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Microsoft Sees IBM as Biggest Threat 328

Posted by Zonk
from the steve-jobs-chuckles-quietly dept.
Anonycat writes "Bill Gates gave an interview at the Consumer Electronics Show, claiming that IBM is the rival company Microsoft has their sights set on. From the article: 'People tend to get over focused on one of our competitors ... We've always seen that ... I'm never going to change the press' view about what the cool company to write about is. That's Google number 1 and Apple number 2 ... [IBM has] four times the employees that I have, way more revenues than I have.'"
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Microsoft Sees IBM as Biggest Threat

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  • by ackthpt (218170) * on Thursday January 05, 2006 @12:57PM (#14401842) Homepage Journal

    Begging Bill's pardon, but Microsoft's attitudes and practices are their own biggest threat.

    Over the years, Microsoft's biggest threats have been:

    • Apple Computer
    • Sun
    • Java
    • Netscape
    • Anyone who knows of a security hole in one of their operating systems.
    • Oracle/Larry Ellison
    • U.S. District Judge Thomas Penfield Jackson
    • Linux
    • The European Commission
    • Sony Playstation
    • Google

    I've heard Bill talk at a CES a few years ago and between the words, you could most definitely hear him placing Microsoft as not a technology partner to consumer electronics firms, but as a direct or indirect threat to their product lines and/or ways of doing business. While he waxed enthusiastic about how Windows CE would be some great enabling force, you could almost hear people break out in a sweat wondering what "Microsoft-tax" they would encounter to hop on or compete with the Redmond bandwagon, whether it actually added anything truly positive. I'm positive more than a few show exhibitors could almost see him in a pinstripe suit with a couple gunsels behind him and a moll on his arm.

    <James Cagney Voice>
    "We're the new business men in town, see? And you're going to like doing business with us, see? Because when you do business with us nobody gets hurt, see? Yeah. I think you do see. That's very good. Very good for business."
    </James Cagney Voice>

    Bill most likely sees threats to his company because he cultivates them. Microsoft has profited at IBM's expense for the past 20 years. Why shouldn't IBM be competing with Microsoft?

    "We have met the enemy and he is us." -- Pogo

    • by dc29A (636871) on Thursday January 05, 2006 @01:09PM (#14401988)
      Begging Bill's pardon, but Microsoft's attitudes and practices are their own biggest threat.

      While that's true to an extent, I think it's open source and innovation. Google innovated with search engines, now it's a word. IPod is almost a word, a huge trend. Open Source is an ideology. You can't fight ideologies and words from dictionnary. Open Source + Microsoft's reluctance to change their business model + lack of innovation on their part will be it's ultimate undoing.

      Then again, that won't change jack in the big scheme of things. Yesterday was IBM, the big Monopolistic Empire of Evil(tm), today is Microsoft, tommorow it will be (fill in the blanks).
      • While that's true to an extent,

        Microsoft never had to work hard for the money. Everyone jumped on the Windows/Office bandwagon. Not necessarily the best product, but everyone else was doing it, like a bunch of lemmings.

        Look at Windows. How it is set up, how you install software, what safeguards there are. If you ever had worked on a mainframe computer and knew the kernel inside out, and knew good shop practices, you would be shocked and appalled that businesses have so readily adopted this ridiculous

        • by AKAImBatman (238306) <akaimbatman&gmail,com> on Thursday January 05, 2006 @01:37PM (#14402255) Homepage Journal
          Microsoft never had to work hard for the money. Everyone jumped on the Windows/Office bandwagon.

          That's just simply not true. Microsoft has worked it ass off to convince the public it needs what its selling. That's been particularly difficult as Microsoft products have traditionally not been very innovative. So Microsoft has taken the tack of marketing the heck out of their product, and crushing the competition in the process.

          Take the matter of the VisiOn GUI. Microsoft had nothing to compete. Zip, Zilch, Nada. So they see this VisiOn and realize that they'll soon be irrelevant. To counter this threat, Microsoft annouces that they will be releasing a product known as "Windows" Real Soon Now(TM). Everyone then puts off purchasing VisiOn while Microsoft goes and makes something up. Microsoft is late shipping (since they didn't actually have a product), and ends up bleeding Visi-Corp out of the market. Microsoft then delivers a steaming pile of software known as "Windows" which gains absolutely no foothold on the industry up until the point where it copies the Macintosh. Poorly.

