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Ballmer also used the event to launch an attack on IBM by
saying that corporations were unnecessarily paying huge money to IBM for value
that could be obtained from Microsoft’s products.
Ballmer said that companies should be empowered to solve their problems by
themselves rather than through a complex service project model like IBM’s, which
was costly due to the consultants involved and loss of control as a result of
outsourcing.
Jeff Raikes (Raikes), president of Microsoft’s Business Division, said, “It’s a
very different vision compared to IBM, which views people and IT as
non-strategic assets to be outsourced and replaced by consultants. We think that
people are more important than processes, than systems, certainly than permanent
outside consultants.”[2]
Later, IBM countered Ballmer’s remarks, when Ken Bisconti (Bisconti), Vice
President of workplace, portal and collaboration products, IBM said, “In terms
of saying IBM is out of touch with end users, (Ballmer) is trying to purposely
deceive the audience. As a large computing concern with a software component,
including Lotus, we have been delivering technology that faces end user for ten
years.”[3]
Bisconti also dismissed the remark that IBM was not a software product company
by saying that IBM had revenues of US$ 15.8 billion in 2005 on software
products, which was second only to Microsoft. He further added, “Windows and
Office attempt to prolong Microsoft’s pre-Internet, proprietary,
one-size-fits-all computing model. We embrace open-technology standards, which
give customers the ability to mix and match the technology they use.”[4]
Analysts felt that Microsoft had clearly set its sights on Big Blue’s lucrative
services business, whose global revenues were US$ 47.4 billion for 2005. This
was around 52% of IBM’s overall 2005 revenues. But analysts felt that for all of
Ballmer’s claims, it would not be easy for Microsoft. The source code for
Microsoft’s products was not available in public domain like its open source
rival Linux.
Therefore it was not possible to easily integrate Microsoft’s products with
other software platforms and technologies. This would seriously limit the
choices available to corporate customers, where they had to choose between
Microsoft to provide their entire software or a wide variety of vendors to
fulfill their software needs.
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To download this micro case study (No. MCMK0003 ) click on the
button below, and select the case from the list of
available micro cases:
[2]
Alex Woodie, “Microsoft Positions its Products as People Friendly,” http://www.itjungle.com, March 22, 2006.
[3]
Martin LaMonica, “IBM to Microsoft's Ballmer: We know end users, too!” http://news.com.com, March 17, 2006.
[4]
Steve Hamm, “Microsoft Enterprising Endeavor,” www.businessweek.com, March 17, 2006.
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