall will not be as dramatic as the bust of 2000. Prime minister Gordon Brown said that technology investment was essential to boosting the economy.

NEXT: HP gobbles up EDS, Microsoft pursues Yahoo

HP gobbles up EDS

Hewlett-Packard's announcement that it would acquire IT outsourcer Electronic Data Systems for £7.5 billion was a big deal not just because large acquisitions became relatively scarce in a year of contraction. With the acquisition, HP will challenge IBM in services, consolidate its position as the world's top IT company, and expand its portfolio as a further hedge against an IT market that is likely to decline globally for several quarters.

As part of its integration of EDS, HP said it would slash 24,600 jobs, including over 3,000 jobs in the UK.

HP services accounted for 16 percent of its 2007 revenue of $104 billion, while IBM generates more than half its revenue from services. EDS will expand HP's consulting and outsourcing capabilities, bringing it to the number two spot in services worldwide behind IBM. With the EDS acquisitions under its belt, HP expects revenue between $127.5 billion and $130 billion for the year, compared to IBM's expected $105 billion.

Microsoft chases Yahoo

Microsoft's attempts to buy Yahoo generated more speculation, leaks and pontification than any other story in the tech world this year. Microsoft officially withdrew its bid on 5 May after failing to agree on a price with Yahoo, even though it ended up raising the original 1 Feb. offer of $31 per share, or about $44.6 billion, to $33 a share.

In the aftermath Jerry Yang resigned as CEO of Yahoo, which saw its share price sink to $9. After declaring he was no longer interested in purchasing the whole company, CEO Steve Ballmer said in early December that the two companies should do a search deal "as soon as possible." Yahoo last week removed one impediment to a deal that Yang had erected: a controversial severance plan. Ultimately, much more than a price tag is at stake. Google is using the cash generated by its dominance in Internet search and advertising to develop new services and applications that diminish Yahoo's importance and challenge Microsoft in the market for software as a service. Look for the saga to conclude with a deal, sooner rather than later.

NEXT: OOXML vs ODF, Google Android launches

OOXML scores controversial victory

Microsoft declared victory in its fight to get fast-track approval for Open Office XML as a global file format standard on 1 April. Some critics said it was ironic that the software giant crowed about its success on April Fools' Day, given that a vocal group of International Organization for Standardization members had complained about irregularities in the voting process. Industry insiders said the whole affair smacked of the days before antitrust cases in the US and Europe when Microsoft could throw its weight around and skirt the boundaries of the law with impunity.

Others said that the OOXML approval means life will be more difficult for IT managers who want to use applications incorporating the rival Open Document Format standard. The ultimate significance of the whole affair may be that in its fight to get OOXML approved as a standard, and subsequent efforts to make the file format more interoperable with other document formats, Microsoft has signalled that it understands that the software market has changed. As web and open source applications become increasingly important, even proprietary software giants need to make sure their APIs and file formats are transparent and connect to the wider world of software.

Android and the opening of the mobile world

When executives from T-Mobile, Google and HTC took the stage in September at a sleek Manhattan restaurant to unveil the G1 - probably the most long-awaited product of the year - they also marked a milestone in a changing mobile world. While the design of Apple's iPhone still ranks number one among phone aficionados, the G1 brings a new, open business model to the mobile device world.

Google has stressed that the open source Android platform will let developers build applications to run on multiple devices and networks. There is no assurance this will actually happen, but the Android concept, and its execution, is more open than what Apple has done so far. The Android developer kit is free and any application can be added to the Android application store. Meanwhile, Symbian, the platform which has the largest market share, was opened up midyear and the LiMo mobile Linux group has a loyal membership. Mobile communications will never be the same.

NEXT: Public sector IT bungles

Public sector IT failures

The UK public sector has had a spectacular year for IT project failures. Department for Transport capped the year with a payroll system project that has been labelled one of the 'worst cases of project management' that MPs have ever seen.

The ongoing saga of the £12.7 billion National Programme for IT (NPfIT) led to the NHS chief executive admitting that it needed a rethink. The goal was to create an electronic health record across the country. But the programme is running at least four years late. The roll out of Cerner Millennium software, one of the two systems being used to store patient records digitally, hit major hurdles in London when the Royal Free Hospital lost £7.2 million in six months. Things came to a head this year when one of the lead contractors Fujitsu was fired from the programme, leaving the south of England without a supplier. As the year draws to a close Nicholson has finally acknowledged the NPfIT has reached a “pivotal position”, and the future of the programme remains under doubt.

The list of public sector project problems goes on and on: Ministry of Defence's Defence Information Infrastructure programme, which is both late and £185 million over budget, according to the National Audit Office; The HM Revenue and Customs postponement of a major upgrade to the £140 million pay as you earn (PAYE) tax system.

Central government spends around £12 billion each year on service contracts, of which a staggering £290 million is lost due to project failures, according to the National Audit Office.

“Despite the huge amount of cash lavished on these services, government departments do not take the process anywhere near as seriously as they should," said Edward Leigh MP, chairman of the Committee of Public Accounts. "And it beggars belief that, where the services provided are found to be wanting, government departments do not always invoke penalty payments on suppliers, even when the contract stipulates that they can do so.”