          Windows was then scheduled for demolition right up to the point where a couple of smart guys saved the company by getting Windows to run in 32 bit mode. Microsoft throws their marketing muscle behind this new version of "Windows", and the rest is history.

          So in summary, Microsoft may be a lot of things. But lazy isn't one of them. Always give the devil his due, or you may get complacent.
          • Microsoft never had to work hard for the money. Everyone jumped on the Windows/Office bandwagon.

            That's just simply not true. Microsoft has worked it ass off to convince the public it needs what its selling. ... So in summary, Microsoft may be a lot of things. But lazy isn't one of them. Always give the devil his due, or you may get complacent.

            I never said they were lazy, I said they never had to work hard for what they got. They issued Windows 95 and the rest is history.

            "you make a grown man cry"

            In

          • Everyone then puts off purchasing VisiOn while Microsoft goes and makes something up.

            Why would they do this if they had not already jumped on the MS bandwagon?

            Windows was then scheduled for demolition right up to the point where a couple of smart guys saved the company by getting Windows to run in 32 bit mode.

            Um... OS/2? Those guys?

            So in summary, Microsoft may be a lot of things. But lazy isn't one of them.

            He didn't say they were lazy... he said they never had to work hard.

            And... doing a lot of work isn't t
      • by Pxtl (151020) on Thursday January 05, 2006 @01:24PM (#14402125) Homepage
        Speaking of Words, you notice the inverse relationship? Word, Excel, Windows... MS turns dictionary words into trademarks, while their competators do the opposite.

        And of course Microsoft's enemies will be talked about - that's what Microsoft does, they fight. They move into an industry with established technology companies with the expressed purpose of taking it over by dumping wads of development cash into it and making their product tightly interoperable with the rest of the MS family. Microsoft moving into a new niche is a full-fledge onslaught to everyone else in that niche. No wonder they're famous for their enemies.
        • and making their product tightly interoperable with the rest of the MS family.

          That is exactly the strategy of IBM, at least in the java world.

          Look at the Websphere family - portal, content management, business integrator, etc. They are all supposedly standards compliant, but try to use any of them with any other standards compliant software. And have fun trying to get them to support Websphere running on any jvm besides theirs.

        • Word, Excel, Windows... MS turns dictionary words into trademarks, while their competators do the opposite.

          If I understand you correctly, I can think of a few counterexamples:

          Powerpoint, Outlook, MSN (Messenger), Hotmail.

          And on the Apple side, a lot of their apps are named just what they are:

          Mail, Calculator, Address Book, etc.

          I think it goes both ways.
        • Erm... Apple and Sun come to mind as non-MS companies doing the same thing... at least MicroSoft is itself a non-dictionary name!

          IBM has the "Chicklet" keyboard on the XT, which was funny if you like the Adams Gum.
          DEC made the Rainbow.
          Apple also made a PEAR. Not to mention the Lisa.
          Coleco made the Adam.
          Commodore is a naval rank... plus the Amiga is a friend. Hmm.
          My cousin had an Odyssey video game system growing up.
          How about Oracle?
          Java?
          Acrobat by Adobe?
          Opera??
          Oh, and bever mind the Palm Pilots!

          It's hardly
      • by Anonymous Coward
        Yesterday was IBM, the big Monopolistic Empire of Evil(tm), today is Microsoft, tommorow it will be (fill in the blanks).
        Google.
    • This reads more like a "People to Kill List"

