IBM fires back at Microsoft ad campaign

Microsoft kicked off a $500 million marketing push last week, and in the process singled out IBM as its main competitor. The so-called "people-ready" campaign touts Microsoft products as enabling business users to "realise their full potential."

The campaign is widely considered a curtain-raiser for the forthcoming Windows Vista and Office 2007 product releases.

At an event highlighting the campaign, Microsoft CEO Steve Ballmer took a shot at IBM. "We're staking out a position quite different than our leading competitor. That's IBM," said Ballmer. "...IBM is increasingly a services company. At the end of the day, we're a software company," he said, according to an eWEEK report.

"[Ballmer] made the statement that IBM is a consulting company. He avoided mentioning that IBM is the number two software company in the world with $15.8 billion in software business," said Ken Bisconti, vice president of IBM Lotus Workplace products.

Bisconti said there are over 125 million users of IBM's Lotus Notes and some 4,000 businesses use IBM's WebSphere portal. He claimed IBM has as many business e-mail users as Microsoft and that its Lotus software division grew by 10 percent last year.

Ironically, IBM may be Microsoft's largest collaborator. "We are arguably the largest ISV writing products that run on Windows—products like Notes Domino and WebSphere Portal," said Bisconti.

IBM also may be the largest deployer and maintainer of Microsoft products, through its Global Services division. IBM routinely signs outsourcing deals worth hundreds of millions of dollars, much of which involve deploying and maintaining Windows based PCs and servers.

Despite the close ties between the companies, Bisconti continued to return Microsoft's fire.

"We have a very diff view of how people are making people productive. Microsoft is trying to prolong a pre-Internet business model, the same one they were selling 20 years ago," Bisconti said.

"It's the fat client model. The customers we work with have moved to an open standards computing model where they demand choice. Microsoft is demonstrating a model that we don't think works.

"Not everyone is going to need a 500 megabyte fat client," Bisconti added.

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