While 2007 gave us some fantastic technological innovations, it also brought the usual spate of bungles, miscues, and faux pas. Since I believe that you learn more from your mistakes than your successes, it’s important to look at some of the most glaring errors that were made manifest in the business technology sector during 2007. There were a lot of opportunities for learning this year.

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10. HD DVD and Blu-ray repeat the VHS-Betamax blunder

While many mistakes are forgivable, the ones that involve wittingly repeating past errors are often greeted by the public with far less tolerance. That’s the case with the next-generation version of DVD discs. The original DVD consolidated around a single standard when it became a mass-market technology, but the next-gen DVD has forked into two camps, HD DVD and Blu-Ray — mostly because of greed and intense competition — and in 2007 both camps started releasing movies and players in their incompatible standards.

Toshiba, Microsoft, Intel, DreamWorks, and Time-Warner Paramount are lined up behind HD DVD, while Sony, Disney, Apple, Pioneer, Panasonic, Philips, and Fox are lined up behind Blu-ray. Numerous meetings were held in 2005 to try to come up with a single standard, but neither group would make enough compromises to appease the other — in fear of giving the other an advantage in what is expected to be a multi-billion dollar market. The ironic part is that all of this hearkens back to the video tape era that preceded DVD. In the 1980s there were two incompatible types of video tapes, VHS and Betamax. The battle lasted for years and ultimately resulted in the Sony-backed Betamax standard losing and many of the consumers who had bought those systems having to repurchase equipment and videos.

This battle also matters for business technology because it will affect the next generation of data discs — HD-DVD Rom and Blu-ray Rom. These discs will have capacity ranging from 15 GB all the way up to (theoretically) 100 GB. This will enable great portability of big files and big chunks of data, and could completely replace data tapes as a backup standard. For more on this topic, see the CNET Quick Guide: HD DVD vs. Blu-ray.

9. Red Flag Linux is exposed as a bargaining chip rather than a Linux victory

Earlier this decade, the Chinese government appeared to throw its support behind homegrown Red Flag Linux as a way to have full transparency and control over worker software and reduce dependence on U.S.-based Microsoft. At the time, Linux advocates such as Doc Searls were asking, “Is it possible that the top Linux distribution–at least for desktops–is Red…Flag? Given a combination of Chinese demographics and government encouragement, that may well be the case.” However, it was all a ruse.

The reality is that Red Flag Linux on the desktop never really took off in China, despite the government’s public support. Pirated copies of Windows have always ruled the day. As I wrote in Sanity check: How Microsoft beat Linux in China and what it means for freedom, justice, and the price of software, the fear of Red Flag Linux taking hold in China led to Microsoft to negotiate a deal with the Chinese government to give them a cut-rate cost on licensing and alleve their security and source code concerns.

Ironically, Linux on the desktop may be even less of a story in China than it is in the United States, where it’s less than two percent of the desktop market according to W3Counter.

8. eBay fumbles the ball with Skype

During 2005 and 2006 I knew more and more business professionals who were turning to Skype. At the time, Skype reported that 30% of its users were in businesses and I wrote about Skype’s moves to better serve businesses and IT departments. In the fall of 2005, eBay purchased Skype in a move that left a lot of people scratching their heads because there were no obvious synergies between the two companies.

I continue to use Skype, especially for video calls and international calls, but I cannot think of one significant new feature that Skype launched in 2007. After a great wave of innovation in 2005-2006, the product seems to have hit a plateau during a year when companies such as Microsoft and Cisco have been making huge moves in IP telephony and unified communications.

Skype was well-positioned to become a clear leader in unified communications, potentially even launching a new VoIP standard or an entirely new market category with UC-as-a-Service. If Skype had been bought by someone like Lucent, Nortel, Siemens, or even Google, we might have seen that happen. Instead, Skype is being marginalized as little more than a nifty little consumer VoIP application, and eBay appears to be stumped about what to do with it.

7. The Wall Street Journal teaches users how to sabotage IT

On July 30, The Wall Street Journal published an article “Ten Things Your IT Department Won’t Tell You” that provided tips on how users can circumvent their IT departments to install software on their PCs, visit blocked Web sites, save corporate files offline, access mail on contraband smartphones, and several other dangerous and irresponsible activities. I wrote a scathing criticism of this article in Sanity check: Did The Wall Street Journal sabotage businesses by publishing tips on how to circumvent IT?

I’m surprised the Journal didn’t publish a tip on how to break into the corporate data center, steal valuable servers, and then sell them on the black market for several thousand dollars each. Maybe they’re saving those tips for 2008.

6. Attackers take down e-mail servers at the Pentagon

In June, U.S. Secretary of Defense Robert Gates confirmed that attackers penetrated an unclassified e-mail server at the Pentagon and that the server had to be taken offline when the compromise was discovered. As a result, over 1,500 workers lost access to e-mail. Gates wasn’t one of them. When questioned by journalists, he admitted “I don’t do e-mail. I’m a very low-tech person.”

Almost immediately, there were reports that the source of the attack came from China, possibly even the Chinese Army. The Chinese government unequivocally denied the reports, saying that it was opposed to “any criminal acts undermining computer systems, including hacking.”

However, in September, Fox News ran a segment in which it claimed that it had information pinpointing China for the attack. National Security Correspondent Jennifer Griffith reported, “Military sources tell Fox that in June of this year Chinese hackers linked to the Chinese government broke into the Pentagon’s computers, breaching the firewalls in place to protect Defense Department computers from hackers seeking classified or operational plans. The breach in June was into unclassified computer email accounts in the Defense Secretary’s policy office.” Nevertheless, some media watchdogs have criticized the Fox report.