To address these problems, Whitehall hired former Logica chief executive Martin Read as an IT troubleshooter and saviour for governmental IT. Read's task is to examine how to best exit failing IT projects, and identify areas for ministers to save billions in costs. Evidence of Read's work has already begun. When Chancellor Alastair Darling issued an emergency Pre-Budget Report at the end of November, he praised the role of greater efficiencies in back office operations and shared services as areas that would bring in "substantial additional savings from 2010-11 onwards".

NEXT: Spam wars and XP refuses to die

McColo, king of spam, falls and the fight goes on

At the end of October, McColo, a company based San Jose, California, that hosted a range of cybercrime activities, was shut down. About half the spam on the Internet disappeared. A private citizen, Washington Post reporter Brian Krebs, had put pressure on ISPs to drop McColo's service. The problem is that without support from the police and federal agencies, there's no way to ensure that spammers like McColo will go out of business permanently.

Private citizens do not have authority to raid and confiscate data centre technology, which could shutter an operation like McColo forever. Some security experts are saying that spam is again on the rise, and suspect that McColo, one way or another, may be at least partially back in operation. It's difficult to get authorization for the possibly hundreds of warrants it would take to confiscate the property of a spammer like McColo. Sweden's TeliaSonera in fact did help resurrect McColo for a while. Until international cybercrime laws and enforcement procedures are in place, victories against spam are only temporary.

XP is dead, long live XP

At the end of June, a long-feared date arrived. PCs preloaded with Windows XP would no longer be available. Industry insiders had braced themselves for that date because XP's successor, Vista, was plagued with performance glitches and a host of problems like driver incompatibility. Though Microsoft has cleared up many of those problems, Vista never really ended up getting the respect of many IT pros.

However, Microsoft left ways for people to get their hands on XP. Though retail PCs would not be shipped with XP, business customers - the ones who really care about incompatibility issues, could still get their hands on the OS. Low-cost notebooks can continue to ship with XP through June 30, 2010. Many users are running XP until Windows 7 ships. Company officials promise the OS will not give rise to the same device driver problems that bugged Vista users. Stay tuned.

NEXT: Data lost all over the shop

A year of lost data

The year was punctuated with yet more data breach incidents, where the government and the private sector lost the data of millions of citizens.

The public sector lost the sensitive data of four million people - that's one in every fifteen people in the country - in incidents of various sizes, according to estimates made by the BBC in August. In spite of this, it claimed in recent weeks that it had made a “staggering improvement” in data security.

No individual case hit the size of last year's loss by HM Revenue & Customs of 25 million people's data. But there were a range of large data breach incidents that shocked the public, mainly because they could easily have been avoided. Clearly, no lessons have been learnt from the HMRC debacle.

Despite the problems, encryption wasn’t on everybody’s mind. In September, three portable USB hard drives containing sensitive information on up to 1.7 million military staff were stolen from an RAF base. But the RAF defended the lack of encryption, saying the data had been locked away in a highly secure location.

Analysts have openly criticised the government for failing to use technology properly to backup its security policies.

The NHS, currently constructing one of the world’s largest databases to hold the health records of everyone in the country, mislaid the sensitive information on around 10,000 patients, it was revealed. But that was aside from the Isle of Wight NHS Trust’s loss of 38,000 patient records when a backup tape went missing in transit.

A Ministry of Defence laptop, which contained personal information of 600,000 military staff, was stolen from an officer in the Royal Navy in January. In nine separate incidents, the Ministry of Justice lost 45,000 people’s records, including criminals and even simply suppliers.

NEXT: More data losses and Bill Gates has left the building, almost

Data losses continued

Government contractor PA Consulting was fired after an encrypted memory stick, with information on it 84,000 prisoners, went astray.

But businesses were also responsible for some spectacular cases of poor data security. In Autumn, a report by the Ponemon Institute said over half of UK businesses had lost data, including one in four law firms that had mislaid mobile devices containing confidential records.

In August, the personal details of around one million bank customers, including NatWest and Royal Bank of Scotland customers, were found on a computer bought on Ebay for £35.

HSBC bank lost an unencrypted, password-protected computer disc with the details of 370,000 customers. An unencrypted laptop containing the personal information of 14,000 individuals was stolen from Skipton Financial Services.

A laptop was lifted from an employee of accountant Deloitte, reportedly containing the pension details of former employees of the British Transport Police, Network Rail, BSkyB and Vodafone. Five laptops were pinched from the Bank of Ireland, containing over 30,000 customers’ details.

Hackers attacked the website of Cotton Traders, stealing the data of 38,000 customers. But the clothing retailer refused outright to give details of its security arrangements.

After years of lobbying, in November the Information Commissioner Richard Thomas was finally granted href="" title="stronger powers" target="_blank">stronger powers to be able to spot check any organisation for data security, and fine data controllers who are failing on security.

The end of an era: Gates retires

When Bill Gates ended his daily role at Microsoft in June, it was a milestone not only in his own career but for the tech industry. Gates did not invent the PC, but he invented the PC industry, providing a software platform on which computers and applications from many companies could interoperate. As a scrappy young entrepreneur in 1981, he struck a deal to provide the operating system for the IBM PC. With IBM's imprimatur, personal computers took centre stage in IT.

Gates' career reflects the arc that PCs have taken. As Gates steps away from business life, PCs are becoming just one way to connect to the Internet. But even though the classic PC form factor may not be as central to tech as it once was, personal computing software has morphed and found its way into billions of devices of all sizes and shapes. Meanwhile, Gates is still relatively young and has the opportunity to make as much of an impact in philanthropy as he did in technology.