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Microsoft Spending Big To Beat IBM

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The business market for software just became a little more heated, as Microsoft CEO Steve Ballmer announced a $500 million marketing campaign to try and boost Microsoft’s fortunes at IBM’s expense.

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Bill Gates has said he fears IBM much more than Google as a business rival. Microsoft added some emphasis to that point in New York, where Ballmer disclosed Microsoft’s latest attempt to bolster its business sales.

The Seattle P-I noted Google won’t be the target of Microsoft’s big push. Instead, the business market in general will see Microsoft attempt to gain in an area where its products have not performed as well as its cash cows Office and Windows.

Ballmer wasted no time calling out the sum of all Gates’ fears, IBM, in his New York chat with the media:

“IBM increasingly is a services company,” Ballmer told reporters. “That is what they are. At the end of the day, we are continuously a software company, believing in the power of software innovation and what it can do to empower people.”


IBM for its part thinks empowerment comes with software that works well:

Ken Bisconti, vice president for IBM’s Lotus Workplace software, took issue with Ballmer’s assessment.

“Obviously, Steve Ballmer is ignoring a fact that he knows very well, that IBM is the No. 2 software products company in the world today, with $15.8 billion in software revenues,” Bisconti said. “We’re a company that makes software products usable out of the box or off the CD or downloaded off the Web.”


Bisconti thinks Ballmer’s talk is “just thinly veiled window dressing for the upcoming Vista and Office products.” Both Office 12 and the Vista operating system are expected to launch in 2006. Vista has been delayed often during its development cycle, and Microsoft needs its successful debut to spur more OEM PC sales, for which Microsoft earns a licensing fee with each purchase.

Microsoft would not mind seeing its Exchange supplant Lotus Notes, or SQL Server nudge DB2 aside as it competes with those IBM products, the report noted. While much ado about Google and Microsoft has been made, IBM represents the true challenge to Gates, Ballmer, and Mini-Microsoft.

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David Utter is a staff writer for WebProNews covering technology and business.

Microsoft Spending Big To Beat IBM
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