The company plans to steal market share from Office by giving away its software to anyone who wants it. But it\u2019s not IBM that should have Microsoft worried.<\/p>\n
Few people will remember this but in the second half of the 1980s, Microsoft and IBM, today arch rivals, worked closely to build a new operating system meant to replace the command line-based DOS. Known as OS\/2, it was an advanced (for the time), graphically driven operating system. But by 1990, the relationship between the two companies had broken down.<\/p>\n
There were serious cultural differences and disagreements over strategy. Also, Windows, Microsoft\u2019s graphical front-end for DOS, had begun to take off. Soon, the company began work on a next-generation operating system, known as Windows NT, which competed directly with OS\/2. In 1990, Microsoft walked away from IBM. By the mid-1990s, with the release of Windows 95, OS\/2 was all but dead and Windows quickly went on to become the pre-eminent operating system for PCs.<\/p>\n
The fall-out led to rivalry between IBM and Microsoft, which continues to this day. IBM is a big backer of Linux, the open-source rival to Windows. And in recent months it has been actively lobbying to have a new Microsoft-designed document file format, known as Ecma Open XML, blocked from ratification as a standard by the International Organization for Standardization. IBM is punting a rival to Open XML, the OpenDocument format.<\/p>\n
But a new move last week by IBM looks set to escalate the tensions with Microsoft. The company has announced that it is developing a new office suite, with word-processing, spreadsheet and slide presentation components, that will compete head-on with Office. Known as IBM Lotus Symphony, the suite is still in test, but available for downloading.<\/p>\n
Symphony is a direct challenge to one of Microsoft\u2019s most successful businesses. In the year to June 2007, the Microsoft division which develops Office reported an operating profit of US$10,8bn on sales of $16,4bn, delivering a staggering profit margin of 66%. Office, which sells for up to R5 000\/copy, has at least 80% of the market.<\/p>\n
IBM has been in the commercial productivity software business for more than a decade following its 1995 acquisition of Lotus Software. Lotus developed the spreadsheet, 1-2-3, in the early 1980s and later introduced Lotus Notes, a popular program for collaboration between office workers. But Lotus has failed to make a dent in Microsoft\u2019s dominant market share.<\/p>\n
Now IBM is making an effort to tackle Office with a product priced to compete: Symphony is free of charge. Given IBM\u2019s widespread access to large companies, analysts say the company could partially displace Microsoft Office among corporate customers.<\/p>\n
It still has a lot of work to do, though: the first test version of Symphony is slow. It hogs system resources and is not as feature-rich as Office, or even the free OpenOffice.org, on which it is based.<\/p>\n
As competition between IBM and Microsoft escalates, it\u2019s ironic that bloated PC-based productivity suites such as Office and Symphony could soon make way for Web-based alternatives. Google is developing an online office suite known as Docs & Spreadsheets. It lacks some of the functionality found in PC rivals, but most people don\u2019t need it. Google offers a rudimentary word processor, a spreadsheet and, as of two weeks ago, a presentation tool that competes with PowerPoint.<\/p>\n
But now the Web giant is planning a corporate version of the software, Google Apps for Your Domain, which will offer companies enterprise-level word processing, spreadsheet, calendar, e-mail and instant messaging software. The Microsoft-IBM rivalry could soon be a sideshow.<\/p>\n