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Signalling an end to the era of the software growth stock, cash-rich Microsoft broke ranks with most of its peers by saying it would start paying annual shareholder dividends. Other software companies were expected to follow its lead. While not unprecedented - most New York Stock Exchange-listed IT companies have traditionally paid dividends - the move was seen as a fresh sign that the software industry was reaching maturity.

French software company MandrakeSoft, developer of one of the most popular distributions of Linux, sought bankruptcy protection from its creditors after the apparent failure of a public plea over the Internet for $4 million. The company has struggled to break into the enterprise market, held back by weak partnerships and management changes. But it will continue day-to-day operations, and plans to release its next product, Mandrake Linux 9.1, as scheduled in April.

Database software company Oracle, bidding to strengthen its hand in the portal market, made improvements to its 9i Application Server product that will enable users to easily integrate information from web services and spreadsheets into their portal applications.

SAP unveiled a platform for running and integrating web services applications. It claimed 'NetWeaver' was the biggest leap forward in its technology for a decade. Critics suggested that many of its components were taken from other SAP products and suggested its lasting significance will be in enabling SAP to exercise greater control over customer accounts. In any case, the existing tactics seemed to be working: SAP said licence sales and margins had held up much better than expected in 2002.

Systems vendor Sun Microsystems reported its biggest ever quarterly loss - more than $2 billion - after writing off some bad acquisitions and paying restructuring costs. Sales also fell 6%. "Overall, our balance sheet is very strong," said Steve McGowan, Sun's glass-half-full chief financial officer.

Business intelligence software supplier Cognos ditched most of its own financial planning software and replaced it with code from Adaytum, the enterprise performance planning software vendor it acquired in December.

Microsoft sought to lessen confusion over the increasingly wide-ranging scope of its .Net brand by saying it would attach the .Net logo only to software that contained the web services technology. At the same time, it released the first version of its customer relationship management software product in North America - the first full application built on .Net - and confirmed plans to unveil the next version of its Windows operating system, called Windows Server 2003, and launch a new version of its Visual Studio .Net 2003 application development suite, in April.

Strong demand among enterprises for its anti-virus, firewall and vulnerability management products and services helped Symantec grow revenue by 29% in its third quarter to the end of December. Enterprise sales were up 26% and accounted for 42% of overall revenue. The company also did well in the consumer sector.

Hewlett-Packard regained its position as the world's leading PC maker from Dell Computer in the fourth quarter of 2002, according to analyst IDC, shipping 120,000 more computers than its rival. Total market shipments grew by a relatively healthy 4%.

IBM said it was cutting the price of its iSeries servers - the mid-range systems formerly known as the AS/400 - by up to 80%. Sales of the iSeries fell 13% in 2002. Performance elsewhere at IBM seemed healthier. In a separate announcement, the technology giant said it ended 2002 with quarterly revenue up 7%, helped by strong takings at its services business. More of the same was predicted for 2003.

Graham Wallace, beleaguered CEO of Cable &Wireless, finally bowed to shareholder demands to step down after his bid to transform the venerable UK phone company into a fast-growing data services provider went sour.