      Boy am I glad I called that guy!
    • Edward G. Robinson (Score:4, Informative)

      by xtermin8 (719661) on Thursday January 05, 2006 @01:46PM (#14402364)
      Ed G Robinson was the classic gangster voice of the movies. Cagney did a gangster in "White Heat" (Look ma...Top of the world) But Robinson was the one imitated in Bugs Bunny cartoons that most people are familiar with.
      http://en.wikipedia.org/wiki/Edward_G_Robinson [wikipedia.org]
  • Could be true (Score:4, Insightful)

    by bblazer (757395) * on Thursday January 05, 2006 @12:59PM (#14401864) Homepage Journal
    I can see Gates' point. If IBM continues to flex its muscle with OSS and releasing IP for OS use, it could have a very negative affect on Microsoft. But on the other hand, dismissing google is just FUD.
  • by AKAImBatman (238306) <akaimbatman&gmail,com> on Thursday January 05, 2006 @01:00PM (#14401873) Homepage Journal
    Really! See the big shiny thing! Yes, ignore those other things. They're new, small, and boring. The Gigantasaurous Rex over there is the REAL threat! What's that? It's not moving you say? That's because it's... um... conserving its energy. Yea, that's it! It's like a crocodile. The moment you get too close, SNAP!

    So look over that way. And pay no attention to the man behind the curtain.

    (Sure Bill, we're all going to listen to you. *rolls eyes*)
    • Sure Bill, we're all going to listen to you. *rolls eyes*

      That's the thing. When Bill speaks at these shindigs, everyone listens. I was lucky to get a seat when I was there. I don't think people go to see what great marvels he and his people behind the curtain have rigged up (and whether or not it will fail most spectacularly at the worst moment [blame it on cell phones, nobody in a real business environment is going to have those] *snicker*) They go to hear whether or not Microsoft is going to make a

      • So Bill identifying IBM as his chief competitor is really a part of a smoke and mirrors game? Yeah, that's consistent with his past behavior.

        So who IS Microsoft's most significant competitor? The Apache group? They've been encroaching on Microsoft turf for years, and just seem unstoppable. The Firefox people? They've only recently made any kind of dent in Microsoft's market share, but it has been a pretty big dent, and it is still getting bigger. How about OpenOffice.org? I've not seen any figures about m

        • Could it be that FOSS is Microsoft's chief competitor?

          Given IBM's use of FOSS and policies regarding OSS, if FOSS is the biggest MSFT threat, then IBM might just be their biggest competitor. People are thinking it was Google that was the threat, but they're keeping just enough of what runs Google Mail, Maps and Search private that they're not as big of a threat as a company that's not only constantly improving and adding to FOSS, but also marketing FOSS-based services and solutions to Microsoft's clients.

          I

  • Revenue (Score:4, Insightful)

    by GoatMonkey2112 (875417) on Thursday January 05, 2006 @01:00PM (#14401879)
    They also have way more expenses than Microsoft from what I've heard.
  • by majjj (644070) on Thursday January 05, 2006 @01:01PM (#14401884) Journal
    I mean... how can he expect anyone to believe this. Just a month ago in an Television interview he accepted google as its main RIVAL in the coming times because of its high number and quality of innovations. He also vowed to beat google out of search engine market... I guess Bill is having Nightmare... amnesia these days.
  • by Anonycat (905015) on Thursday January 05, 2006 @01:02PM (#14401903)
    From page 2 of the article: Also, IBM -- along with Toshiba Corp. (6502.T: Quote, Profile, Research) and Sony -- has developed the Cell microprocessor that will power Sony's PlayStation 3 video game console, a competitor to the Xbox 360, Microsoft's next-generation gaming unit. Who makes the chips for the Xbox360, again?
  • Oh noes! (Score:3, Funny)

    by BlueScreenOfTOM (939766) on Thursday January 05, 2006 @01:02PM (#14401908)
    (Sorry, this is required by law) ...meanwhile, Steve Ballmer as vowed to Fucking Kill (TM) IBM and all its partners.
  • Is there any reason to think that there's a correlation between who he says is the biggest threat and who he thinks is the biggest threat? I can see a lot of reasons to lie about this.
  • by Anonymous Coward on Thursday January 05, 2006 @01:05PM (#14401937)
    After you sell the big iron to run those enterprise apps, all those consultants are used to do that seemless integration and support. And those are billable long after the box is paid for. I suspect a significant number of IBM employees and revenues come from that. Is MS planning on becoming a service organization or selling big iron?
    • by argoff (142580) on Thursday January 05, 2006 @01:21PM (#14402098)
      Agreed,
      IBM is a hardware and services company, Microsoft is a proprietary software vendor. If you want to maximize your profits from service standpoint, the best route to go is to have a non-proprietary infrastructure ( like Linux .... hint ) so you don't bet bogged down with license costs while you get the maximim value for your service expenses. The consultants who got nailed during the dot com crash have already learned that lesson the hard way. Both Linux and MS professionals got nailed hard, but the Linux experts recovered while the MS ones never really did.

