Original URL: https://www.theregister.com/2012/12/26/ten_technology_cockups_2012/
Ten… top tech cock-ups of 2012
Twelve months of corporate clods, government bumblers, and half-arsed hackers
Posted in On-Prem, 26th December 2012 06:00 GMT
The past year provided us with some wonderful tales of innovation and expertise, but we all like to see a car crash as much as success story, right? So here's a roundup of the most colossal cock-ups of the last 12 months, including face-plants by Google, Facebook, Apple, and others who succumbed to that most universal of human attributes: stupidity.
10. The HP-Autonomy follies
OK, we're being a bit sneaky starting off with this one, seeing as how HP's takeover of this global business-information wrangler was announced in 2011, but HP's very public admission that it had overpaid massively for the software house is relatively recent and had to be included.
When Meg Whitman announced last month that HP was taking an $8.8bn write-down on a company that it bought for just over $10bn last year, everyone in the industry was gobsmacked – not least being Autonomy's directors. In HP's financial statement, the Autonomy board was accused of "serious accounting improprieties, disclosure failures and outright misrepresentations" over the deal.
There then followed a war of words between the Autonomy board, auditors KPMG and Deloitte, and the SEC over the validity of HP's claims, a war that is still raging as we speak. Former HP boss Leo Apotheker has defended his role in the purchase, and points out that the HP board, including Whitman, was fully onside at the time.
It's going to take months if not years to sort this out, and the lawsuits are already flying. Whether HP just overpaid or mismanaged the company badly in the last year, or if Autonomy cooked its books, may never be properly decided. In the meantime, HP's shareholders will likely foot the bill.
9. Trust Lulzsec's Sabu? Wrong...
Just before the turn of the millennium, former Intel boss Andy Grove wrote a very nice book called "Only the paranoid survive" – a message several members of the hacking community learned to their cost this year.
In 2012, Sabu – the putative head of the LulzSec hacking group – officially turned stool pigeon and ratted out several members of the cracking community. Sabu, aka Hector Xavier Monsegur, stayed undercover until March before coming out after the US authorities arrested five people in the UK, Ireland, and the US based on information he'd provided.
LulzSec had claimed major hacking scalps, starting initially with soft targets like PBS after it showed a less than flattering documentary about Julian Assange. But the group moved onto bigger targets, hitting the FBI, CIA, and even Rupert Murdoch's News International. The group's crowning moment came when they broadcast a supposedly secure conversation between the FBI and Scotland Yard.
But unknown to the hacking collective, its ringleader had been turned by the FBI way back in 2011. Faced with the prospect of 124 years and six months in a "don't drop the soap" prison, Sabu had decided to play ball and rat out everyone he knew.
Evidence provided by Sabu has now been used to take down other members of the hacking community, and he'll no doubt play a part in many more trials to come.
8. Google's financial info-slip
There were more than a few reasons to add Google onto this year's list, but this was the sweetest: the internet wünderkind brought down by a dead-tree publisher.
When you're trying to cushion the impact of bad news, it's traditional to do some extensive forward planning. Google had some tricky financial results to announce this fall, but its PR moves were thrown into disarray after the firm responsible for handling its non-digital publishing made the mistake of releasing a draft copy of the search giant's financial results ahead of schedule, complete with the line "PENDING LARRY QUOTE".
The results weren't good, at least to the growth-obsessed Wall Street types who press the buttons on the world's stock exchanges these days. Profits were down by a fifth on the quarter, even though revenues rose by 45 per cent. While Google is still very profitable, and is better than most at long-term thinking and investing in research and development, the company lost 10 per cent of its value in a single day's trading.
Larry Page made only his second public speech in half a year on the afternoon of the cock-up (he's dealing with a persistent throat illness), aiming to reassure the markets and it all turned out OK in the end. Google's stock hasn't been the industry's best performer of the year, but it's done better than many since.
Of course, Google's value wasn't that badly hurt in the long term, a fact that well illustrates some of the idiocies of the stock market. Its staff didn't get 10 per cent more stupid by the affair, its holdings held their value, but a single slip by an print operation made one of the most memorable screw-ups of the year.
That said, Google did put in some other strong contenders to the list. Who can forget Eric Schmidt's Gangnam-style dancing, a video he'll regret having video taken for many years to come?
7. NASA's premature organics pimping
It's been a very good year for NASA, in a lot of regards.
The agency managed to land the one-ton nuclear-powered Curiosity rover on the Martian surface at a time when the Russian Phobos-Grunt mission, which was intended to bring back samples from Mars' moon was DOA. Curiosity is now trundling across the Red Planet's surface, and all the indications are that we'll be getting data from it for years.
