IBM Takes Dead Aim At Microsoft Office With New Notes Version

The new version of Notes will include a built-in office suite complete with word processor, spreadsheet and graphics program. Microsoft has good reason to be concerned.

May 18, 2006

3 Min Read
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You haven't heard much of an IBM/Lotus-Microsoft rivalry in recent years, because there hasn't been one. But in days of computing past, there were some sizable battles between the companies. There was OS/2 versus Windows, Microsoft Word versus Lotus Ami Pro, Microsoft PowerPoint versus Lotus Freelance, and Lotus 1-2-3 versus Microsoft Excel.

We all know who won those battles. Microsoft Office thrives, while Lotus desktop applications are a thing of the past.

But now IBM is taking dead aim at Microsoft again, this time at Microsoft Office, one of the company's cash cows, but which hasn't been generating as much cash as Microsoft would like.

The new version of IBM Lotus Notes will incorporate built-in editors for the first time, aimed at competing directly with Microsoft Office. Lotus Notes will include a word processor, spreadsheet, and presentation graphics program, all targeted at competing with Microsoft Office.

This means that if someone wants to create a word processing document, say, he won't need to launch Microsoft Office. Instead, he'll use the word processor built directly into Notes.Just as important, the editors can all save and open documents in the open source OpenDocument Format (ODF), as well as in Microsoft Office formats. Microsoft Office doesn't support ODF, and Microsoft is doing everything it can to fight off acceptance of ODF as a standard.

ODF is a bigger deal than you might realize. For example, the executive branch of the Commonwealth of Massachusetts will require that all of its documents be stored in an open source format next year --- and ODF is one of those accepted formats.

Microsoft has been lobbying to get its Office formats approved as an open standard, but that hasn't happened so far, and it most likely won't happen by the time Notes ships. And Microsoft has refused to alter Office so that it can handle ODF.

That means that if things stay as they are, Notes would be allowed to be used in Massachusetts' executive branch, but Office wouldn't.

Massachusetts will not be alone in this. Expect other government agencies to follow suit. And where government agencies go, private enterprises often follow.

The stakes are substantial for Microsoft in this. The Boston Globe reports that Microsoft's Information Worker unit, which produces Office, accounted for more than half of Microsoft's $14.5 billion profit last year.In addition, ITWire says that Office revenue growth has pretty much stalled, and is up an anemic two percent for the first nine months of this fiscal year compared with the last fiscal year.

No one expects Notes to supplant Microsoft Office; it's a comprehensive collaboration platform, not an office suite. So companies will not be comparing Office versus Notes head to head.

But that doesn't mean that Microsoft doesn't face potentially serious problems when the new release comes out. If Notes includes what is in essence a built-in office suite, why pay the up to $400 that people pay for Microsoft Office?

With the Notes release, expect some enterprises that use Notes to begin to abandon Office.

It's unlikely that the new built-in application suite will attract a great deal of new business to Notes. More likely is that it will help Notes keep its existing user base. And if it can do that, while cutting into Office use, IBM will have a big success on its hands.0

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