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Using OpenOffice.org to Beat MSFT in Other Markets

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I just read the JS post about the continuing rise of OpenOffice.org.

Why do vendors like Sun, IBM (officially now), Google, etc. support OO.o? Well, providing customer choice and openness are two of the key reasons quoted. These are definitely great reasons that we all want to see OO.o succeed.

Most vendors backing OO.o compete with Microsoft in markets other than Office Productivity software. So, what about the competitive benefits for vendors supporting OO.o? Let’s face it, $1 diverted from MS Office could become $0.70 diverted from the budgets of Microsoft’s other business units.

Here’s a look at Microsoft’s 2006 FY financials by reporting division:

- MS Office is inside of “Information Worker”

- MS Windows Client operating systems are inside of “Client”

- MS Windows Server operating systems are inside of “Server & Tools”

- MS SQL Server is inside of “Server & Tools”

- MS Ad revenue is inside of “MSN”

When you look at the operating margins of Microsoft’s business units, it’s quite easy to see why attacking MS Windows profits with Linux and MS Office profits with OO.o is the strategy of choice for vendors that compete with MS in other markets.

PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

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