Microsoft plans to spend $US500 million over the next year trying to persuade businesses to use its software rather than hire International Business Machines consultants.
Microsoft chief executive Steve Ballmer showcased forthcoming versions of the company's Microsoft Office and Windows Mobile computer systems, which are being tested by some businesses now and are expected to be widely available later this year.
Ballmer said the new software allows companies to let their employees perform tasks that they may now be paying IBM's huge services operation to handle.
"Getting the most out of their people is on the mind of every business leader I speak with," Ballmer said. "(We) are passionate about the idea that the right software can provide the tools to empower workers to become the drivers of business success."
The company said that new software systems like the Vista operating system and the Sharepoint website scheduling system, as well as the updated Office suite of applications including word processing and email programs, were the result of $US20 billion in research and development spending over three years.
These kinds of software and software-based services are tools to help employees be more successful, added Jeff Raikes, president of Microsoft's business division.
"Innovation is home-grown, it's not outsourced," he said. "IBM has an army of relatively expensive consultants. They enable their people to run your business. We enable your people to run your business, not take our people to run your business."
IBM responded in astatement: "Microsoft's marketing campaign -- you can't really call it a strategy -- is Window dressing for a pitch to keep a one-size-fits-all, proprietary Windows world.
"This is a product-driven, instead of a customer-driven approach. It's clear our survey of some 700 CEOs indicates that business process and business model innovation is what matters most to clients, and that can't be achieved by another proprietary piece of software."
Microsoft dominates the market for software installed on a computer's hard drive with its Windows operating system and its Office business application franchise.
But a host of competitors are challenging the company with services and software that receive automatic information updates via the Internet.
Gartner analyst Tom Austin said Microsoft delivered a "good campaign message" that showed that its services can compete with those rivals, but said the company still needs to spell out its plans further.
"They have some good products. But I was hoping to hear a more intelligent discussion about what kind of help these people need to discover opportunities and innovate," he said.
Chairman Bill Gates, said "IBM has always been our biggest competitor."
IBM, which offers computer services, software and hardware, poses a challenge to Microsoft in defining how web services will work together in the future.
Microsoft eyes-off IBM's business
By Franklin Paul on Mar 17, 2006 12:03PM