El Reg was there at the landing, an historic night of enormous excitement and some memorable moments for all concerned. But in November an NPR journalist chatting with John Grotzinger, principal investigator for Curiosity, reported he had let slip that NASA had found something "historic" in the Red Planet's soil.
Imaginations promptly ran wild – and for (almost) good reasons. One of Curiosity's primary goals is to investigate the possibilities of organic life on Mars. No one expects complex life forms, but if organic life can be found on the Red Planet, and it's either close to or (more excitingly) independent of life on Earth, then the implications could be huge.
If organic life had been found on Mars, and it closely resembled that which is on Earth, it could help answer one of the basic questions of human existence: where did we come from? Mars matter hits Earth over the centuries, sent not by "intellects vast and cool and unsympathetic, [who] regarded this earth with envious eyes, and slowly and surely drew their plans against us," to quote HG Wells, but by ejecta from asteroid and comet impacts.
If life existed on Mars, it could conceivably have spread to our own planet. On the other hand, if Mars life is very different to life on Earth, this suggests a huge variety of possibilities for life to bloom throughout the universe.
For the press, the case was also very curious. NASA is famous for firing off a press release about just about anything that comes its way, be it a pretty Hubble image, yet another report on Voyager leaving the Solar System, or just what tunes the ISS crew are waking up to. If they were holding something back it must be huge!
Speculation grew to such an extent that NASA was forced to release a press statement denying that organic matter had been discovered and pouring cold water on hopes that life had been found. When Grotzinger finally released Curiosity's results, he noted that in future he'd be watching what he said around the press.
While the actual news – that there might be organic material found but that NASA is still checking – came as a massive anti-climax, it's still pretty exciting stuff. People just have to get used to the fact that what NASA and its science team find exciting and historic doesn't always translate well – or immediately.
6. SOPA/ACTA/PIPA fiasco
This could have been the year that internet rights took a nosedive, thanks to a series of regulations such as the Stop Online Piracy Act (SOPA), the Protect IP Act (PIPA), and commercial treaties such as the Anti-Counterfeiting Trade Agreement (ACTA)
SOPA and PIPA were American inventions, put forward by Big Media's Congressional minions to try and bolster up a business model that's failing fast in the face of internet development. ACTA had the same Big Media sponsors, but it was a transnational trade agreement rather than direct legislation.
Thankfully for most of us, all these attempts failed thanks to a combination of user activism, technology lobbying dollars, and bad management by legislators and governments. As the year draws to the close all the regulations that looked so worrying have been stymied – but it could have gone very differently.
SOPA and PIPA initially looked like they would get through Congress without much difficulty. True, there were the usual naysayers, but with a political deal or two the pair of legislative actions looked likely to pass this year. Although large sections of the media barely covered the issue, word got out about the proposed changes, and companies such as Google and Facebook got onside.
Wikipedia and a host of other sites went dark for a day in protest over SOPA's website-takedown powers, security experts pointed out damning flaws, and legislators started to get nervous. Meanwhile, Google and others were using their increasing lobbying muscle to work from the inside.
In SOPA's case, even the White House expressed disapproval, prompting an angry rant from Rupert Murdoch and dark threats from the Motion Picture Ass. of America. But by January the game was up, and both bits of legislation were shelved.
But only a week later, ACTA was signed by 26 governments, and a lot of the same people who were protesting about SOPA transferred their attentions to the treaty. The signing itself was hardly auspicious, as the EU negotiations monitor resigned in protest at the way debate had been stifled.
ACTA started life in the Bush presidency and was originally billed as a way to stop the trade in counterfeit goods, but quickly got expanded to include digital rights management and a host of other goodies that industry wanted sorted out. All the negotiations were conducted in strict secrecy, with only government negotiators and industry bodies getting to see the draft treaty.
Secrecy sometimes has its advantages, but as draft recommendations started to leak out, many interested parties got increasingly worried. Some early drafts called for customs officers to be drafted to search travelers' goods for stolen or pirated material. Those involved in the treaty made reassuring noises, but still refused to open the process. Fears grew.
When it came to signing off on the final ACTA treaty, it looked as though this closed process had worked. Here in the US it looked like a done deal – the Obama administration argued that as this was a trade treaty it didn't need a vote from elected representatives - but thankfully Europe still holds truck with this messy democracy business.
