US$500 million for a marketing campaign.  It had to come from somewhere....

IBM, with a $90 billion-a-year business of selling technology to businesses, doesn't intimidate easily. Ken [B]isconti, vice-president for IBM Lotus Workplace products, calls Ballmer's speech a "thinly-veiled promotion" for the upcoming Windows and Office launches.

"Windows and Office attempt to prolong Microsoft's pre-Internet, proprietary, one-size-fits-all computing model," [B]isconti says. "We embrace open-technology standards, which give customers the ability to mix and match the technology they use." He also points out that while IBM offers a vast array of tech services, its $15.8 billion-a-year software business is second in size only to Microsoft's.

Indeed, while open-source software has mounted a serious challenge to Microsoft, IBM is the only company that can offer a wide array of software for large corporations that runs on both the server and the desktop. Its IBM Workplace products, launched two years ago, provide Internet-based applications designed for specific jobs in corporations -- from call-center operator to bank employee. Revenues for the Lotus unit, which includes most of the Workplace products, increased 10% last year.
The BusinessWeek article is a pretty straightforward on-the-spot reaction to yesterday's Ballmer bluster and the new MS campaign.  I suppose this is a better approach to chiding customers to upgrade than calling them "dinosaurs".

One of MS's key messages yesterday seems to be to emphasize that IBM is supposedly a services company.  IBM is also a US$15.8 billion software company.  Would it make sense if IBM started trying to paint Microsoft as a games manufacturer due to Xbox?  This is a silly attempt to create pure FUD.

Link: BusinessWeek: Microsoft's Enterprising Endeavor >

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