IBM, which has been quietly positioning itself as a consulting company for years, once computers starting to become commoditized, is now being targeted by Microsoft Corp. which is attempting to sway businesses to conintue on with desktop software rather than the rapidly growing popular Web-based applications, that in many ways aren't tied in with Microsoft's Windows operating system.
Microsoft announced that they are budgeting $500 million at this specific effort against IBM. The money will be spent over a period of a year for the purpose of expanding its sales force and ad campaigns. According to Jeff Raikes, the president of the business division, this is the largest business-related marketing operation that Microsoft has ever undertaken.
Steve Ballmer, Microsoft CEO said that "People will look to Microsoft and they will look to IBM for leadership in business technology, they are the competitor."
Steve Ballmer, Microsoft CEO
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For the most part, IBM and Microsoft don't have direct competitive products and services, but in this case it is a conflict over the future of software that is at stake.
Along with a number of Web 2.0 companies, IBM sees a world where software will be Web-based and to a lessor extent open-source software, where the inner workings of it are made accessible to other users to tinker with. IBM prefers this scenario as it will profit from its great strength in its consulting and services business.
Microsoft, in contrast, have nothing of a consulting side of the business and of course must push hard for its proprietary software, where the inner workings aren't revealed to others, to be the intigator of innovation in the years ahead. Because the bulk of their money is made on these products, Windows and Office business suite, they must look at this as a survival battle.
So the battle that has been raging for a while, is not going to be fought in the open with IBM and Microsoft being the proxies. Ballmer added that "IBM is increasingly a services company ... and we are, at the end of the day, a software company."
IBM's vice president for the Lotus Workplace division Ken Bisconti, takes issue with Ballmer's statement as he reminds us that IBM is not only a consulting company, but is also the 2nd-largest software company in the world.
He adds that "Windows and Office are attempting to prolong a pre-Internet, proprietary, one-size-fits-all computing model which we do not see the market adopting."
This is going to turn into, and already is, a not-down-drag-em-out fight. They are already trying to win the hearts of consumers by revealing what their visions of the future are. In a way it is actually refreshing because their is no uncertainty which way each company wants to go, now we the consumers of these products, services and visions, must decide with our dollars, who's going to take us forward.
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