There were public demonstrations in the streets of European capitals over ACTA, with members of the Polish parliament staging their own. Several countries that signed off on the treaty expressed doubts about its contents, and national governments like Germany postponed ratifying it until the European Parliament had voted on the matter.
European commissioners tried to delay any voting until the fuss had calmed down, but that calming wasn't happening. When member states actually got to cast a vote, ACTA was declared dead in the water and the treaty's other signatories were left with a useless piece of paper.
You could argue – and you'd be right – that there was a lot of useful stuff in SOPA/PIPA/ACTA. We are going to need to take a good look at how rights and property are managed in an online world. But it's clear that one-sided regulation isn't the way to do it.
5. Top-dog CIA email bungling
If you're the head of the CIA, it might be expected that you'd know something about email security. Not so in the case of David Petraeus.
In November the head of the CIA was forced to resign after it was revealed that he'd had an affair with his biographer. One has to wonder at the poor vetting procedures at the CIA that failed to spot this, since the news leaked only after some email shenanigans using Petraeus' account were reported to an FBI agent.
It appears that Petraeus and his paramour were exchanging messages by a simple method – one that's used by criminals for years – of writing a draft email, saving it, and then handing over email login details to the recipient so they can read it and reply without actually sending a traceable email message.
While this does mean handing over your email account details to a third-party, it eliminates an email trail. What is doesn't do is stop your paramour looking though your email account, finding details of someone who they consider a rival, and abusing information in that account. Considering Petraeus' day job, the account could also have contained very sensitive material.
A subsequent investigation found out about Petraeus' dirty little secret – and the news came out just after President Obama's election, which gave conspiracy theorists something else to natter about. Petraeus resigned because of the affair; although I can't help feeling the lack of security should have been the reason for his resignation.
4. RIM's roller coaster
RIM was going to be higher up on the list, but the company has showed remarkable resilience under the leadership of CEO Thorsten Heins, appointed back in January of 2012.
RIM was in serious trouble when company stalwarts and co-CEOs Jim Balsillie and Mike Lazaridis quit in January and Heins took over. The company had rested on its laurels too long and was losing to Android and Apple because it hadn't grasped the changing nature of the smartphone market. BlackBerry 10, the OS to rebuild the company, was delayed until 2013 and its stock price and revenues were in the toilet.
Meanwhile, its attempt to break into the tablet market with the PlayBook was a dismal failure, and decent sales were only achieved by such savage discounting that RIM was losing money on each device sold. Developers weren't keen on it, either.
While the company is still hemorrhaging revenues, it does look in slightly better shape at the end of the year than at the start. Heins' efficiency plan and mass redundancies have let it with a healthier balance sheet, and it's still growing its subscriber numbers year-on-year. Meanwhile RIM's new handset looks very interesting and developers are getting paid to code for it.
It all now hinges on next year. RIM has a cash reserve of around $3bn to try to buy its way back into the smartphone market, and there are still a lot of enterprises that like BlackBerry and which might be persuaded to stay. If Heins can pull it off, his RIM resuscitation would make him a hot property in the CEO market.
3. Metro or Not-Metro?
When is a Metro interface not a Metro interface? When someone at Microsoft screws up, it appears.
As Microsoft geared up for the launch of Windows 8, it was trying to sell the world on a user interface it called Metro. This UI consists of large tiles for use by thick-fingered fondleslab buyers whom Ballmer & Co. hoped would fall in love with the new look and propel Redmond forward to a bright new age of consumer domination.
Then in August, just a few short months before the launch, Microsoft announced it was dropping the term Metro to describe the interface, and said this had just been a codename all along. For most of the year journalists and the public had been told about Metro and Metro-style apps, but now we were all told to forget it ever happened.
It has been suggested that someone at Microsoft hadn't done their trademarking due diligence and had missed the fact that someone had already had the rights to the term Metro – such as the Régie Autonome des Transports Parisiens that runs Paris' famous Metro railway system.
The suggested alternative term – "Windows 8 Store Apps" – hardly rolled off the tongue. It was also inaccurate: where did it leave applications that aren't sold via the store. Developers at this year's BUILD conference also expressed no joy on the topic.
Sadly, Microsoft chose not to go with El Reg's suggestion: The Interface Formerly Known As Metro, or TIFKAM.
2. Facebook's sorry IPO
When Facebook went public it was a huge event for the technology industry, and a simultaneous bubble-bursting of social media stocks that had been a long time coming.
Those of us who lived through the original dotcom boom saw the signs. It's the oldest tradition in the technology book: if you build it they will come, and as long as the VC money is flowing then party on. When an online coupon-clipping concern like Groupon gets a $15bn valuation, you know something's amiss.
