Not many people dispute that Microsoft is the key driving force in the computer industry. Although it didn't release a major desktop or server operating system, it did make plenty of headlines for another reason: the protracted investigation into its business by government authorities. Our take: One cheer for the DOJ. If there is a company to rival Microsoft (either in terms of importance or in the sheer number of accusations of Machiavellian behaviour) it has to be Intel. In 1997, Andy Grove's paranoid androids shipped Pentium MMX, and, more importantly, Pentium II to stave off renewed competition from AMD and Cyrix. In 1998, if there is to be a suitable response to the anxiety of the PC industry, the corporate world and the general public, both Intel and Microsoft's methods of conducting business will merit careful attention. On a more prosaic note, the highlights of the year should be the release of Windows 98 (assuming NT 5.0 misses 1998) and Pentium II processors with speeds that close in on 500MHz. A company with potential beyond its current level of success is AMD. When the Californian chip maker released the K6 in the summer, it promised to be a real thorn in Intel's side. The failure to follow through by consistently delivering volumes of the part has hurt it but next year there is a chance for redemption, especially if it can ensure a smooth transition to the K6-3D, a processor with graphics handling integrated, and to notebook-capable versions of the K6. A similar principle exists for an even smaller company, Cyrix, which enjoyed some success, especially with its MediaGX integrated chipset and was acquired by National Semiconductor to provide the manufacturing firepower and hard cash it badly lacked. The challenge now must be to fulfil Nat Semi's vision and fertilise the next generation of set-top boxes and other low-cost devices. A company that made giant strides in 1997 was Cisco. Once seen as a somewhat dull back-end networking concern, CEO John Chambers has reinvented Cisco as the heartbeat of corporate intranets and a powerful acquisition vehicle with a clearly defined vision of where networking is heading. Another company with a similar story to tell is 3Com, which rounded out its portfolio by buying US Robotics. Both companies will chase the same rainbow: connected enterprises where IP becomes the vehicle for voice, video and much more. At Compaq, it has been a spectacular year marked by huge profits and huge acquisitions, notably that of super server maker Tandem. 1998 will be less about grabbing share back from direct sellers than moving onwards and upwards to take on the enterprise. That means selling more big tin and more inter-networking kit. Speaking of direct sellers and fabulous success, Dell continues its rise up the ranks of PC makers. This year, it took its cast-iron selling model into workstations. Next year, Michael Dell wants to make the Net the new portal to cut costs and sell more kit. For IBM, perhaps the most interesting challenge will be to cash in on an area which has been perhaps the talking point of the year: PC versus NC versus Net PC. Making its Network Stations and sealed PCs the perfect replacement for green screen environments will be the name of the game. This year's launch of the Network Station NC was a start. For Novell, 1997 was what optimists - and Novell executives - call a year of change. Loss after loss and management turnover hurt the firm but it is important to remember that the Utah firm retains $1 billion in cash. That means that for it to exert anything like the influence it had in its pomp, Novell must make acquisitions in the next 12 months. And, hopefully, there will be no repeat of the WordPerfect fiasco. Apple was another trying to put a brave face on it after a year in the news for all the wrong reasons, especially when boss Gil Amelio quit. The annus horriblis was relieved only by the second coming of Saint Steven and his preaching to the converted (and easily led Wall Street 'analysts') that sent Cupertino stock soaring. Over at Hewlett-Packard the wheels keep on turning without fear of a glitch at the incredibly successful printer and scanner divisions. In particular, HP showed that the all-in-one category can also become its property. HP is also back in a pretty big way in desktops and servers but mobile PCs is a gap that needs filling. The infant mini-notebook/wallet PC category is inviting. Finally, it was a fascinating year for Sun which had a memorable spat with Microsoft over - surprise - Java standards. Whether Sun has the tactics to fill out the potential of Java in the coming years will go a long way to deciding how corporate computing looks as we approach the millennium. More News | ZDNet