  • by CodeShark (17400) <<ellsworthpc> <at> <yahoo.com>> on Thursday January 05, 2006 @01:08PM (#14401979) Homepage
    Reasons?
    • Perhaps because IBM has already successfully defended Linux from SCO?
    • perhaps because IBM plays nice and has donated massive amounts of code to the OSS world?
    • perhaps because IBM is comfortable with Novell, offering the only real competitor to Win NT networking?
    • Perhaps because IBM offers a strong competitor to SQL Server, AKA DB-2, with a full stack including the web sphere stuff, etc. that doesn't need any MS components to run?

    In other words, where Microsoft's bullying business tactics don't have a way in? What think ye all?
  • by Ucklak (755284) on Thursday January 05, 2006 @01:09PM (#14401984)
    Bills biggest threat is Chuck Norris.
  • This makes them something of a double threat. IF MS takes out IBM, they're probably gonna trash Linux with the bundle. IBM's support gives Linux a good deal of respect in the business world.
    Then there's google.... Also a Linux user/proponent.
    And apple insists on using Open Source (BSD) too....

    So Microsoft's top-3 opponents are Open Source friendly companies.

    See a pattern there?

    • by hellfire (86129)
      IF MS takes out IBM

      This is an interesting statement. Not only is it absurd to think that anyone will "take out" IBM any time soon (IBM has weathered lots of storms, and has adapted to every one of them) this mentality is very common when talking about Microsoft.

      Balmer wants to kill Google. darkonc talkes about taking out IBM. This is legal business, not the mafia. Microsoft is out to go after competition and kill it in order to win all the chips. Others might think about wanting to kill their competiti
    • So Microsoft's top-3 opponents are Open Source friendly companies

      Perhaps there is a pattern, but I don't know that we are drawing the same conclusion:
      I think Google chose it's software based on an extreme need to customize and control their environment; They are not in the software sales/distribution/consulting game, and OSS offered them a stable vehicle with which to kick-start their development.
      Of the three, I think only Apple and IBM are direct competitors, and I think their decision to use OSS come

  • Envy (Score:5, Interesting)

    by oGMo (379) on Thursday January 05, 2006 @01:10PM (#14401998)
    "[IBM has] four times the employees that I have, way more revenues than I have."

    And people wonder why we have a problem with happiness. This sort of envious greed is the main problem with Microsoft, and it looks like it goes all the way to the top.

    • by theCat (36907)
      That whole "micro" and "soft" thing? I hear that now they have pills for that.

      While I appreciate your point, Bill's biggest problem probably isn't envy as much as frustration that his company still hasn't become a recognized world power. MS might indeed operate on a par with the Standard Oil of the previous century, but apparently that level of play isn't enough to ensure global hegemony. Standard Oil had its head handed to it, and even mighty IBM still has to obey civil and criminal law. Is there no route
    • you can't fundamentally alter human nature. we all envy, including you. you can't win a game by suspending disbelief and imaging the rules of the game are not what they are

      human nature has good apsects, bad aspects, and ugly aspects. if i were you, i'd familiarize myself with them, and accept them. but blissfully imagining you can ignore them doesn't have any value whatsoever to any discussion on the matter

      it's like communism: it works fine, as long humans aren't greedy. except we are, so communism doesn't
  • by inertialmatrix (675777) on Thursday January 05, 2006 @01:11PM (#14402010)
    "The biggest company in the computer industry by far is IBM. They have the four times the employees that I have, way more revenues than I have. IBM has always been our biggest competitor. The press just doesn't like to write about IBM."

