April 14, 2003 11:19 AM PDT

IBM takes simple aim at Office

IBM is preparing a slimmed-down alternative to Microsoft's ubiquitous Office suite with a set of applications that run on corporate Web servers.

The business productivity applications are comprised of word-processing, spreadsheet andco e-mail software--features that are also part of Microsoft's package. But IBM said its applications are not intended to go head-to-head with the advanced features of Office.

Instead, the company is aiming at what it says is a large percentage of people who do not use the full set of capabilities in Microsoft Office, said Larry Bowden, vice president for portal solutions and Lotus products at IBM. The applications, announced in November and due in the second quarter of this year, are for companies that need to do simple e-mail, text-editing and spreadsheet work.

However, the applications will not be sold alone. Rather, IBM will bundle them with its WebSphere portal server software.

Microsoft dominates the market for desktop productivity applications, commanding 90 percent of the corporate market, according to analysts. But a shift in the company's Office licensing terms last year has met with resistance from some customers who figure that the cost for Office will go up. Microsoft is preparing to release Office 2003, expected for release this year, with a number of advanced features for corporations.

Microsoft foe Sun Microsystems has sought to capitalize on any Microsoft Office price discontent with StarOffice, which Sun positions as an alternative to Microsoft Office.

IBM competed directly with Microsoft Office during the mid-1990s when it purchased Lotus Development in 1995, but it eventually dropped its PC office software, Lotus SmartSuite. IBM's current strategy differs from its previous effort to erode Microsoft's dominance, according to IBM executives.

IBM executives said the company is designing its software with the notion that corporate customers do not use the advanced features in the latest versions of Microsoft Office.

"There will always be 10 to 15 percent of people who need the full mail, spreadsheet and document-writing capabilities. The other 85 percent don't want to pay a huge fee for features for which they are now forced to pay," Bowden said recently.

A Microsoft representative said the Office suite is a value to businesses because it improves productivity and is easy to use. The spokesperson added that PC users have become accustomed to full-featured applications.

"This is for people who are looking for a lighter-weight approach," said Amy Wohl, president of consulting firm Wohl Associates. "(IBM's office applications) are not designed to compete with Microsoft like Sun is doing with StarOffice."

The office applications, which are being developed in the company's Lotus division, are part of IBM's NextGen strategy for revamping its Lotus products. The first product of the NextGen plan was a lightweight e-mail client called IBM Lotus Workplace Messaging aimed at people who use e-mail on a limited basis. The forthcoming office applications will also have the Workplace label, according to IBM executives.

On top of basic capabilities, IBM intends to add a simple document-management tool, said Ambuj Goyal, the general manager of IBM's Lotus software division.

"It is our view that business documents ought to be done from the server side with proper check-in (and) check-out, and that you need very simple capabilities to do the kinds of things that need to get done," said Goyal.


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