Facebook's IPO wasn't helped by problems with NASDAQ's servers, which faltered under the demand for shares. This caused some very uneven trading, and when the $38 initial share price started to drop the system couldn't handle the share trades. NASDAQ is currently facing a lawsuit over the whole issue.
As the days went on, Facebook's stock price fell and fell, leaving more and more investors wondering just how they'd managed to come up with a $100bn valuation for the social network. Other companies that went for an IPO in the same way also suffered – although LinkedIn, which had lowballed its initial sales price, and which returns a healthy profit, still looks good.
Facebook's share price looks to have bottomed out – for now – and is slowly rising at time of going to press – for now – but a lot of fund managers and some private investors such as Mark Cuban took a bath. The madness of crowds always has victims.
That said, from a purely capitalistic viewpoint (as Eric Schmidt would put it), Facebook and its founders made out like bandits. The IPO price was in line with secondary trading market prices and all the shares sold at price. A lot of people got very paper-rich and Mark Zuckerberg was happy: he kept control of the company.
But I suspect that Facebook's problems with the IPO will continue to hurt the company. It's a quoted firm now, with responsibilities to shareholders and a need to bring in ever-larger profits. As we've seen with the botched attempt to monetize Instagram and Facebook data, the effects of going public may be felt for some time to come.
1. Apple's crap Map app-flap slap
There really could be only one pick for the number-one spot on this list. The Apple Maps fiasco has done more to hurt the company's image than anything else this year, leaving their reputation – and those of some of its supporters – in the dust.
At the start of the year Apple was riding high. The loss of cofounder Steve Jobs had been handled better than many in the industry had expected, and Tim Cook looked like a safe pair of hands to take the company forward. Apple was on its way to being the most valuable in the world in dollar terms, and was beating the competition like a red-headed stepchild.
But Jobs' legacy included an unpleasant fight with Android. Jobs had been annoyed at Eric Schmidt's apparent betrayal of accepting board membership at Apple at the same time that Google had been working on a smartphone alternative to the iPhone.
War was declared, red in tooth, claw, and lawyers letters over Android. In addition, Apple decided with iOS 6 to block parts of Google's game plan by dumping its mapping application.
This might have worked if Apple had a remotely comparable product.
Google has ploughed millions into its mapping division, and by any reasonable standard it has the best free mapping information out there. If you want to know where to go and what your destination looks like, Google has the data.
Mapping is a key function for smartphone users. The free turn-by-turn navigation offered by Android is crippling simple GPS firms such as TomTom and is increasingly becoming a must-have app for users. Not a true killer app, but close.
When iOS 6 with Apple Maps launched, there was initially little fuss. Apple's policy of only letting friendly reviewers get advanced access to kit held up well, and virtually none of Cupertino's chosen few even mentioned the mapping function in their glowing reviews of the new operating system. But then users actually tried it out and the results were plain to see.
Apple's Maps app simply didn't work correctly. Sure, it could get you from point to point – just about – but the level of detail included was poor and mapping information was frequently wrong. The list of cock-ups grew day by day as people realized that the application just wasn't fit in any meaningful way.
Even the Australian police warned against using it for fear of getting lost in the desert.
True, companies such as Microsoft have made a good business plan of copying the competition with services and software that are not as good but just good enough. But for Apple, this approach just didn't work. Apple's key selling point has been that its devices and the software they run "just work". It's one of the reasons Apple has done so well in the smartphone arena and has dominated the tablet market.
Breaking that covenant by putting out such a lousy piece of software hurt the company more than it would like to admit. Apple apologized, and fired some of the people involved, but the damage was done. Apple's whole argument that it has to tightly control the hardware and software of its products to ensure quality was exploded once it became clear that it was pushing a duff product to suit its personal peccadillos.
Google, meantime, was sitting pretty. Globally, Android has far outpaced the sales figures of iOS, and Google announced work on an iOS 6 mapping app while expressing concerns that Apple wouldn't allow it. Eventually Cupertino did, and the results were depressing for Cook & Co: over 10 million downloads of the application in 48 hours and a significant uptake in iOS 6 upgrades once Google's mapping was available.
It would be wrong to attribute Apple's plummeting share price solely to the Maps fiasco – the stock market has been on a little bubble of its own and many fund managers got aboard Cupertino's bandwagon too late – but it had an undeniable effect. Users are now souring on Apple, and the rot may yet continue.
2013 is going to be a very interesting year for Apple – and for Google, and for RIM, and for HP, and for Facebook, and for many, many others. ®