    I find it fascinating how he uses the term "I" when referring to the company he founded. I wonder how much of his motivation to succeed is pure ego driven. I always found it interesting how all these iconic leaders in silicon valley all know each other, and have all had personal interactions going back 20 years. The old question of whether or not bill and steve really dislike each other, and if that dislike stems from some initial interaction at a computer show in SF back in the 70's.

    Strange indeed.
  • Bill knows all (Score:3, Insightful)

    by digitaldc (879047) * on Thursday January 05, 2006 @01:12PM (#14402017)
    "People tend to get over focused on one of our competitors. We've always seen that, said Gates...Too bad for Nokia, Sony and all those others...IBM has always been our biggest competitor. The press just doesn't like to write about IBM....reading everything online and new devices that enable that -- in five years, that will just be common sense...We're pretty simple, because 30 years ago we said we were a software company and five years, 10 years from now we will say we're a software company."

    Does it annoy anyone else that as you read what Bill Gates says it tends to sound rather whiny and condescending? And what's with the waving of his hands in the air?
    Why can't he just say that they have several strong competitors but they always try to do their best to create good products that will do A, B, and C?
    Is there anything that Microsoft can't do, hasn't thought of, or has something in the works that is better than everyone else? Come on.
  • Reporter: Hi, Mr. Gates, I'd like to talk about the latest windows exploit...
    Gates: [waving hands] You don't want to talk about that.
    Reporter: I don't want to talk about that. Then how about your hottest competitors, Google, and Apple, and Linux is making inroads in...
    Gates: Those aren't the companies you're looking for.
    Reporter: Those aren't the companies I'm looking for.
    Gates: Microsoft is a rock solid business. IBM is our competitor.
    Reporter: Microsoft is a rock solid business. IBM is your competitor.
    Gates: Move along. Next reporter.
    Reporter: Move along... move along.
  • Give me a break. (Score:3, Insightful)

    by Pendersempai (625351) on Thursday January 05, 2006 @01:14PM (#14402043)
    You guys actually think he is telling the truth?

    What if he had said something simpler but equivalent: "We have nothing to fear from Google." Would you believe that?

    In other news, the Information Minister of Iraq claims that there are no Americans in Bagdad...

  • Size matters... (Score:5, Informative)

    by hhr (909621) on Thursday January 05, 2006 @01:20PM (#14402094)
    Wow. You have to wonder what all those people at IBM do and marvel at how efficient MSFT and Google are.

    Google: Number of employees.. 4183 http://www.google.com/intl/en/corporate/facts.html [google.com]
    Net earnings: $1.297 billion.
    Revenus $5.25 billion

    IBM: Number of employees...369277 http://www.networkworld.com/news/financial/ibm.htm l [networkworld.com]
    Net earnings: $7.797 billion.
    Revenues: $94 billion

    MSFT: Number of employees... 57000 http://www.networkworld.com/news/financial/microso ft.html [networkworld.com]
    Net earnings: 12.867 billion.
    Revenues $40.340 billion

    • Good point... Google spends nearly a million dollars per employee per year. Microsoft spends about a half-million dollars per employee. IBM spends about a quarter-million dollars per employee per year.

      Why is IBM so much more efficient than Microsoft and Google?
    • Re:Size matters... (Score:5, Interesting)

      by lawpoop (604919) on Thursday January 05, 2006 @02:01PM (#14402534) Homepage Journal
      You're comparing apples to oranges.

      Google and MS are software companies. All they need is a few programmers to write some software, and they can duplicate that software and minimal cost and sell it millions of times over.

      IBM is a consulting, maintenance, and support business. If you're hired to consult for someone, you actually have to send people there. Problem is, people can only be at one place, or do one thing at a time. Unlike software, you can't copy or clone or consultants, or have them in two places at once. If you get a new support contract, you have to hire additional support staff. If you get a new maintenance contract, you have to hire additional maintainers.

      IBM sells people's labor. If they sell additional product, they have to hire addtional people - the cost is almost directly proportional.

      Google and MS sell software. If they sell more software, they just print up a few more copies, or purchase additional bandwidth for downloads. The additional costs are minimal.

      • Google and MS are software companies.

