Top 10 stories of 2007: Age of realignment

We summarise the biggest developments of 2007, and look ahead to what will happen in 2008.

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This year has been a time of realignment and redefinition, as Apple launched its second zeitgeist defining product of the new century, Dell and Intel battled to regain their former dominance, the software sector consolidated, Google rallied industry heavyweights around a common mobile device platform, and major vendors scrambled to embrace social networking. These, not necessarily in order of importance, are the picks for the top 10 stories of the year:

Software consolidation: The big fish get bigger

While globalisation has fuelled IT mergers and acquisitions for several years, consolidation in 2007 fundamentally reshaped the software industry. Facing saturated markets and nimble, innovative rivals, SAP, IBM and Oracle have snapped up competitors and partners in order to expand customer lists, and acquire expertise and technology in hot areas such as business intelligence and software as a service.

Some of the bigger deals this year included: SAP's $6.8bn (£3.4bn) acquisition of Business Objects, IBM's $5bn (£2.5bn) deal for Cognos, and Oracle's $3bn (£1.5bn) buyout of Hyperion.

As usual, Oracle provided the most drama, with a $6.7bn (£3.3bn) offer for BEA, which was successfully rebuffed - at least, for now. While innovative entrepreneurs are bound to continue bringing startups to market, it's getting harder for medium size vendors to refuse deals with the giants.

Dell reinvents itself

For years, Dell remained the world's number one vendor in the cut throat PC business by exercising unmatched control over logistics and sticking to its direct sales model. But by 2006 HP unseated Dell as global PC leader. Dell seemed to lose its way as rivals adopted better supply chain management techniques, and inquiries into accounting practices forced the company to delay earnings reports.

In January, founder Michael Dell took back the CEO reins and the company expanded offerings for the enterprise, increased services for medium size businesses, and departed from its traditional business model to start selling products in stores. Dell also plans to expand in growth markets globally. Early results are promising. Dell had record revenue growth for the third quarter, fuelled by an increase in worldwide notebook sales.

The iPhone: Apple redefines a market, again

Some companies reinvent themselves. Apple, under the guidance of the mercurial Steve Jobs, reinvents markets. After redefining IT in the 1970s with the Apple II and then pushing the envelope in personal computing with the Mac in the 80s, Apple stalled when its business model ended up giving the company a loyal, but tiny, user base. The company started to ride high in 2001 after launching the iPod, and in 2006 breathed new life into the Mac by moving to Intel architecture chips.

Before the iPhone, there were many multifunction phones. But amid a June launch that had people lined up at stores from Tokyo to San Francisco, Apple proved its design mojo still works. The iPhone combination of cool design, phone functions, Internet connectivity and multimedia features has raised the bar for any manufacturer of connected handheld devices. Apple's revenue and share price have never looked better.

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