By Anam Alpenia
The past 12 months have been more than eventful for the technology industry. From hacking to mega funding rounds to the biggest technology IPO ever, 2014 has certainly not been boring. Here are 10 are of the most important stories.
Sony Pictures hacked
Sony Pictures endured a torrid end of the year. The company was on the verge of releasing The Interview at the end of November, a movie starring Seth Rogen and James Franco and involving a plot to assassinate North Korea leader Kim Jong Un, before a massive hacking incident unfolded. The hackers obtained and disseminated emails, personal information, unreleased movies and more in one of the entertainment industry’s worst ever breaches. Neither the motive or the identity of the hackers has been revealed, although both the FBI and President Barack Obama were quick to point the finger at the North Korean government.
The incident grew worse for Sony when theatres across the U.S. were threatened, presumably by the same hackers, and told not to show The Interview. Sony’s initial response to pull the movie completely was met with derision from those in the entertainment industry and President Obama himself, all of which criticized the company for caving to illegal pressure and sacrificing the movie creator’s freedom of speech. Sony then partially reversed its decision, releasing the movie online and in independent theatres on Christmas Day. Obama warned North Korea of retaliation, and perhaps not coincidentally, days later North Korea’s Internet suffered a complete outage for several days. The story took another turn for the bizarre in the last days of December, when security experts claimed North Korea wasn’t behind the attacks, and some even theorized it was an internal breach by a disgruntled employee or a group of employees working together.
The prolonged affair, which, it could be argued, surpassed the plot of The Interview in both complexity and intrigue a long time ago, will continue into next year. Regardless of who is behind the attack, the incident delivers another stark warning of the importance of proper digital security measures.
Apple launches the latest iPhone
The biggest product reveal of the year was, as it is most years, from Apple. The iPhone 6 and it’s bigger brother, the iPhone 6 Plus, were unveiled in September to much hype, joy and acclaim. The two phones have enjoyed excellent reviews, and gave Apple’s smartphone business a pre-emptive shot in the arm. The 6 Plus is Apple’s biggest ever phone and gives the company a stake in the phablet space, previously dominated by the likes of Samsung. Sales over the holiday period in the U.S. have been predictably impressive. A report by Flurry Analytics showed that 51% of devices activated over Christmas were made by Apple, with the iPhone 6 the most popular. Apple’s closest competitor Samsung accounted for just 17% of activations, marking a hugely successful Christmas for the Cupertino-headquartered firm.
Microsoft hires Nadella
Back in February Microsoft unveiled its new CEO to the world, and it was the inside man who won the race. Many big name CEOs were rumored to be replacing the retiring Steve Ballmer. But Microsoft went for the 22-year veteran of the company, Satya Nadella. Formerly the head of Microsoft’s cloud division, Nadella was hailed by founder Bill Gates as the best man for the job. At the same time as Nadella’s appointment, it was revealed Gates was stepping down as his role of Chairman of the board. In August, Ballmer relinquished his role on the Microsoft board. The appointment of Nadella has had a galvanizing effect on Microsoft – the company’s stock is up 27% for the year of 2014.
The Mt. Gox incident
The alternative, digital currency bitcoin suffered a catastrophic blow in February when the bitcoin exchange Mt. Gox revealed it had lost 850,000 bitcoins, which were valued at the time at around $473 million. Users of the service complained about the sluggishness of withdrawals on the site prior to the company stating that it feared the bitcoin had been stolen. The company did find around 200,000 bitcoin in an old online wallet, but the remaining 650,000 bitcoin is still missing. Prior to the disappearance bitcoin was valued at around $850, a figure which dropped as low as $400 by the end of February Although many predicted the debacle would spell the end for the cryptocurrency, the bitcoin endured, although it is now valued at just over $300.
2014 has been the year of astronomical valuations for tech startups. In early December, taxi app Uber announced a $1.2 billion funding round that valued the company at $41 billion, making it the most valuable startup in the world. That was until the last week of 2014, when Xiaomi staggered the world with a $1.1 billion raise at a $46 billion valuation. These figures dwarfed that of Dropbox, which confirmed a $350 million Series C at a $10 billion valuation in February, and AirBnB, said to be worth $13 billion prior to an employee stock sale. Messaging app Snapchat also joined the $10 billion club in August.
Heartbleed security vulnerability
The Heartbleed vulnerability, exposed in April, was a particular dangerous flaw in the security of any website using the OpenSSL software for encryption. Heartbleed allowed hackers to strip down the encryption of a website and force it to throw out random data from its memory. Users were unable to establish if their personal information or password had been stolen using this method, which meant practically everyone on the Internet was forced to change their passwords. A patch was created to fix the vulnerability, although a number of websites still haven’t applied it, according to some researchers.
Much maligned smartphone maker BlackBerry has begun what could be an extraordinary recovery. The company launched its Passport phone in September, and reviews were encouraging. The slightly strangely-shaped Passport was followed up by a return to the glory years, with the BlackBerry Classic. Blackberry stock has broken the $11 mark, at time of going to press, having started the year languishing around $8. The company’s Q3 revenue figures were hardly cause for enthusiasm, yet investors have stayed the course, convinced that CEO John Chen’s recovery plan is destined for success. BlackBerry’s shift of focus away from consumer and back to its core customer base – the enterprise, will make it an interesting company to watch in the new year.
Uber has had an eventful year. The taxi service app has raised huge amounts of money at mega-valuations and appears to lead its market. But the success has not come without its challenges, controversies and downsides. Legal complaints against Uber’s service have plagued the company across the globe all year. Germany has been the battleground on which Uber has lost the most so far, although cities in India, the U.S. and other countries have also put bans on part or all of the app’s services. Regular cab drivers have launched protests across Europe, in London, Madrid and Paris to name a few. Further controversy has arisen from Uber drivers being accused of attacks and rapes.
The upper management of the company has not helped either – a Senior Vice President was reported to have suggested Uber spend money to smear a journalist who was writing unflattering articles about the startup’s culture. There have also been privacy concerns, as the same executive revealed Uber can track a user’s movement through the app. This year has seen Uber’s valuation soar in one direction while its reputation has dropped in the other.
This year’s M&A activity was further proof of a buoyant tech market, as the industry’s leaders, Google, Facebook, and Apple made the splashiest acquisitions. The search giant Google used its deep pockets to make three half billion dollar acquisitions in areas as diverse as satellites (Skybox), artificial intelligence (Deepmind), and home security (Dropcam). Its biggest, $3.2 billion for the connected home appliance manufacturer Nest Labs, has given it an early lead over Apple in building out the smart home of the future. Facebook, meanwhile, pursued and consummated relationships with the OTT messaging service WhatsApp for a staggering $22 billion combination of cash and stock, with another $2 billion spent on the VR headset company Oculus, which got its start through a Kickstarter campaign. A third target, Snapchat, however, slipped through CEO Mark Zuckerberg’s fingers. And Apple, despite sitting on over $160 billion in cash, practiced its characteristic restraint, although it did spend $3 billion to acquire Beats, the headphone maker and music streaming service from hip-hop mogul Dr. Dre.
Tech’s biggest IPO – ever
Perhaps the biggest technology news of the year was the American public stock market debut of Alibaba, the China-based amalgamation of e-commerce services led by a charismatic founder, Jack Ma, and backed by considerable investor enthusiasm. The company raised $25 billion in its IPO, which far surpassed the $16 billion raised by Facebook in 2012 and propelled it into the upper echelon of technology companies by overall market capitalization. Alibaba, however, is not without risk. The lead up to the public offering was marked by accounting discrepancies and concerns over its peculiar legal structure as a Variable Interest Entity, a requirement of any Chinese company raising capital from foreign investors. Whether the stock continues to climb (it was at $105.72 as of 5 ET, 12/30) is a story that figures to play out, in 2015 and beyond.Article amended on 12.31.14 to correct a mixing up of Microsoft founders.