If anyone should be able to lock down their standard IT systems, it’s the national defense agency of the United States. If they are incapable of protecting such valuable data assets then it’s either a sad commentary on the state of information security or a strong indictment of that agency. I fear that it may be a combination of the two.

5. 802.11n can’t get its standards together

It’s already been a couple years since wireless vendors started offering “pre-N” and “Draft-N” wireless equipment that takes advantage of the next generation Wireless LAN technology, 802.11n. Promising longer range and much higher bandwidth (up to 300 Mbps) than previous versions of the wireless standard, 802.11n has been widely anticipated because of the widespread adoption of 802.11b and 802.11g, which provide solid network coverage but are limited in bandwidth.

The final release of the 802.11n standard has been considered “imminent” since 2006 and the official standard was expected to be only incrementally different than the various draft versions. As a result, many of the consumer-oriented vendors such as Linksys and Netgear have pushed forward with launching 802.11n equipment.

In 2007, numerous enterprise wireless vendors such as Cisco and Xirrus joined the party and decided to release 802.11n equipment with the promise of upgrading (via firmware) to the final version of N when it was ratified. While that may sound encouraging, the IEEE does not look like it will ratify 802.11n any time soon. The official release has been pushed back to late 2008 or early 2009. With so much pre-N equipment already on the market, it could become a serious compatibility nightmare when 802.11n does finally hit the market and become the predominant WLAN standard.

4. The iPhone doesn’t include 3G

Apple shook up the smartphone market with the June 29 launch of its iPhone. Last week, I placed the iPhone at the top of my list of The 10 most important business technology products of 2007. Even though the iPhone is not a great business smartphone because of its lack of mobile messaging support, it has jump-started the smartphone market in a major way.

As I’ve mentioned before, I think the most significant feature of the iPhone is that is the first smartphone to provide a usable Web experience. With its pan and zoom controls, it allows you to effectively access standard Web pages rather than having to access special mobile or text versions of Web sites. This is highly effective when using the iPhone in Wi-Fi mode, but when you have to switch over to the cellular network, the iPhone’s strong Web experience is rendered far less effective because the iPhone is limited to AT&T’s pedestrian EDGE network. Steve Jobs has stated that the iPhone wasn’t designed to run on AT&T’s faster 3G network because the 3G chips are power hogs. That was a big mistake because it severely handicapped the phone’s best feature.

Last week, AT&T CEO Randall Stephenson confirmed that a 3G iPhone is coming in 2008. Anyone that is considering buying an iPhone should put their plans on ice until the 3G version arrives.

3. Sun makes Java open source, but it’s a decade too late

I keenly remember when Sun introduced Java in the mid-1990s as cross-platform technology that would allow developers to “Write once, run everywhere.” In reality, the cross-platform dreams of Java didn’t quite pan out, as Java developers soon came up with their own pejorative version of the slogan: “Write once, debug everywhere.” Nevertheless, Java has morphed into a solid Web technology that has become popular with enterprises and huge Web sites.

On November 13, 2006, Sun began taking the first steps toward making Java an open source platform. On May 8, 2007, Sun released the Java class library, one of the final steps in opening up the technology. While the Java move is wise and admirable, it’s not nearly as significant as it could have been if it were done 5-10 years ago. If this move were done sooner, it could have potentially turned Java into a key Internet platform standard, uniting small Web servers and huge Web farms under a single Web platform Today, Java will have a tough time competing with the PHP/Apache lock on the low end of the Web development scale. Plus, you have Ruby also making inroads into this world. Java is arguably the strongest technology with better standards and the best libraries, but that may not matter at this point.

Ironically, Sun would have likely made more money by open-sourcing Java a decade ago and turning it into a Web platform around which it could have built an ecosystem of hardware, consulting, and training.

2. Windows Vista strikes out with businesses

As the most widely-hyped version of Windows since Windows 95, the expectations that Microsoft built around Windows Vista were monumental. Unfortunately, the product has not delivered. Despite some very creative marketing from Microsoft, Vista offers little to no incentive for businesses to upgrade. In fact, with its application compatibility and driver problems and the User Access Control debacle, there are significant incentives for businesses and IT departments to avoid Vista.

Microsoft has claimed that Windows Vista sales have been stronger than Windows XP during the same time frame after its launch and that revenue from Vista has helped drive Microsoft’s strong earnings in 2007, but I questioned the true meaning of those assertions in Sanity check: The truth about Windows Vista adoption in 2007.

Nearly all of the IT managers and IT consultants that I know are steadfastly avoiding Vista, and opinions of Vista among IT professionals in the trenches have gotten progressively worse throughout 2007.

1. TJX admits that 45 million customer records were compromised by attackers

It may be the largest and most expensive information security breach in history. On January 17, TJX announced that it had discovered a significant pattern of intrusions to its computer systems that exposed customer data. TJX ordered a full investigation, and in the months that followed it was revealed that the breach was due to an insecure wireless network and that 45.7 million customer accounts were compromised over a period of two years.

The total cost of this information security disaster could ultimately top $1 billion, and as more evidence is disclosed it could tell a disturbing tale of a new breed of attackers that are motivated by financial gain and well-connected with organized crime. Criminals used to rob banks “because that’s where the money is,” as famous robber Willie Sutton once said. In 2007, it became clear that many criminals now view digital systems as the most lucrative targets and that they have designed elaborate systems to quietly siphon money and steal identities for financial gain.

Are these the worst? Are there any of these that you think don’t belong on the list? Are there others that should have made the list? Join the discussion.