        From my POV, Google is a service company. They may expand to a software company with the Google Desktop and Google Earth and the like, but I see them as an advertising magnet by having the most popular search capabilities in the world, and selling advertising is where they are currently making money, not software sales.

    • You have to sort of look at these numbers from the right point of view.

      What is the marginal cost for one more product from each of these companies? For Google and Microsoft, one more ad served or one more cd pressed has a tiny marginal cost, once they hit a certain number, each sale is almost pure profit. Then look at IBM which actually sells expensive computers which have a significant marginal cost, and who also bring in huge amounts of revenue from their consulting divisions (IGS,BCS,...) which also h

    • They do have profitable hardware and software units, but that is not where their core is. Support and service require more man power than selling ads or software, which is the core of the two other companies
    • IBM is mostly a consulting firm, which is a fancy kind of temp agency. A programmer at Microsoft or Google writes some code once, gets paid once, and the company can glean profits from it indefinately. As soon as an IBM consultant goes home, IBM stops getting paid.

      Microsoft and Google have little more than fixed costs, so once they pay off the initial development cost, it's pure profit. IBM will never have such a good earnings-to-revenue or earnings-to-employee ratio as long as they rely on consulting.
    • Well, check out their respective revenues and profit margins. Only monopoloies make the sort of money Microsoft do, and the have to be using the monopolistic position to do so. I conclude from these figures that:

      Microsoft is a monopoly
      IBM is not.

      This is unhealthy for our economies as it points to a huge waste of resources being spent on someone's software.
    • Re:Size matters... (Score:5, Insightful)

      by Jason Earl (1894) on Thursday January 05, 2006 @02:34PM (#14402888) Homepage Journal

      Microsoft has a pair of businesses that currently yield ridiculous profit margins, Windows and MS Office. IBM has quite a few businesses, some of which are also ridiculously profitable, but most of which are merely very profitable. The most important of these businesses, in recent years anyway, is IBM's service and support business. Service and support will never generate the profit margins that Windows and MS Office provide, but it's a good business nonetheless, and it is a business with critical strategic importance. Here's an example of why IBM is truly Microsoft's biggest threat.

      Let's say, for example, that you are the CIO of a really big company or a large government institution, like a U.S. State, and you are concerned about what it is going to cost to upgrade 50,000 machines from Windows 2000 and Office 2003 to Windows Vista and MS Office 12. What's more, you would really like to have one central repository for all of your documents. Something that integrates with email, has a web portal, and is easily accessible to thousands of workers at the same time. So you talk to your service and support vendor (IBM), and you ask your rep what he can do for you. Well, it turns out that IBM has this nifty new portal software called IBM Workplace and it can be used with OpenOffice.org for a fraction of the cost of upgrading to Office 12. What's more, the software is compatible with Linux thin clients and so if you have desktops that don't need a lot of bells and whistles you can replace those expensive PCs with easy to manage thin clients and save a bundle. Not only do you end up with a better system overall, but you save millions of dollars in Microsoft upgrades in the process. What's more, IBM has the resources to guarantee that you don't have to worry about whether the system will work or not. The system is going to work slick. In fact, IBM is probably going to be willing to cut you a deal on the software so that IBM reps can use your installation as a showcase.

      Part of the reason that Microsoft can make such ridiculous profit margins is that Microsoft relies on its partners (like IBM) to carry the expense of actually selling and supporting Microsoft software. Microsoft made a conscious choice to stay out of the sales, service, and support businesses for its software because these low margin businesses would have lowered Microsoft's aggregate profit margins dramatically. Microsoft could have become like IBM and built its own service and support arm, but instead it concentrated on the much higher margin business of selling software licenses. That worked fine in the past, but IBM makes software as well. Now IBM has every incentive to cut Microsoft out of the picture in every single one of IBM's many service contracts. Thanks to Microsoft's ridiculous profit margins there is even plenty of fat to cut.

      That's why Microsoft has been concentrating so heavily on its service, support, and sales arms. Microsoft has finally realized that its primary customers (OEMs and sales and service organizations) all would be better off if there was a little more competition in the operating system and office suite markets. So now Microsoft wants to start dealing directly with end users. