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From high-profile data breaches to heart-breaking liquidations, it has been a rocky year to remember for the IT channel. However, emerging technologies and start-ups a plenty continue to fly the flag for the tech community and give reason to look forward to 2019. Rob Horgan reports on the highs and lows of the last 12 months.
SCANDALS AND SECURITY
If 2017 was the year of ransomware, its successor focused on high-profile data breaches. From the turn of the year, industry experts and government officials rammed the importance of data security down our throats as GDPR fast approached. And while it was easy to get bogged down in the minutia of what the new European Union legislation actually meant, the number of high-profile data breaches in 2018 only highlights the importance of the regulations being enforce.
The need to protect one’s data was thrust into the public’s stream of consciousness with the fallout from the Facebook/ Cambridge Analytica scandal in March. The British-based company harvested around 87 million Facebook users’ personal data from an external researcher who had told Facebook he was collecting it for academic purposes. Cambridge Analytica chief executive Alexander Nix later admitted to using prostitutes, bribery sting operations, and honey traps to discredit politicians on whom it conducted opposition research, and saying that the company “ran all of (Donald Trump’s) digital campaign” as well as assisting the Leave.EU Brexit movement.
In response to the media reports, the Information Commissioner of the UK pursued a warrant to search the company’s servers. Facebook banned Cambridge Analytica from advertising on its platform, before Cambridge Analytica filed for insolvency in May. While a brief backlash, dubbed #DeleteFacebook, saw people turn their back on the social media site, the imperious nature of Facebook is likely to continue its march in 2019.
Mark Zuckerberg’s subsequent testimony in US court has kept data protection in the public realm alongside other high profile data leaks such as Carphone Warehouse surrendering the data of around 10 million customers, or more recently, British Airways admitting that 100,000s of customers’ payment details had been stolen over a period of 15 days.
Sticking with data scandals, 2018 has been a rocky road for cybersecurity giant Kaspersky. From the end of last year, allegations of data misuse have been squared at the Russian security firm. The first major UK firm to succumb to the concerns circulating around Kaspersky was Barclays. Quick on the heels of the National Cyber Security Centre’s (NCSC) decision to advise the UK Government against using Kaspersky products, Barclays pulled the plug on dealings with the firm. The UK’s commitment to cybercrime and data protection was brought to the fore in July with the creation of Britain’s inaugural cybercrime court.
Away from data, Amazon’s Prime Day woes stick in the mind as a low point for the tech community as millions of disappointed customers took to Twitter to lambaste the online retail giant’s sever meltdown on the day of its flagship sale. Like Facebook’s 2018 woes, you feel Prime Day 2018 is a mere speedbump in the road to continued domination for another one of the big five.
Meanwhile, Samsung’s governance scandal reached the courts this year with disgraced vice chairman Jay Y Lee given a five-year jail term for a string of corruption offences. Lee was convicted of bribing former president Park Geun-hye to strengthen his control over Samsung. The conviction is part of a wider corruption investigation into Park, who herself faces conviction before the end of the year. Things could have been worse for the tycoon as prosecutors campaigned for a 12-year sentence.
The start of the year also saw several major hardware suppliers left red-faced in the wake of the Spectre and Meltdown vulnerabilities. Affecting Intel x86 microprocessors, IBM POWER processors, and some ARM-based microprocessors, the bugs allowed a rogue process to read all memory, even when it is not authorised to do so.
HIGH STREET’S INEVITABLE WALK OF DEATH
The slow, painful, drawn-out death of once-loved high street giants is as sad as it is unfortunately inevitable. The last year has seen Maplin throw in the towel, while others such as Carphone Warehouse and John Lewis limp on valiantly despite their bottom lines looking less than perfect.
And it is not just tech retailers feeling the squeeze. House of Fraser was snapped from the jaws of death by retail predator Mike Ashley, a year on from his acquisition of GAME. Big box stalwart Toys ‘R’ Us entered administration in March, while Homebase is winding up 42 of its stores. Even the most British of empires such as WH Smith and Marks and Spencer have been left behind in the ever- changing landscape, both reporting massive losses for the last 12 months. And while 2018 will be remembered as the year that many fell by the wayside, the demise of out-of-date retailers has been on the horizon since Woolworths pulled the plug in its centenary year a decade ago.
The problem with Woolworths, like Maplin and co, is the failure to adapt to the changing demands of its customer base. Just as Woolworths customers no longer wanted to buy pots and pans on the high street, the general public has wised up to paying £18 for a HDMI cable. When Amazon offers the same products for half the price, the high street retailers have got to try something new.
One big box retailer seeing an unlikely renaissance is Argos, following its takeover by Sainsbury’s. First off, installing its voice shop on Google Home devices was a masterstroke both for Google, to compete with Alexa – and for Argos, as it competes with Amazon’s traditional market place. In doing so Argos is the first UK retailer to offer a voice shopping service on the Google Home speaker. And while some industry experts warn that consumers may not be ready to fully utilise this kind of technology just yet, Argos’ digitally-led approach is what should hold it in good stead moving forwards.
And while traditional retailers are losing out to their online competitors, etailers see bricks-and-mortar stores as the logical way to expand. Amazon opened its first cashier- less Amazon Go stores in Chicago and Seattle, before launching its first pop-up fashion store in central London.
Amazon has reportedly considered opening as many as 3,000 Amazon Go stores by 2021. Meanwhile Google has also announced plans to cut the ribbon on its inaugural physical store, with Chicago earmarked as the location for the first permanent Google store. Elsewhere Nintendo has seen a return to its glory days, building off the back of its 2017 Switch success. Combining tech with education, the Labo range has kept momentum up for the gaming giant.
MOVERS AND SHAKERS
From top executives leaving their posts to high-profile acquisitions, the past 12 months have served up a generous sprinkling of movers and shakers. Close to home, the fates of stalwarts of the IT channel have been stark in comparison. While Beta Distribution entered administration in October, CMS Distribution had reason to cheer, announcing a turnover increase year-over-year by 38% to £447m to mark its 30th anniversary.
Despite interest from a number of parties in taking over Beta, no sale of the overall business was achieved and the directors took the decision to place the business into an insolvency process. Foreign exchange rates have been offered up as the initial catalyst behind Beta’s demise.
Beta wasn’t the only channel partner to fall foul this year, as Firstnet Solutions’ venture came to an end in February when the company slipped into liquidation. Speaking of stalwarts bowing out, this year saw PCR’s Women of the Year Lifetime Achiever Clare Sutcliffe leave Raspberry Pi. Her legacy at the company has been left through her coding clubs and Sutcliffe is a great ambassador for encouraging children and women to embrace STEM subjects.
Carphone Warehouse has also had a shakeup in its management structure this year, with chief executive Seb James bowing out in April, with Alex Baldock taking the reins. The changes at the top have also seen Humphrey Singer stand down as finance director and Andrew Harrison leave is role as deputy CEO. Intel chief executive Brian Krzanich also called time on his reign this year. Leaving under somewhat of a cloud, Krzanich left the company following an investigation into a “consensual relationship” with an employee. Sony has also appointed a new CEO in 2018, with Kenichiro Yoshida moving across from heading up the finance division.
Elsewhere Toshiba sold its chip unit for $18 billion to a consortium led by Bain Capital and flogged its PC unit to Sharp, as Toshiba looked to recoup money following the disastrous collapse of its nuclear arm Westinghouse. Meanwhile Foxconn acquired Belkin in March for a cool $866 million, and Fujifilm announced its merger with Xerox in January. A court battle ensued, but the judge ruled that the merger was done in good faith and so it stands.
However, the sale saga of the year belongs to Broadcom in its pursuit of chip rival Qualcomm. With anti- competition watchdogs on high-alert and US President Donald Trump personally blocking the deal, the prospective $117 billion takeover came to an abrupt end in March after months of speculation. Meanwhile Google announced a $1.1 billion deal to acquire most of HTC’s smartphone design division, taking more than 2,000 staff members on board.
INNOVATE, INNOVATE, INNOVATE!
On the back of high profile data breaches, a litany of liquidations and a glut of corruption scandals, it would be easy to be pessimistic about the past 12 months within the IT channel. However, among all the stink and corruption, innovation has gathered pace and drives positivity through all corners of the channel.
Advances in artificial intelligence, augmented reality, virtual reality, mixed reality, blockchain, 5G, microprocessors etc. give reason to cheer and celebrate the disruptors and innovators within the industry.
2018 will be remembered as the year Moore’s law began to slow down, but that is not through lack of innovation but because of it. In March, IBM unveiled the world’s smallest computer at its Think 2018 computer show. Smaller than a grain of salt the 1mm squared chip requires a microscope to see it. Consisting of tiny computer bristles with several hundred thousand transistors the tiny IBM chip reportedly has the computing power of an x86 chip from back in 1990.
The tiny devices are part of IBM’s vision for future technology that will be ‘cryptographic anchors’ embedded in everyday objects, used to ensure the object’s authenticity in combination with blockchain tech. Costing less than 10 cents to produce, the tiny chips are seen as an anti-fraud measure. For example, they could be applied to expensive gadgets so you can be sure you’re buying the real thing and not a knock-off.
Or these tiny computers could even be embedded in things like malaria pills as (edible) ink dots, again to ensure that patients are getting the genuine drug and not a fake. To keep pace with Moore’s law, chipmakers are now turning to ‘chiplets’. Chiplets are part of an industry-wide effort around a new doctrine of chip design that Intel, AMD, and the Pentagon all say can help keep computers improving at the pace Moore’s law has conditioned society to expect.
Instead of carving new processors from silicon as single chips, semiconductor companies assemble them from multiple smaller pieces of silicon.
Away from computers, smartphones are always a good barometer for hardware innovation and 2018 hasn’t disappointed. From Samsung’s launch of its unbreakable phone to the latest iterations of the iPhone, smartphone progression is showing no signs of slowing down.
Speaking of not slowing down, 2018 will be remembered as the year the UK got serious about its 5G roll out. Not only has EE set up 5G trials in London, but Vodafone has continued its run of firsts by completing the UK’s first holographic phone call using 5G. In September, the company made a call from its Manchester office featuring England and Manchester City Women’s Football captain, Steph Houghton MBE. Using 5G technology, she appeared as a live 3D hologram on stage in front of an audience at Vodafone’s UK headquarters in Newbury.
The call followed the announcement in June this year that seven cities would become Vodafone 5G trial areas by the end of the year. In Ofcom’s April 2018 auction, Vodafone secured the largest slice of the 5G spectrum and has since announced that Cornwall and the Lake District will receive 5G during 2019, and has also promised 1,000 5G sites by 2020.
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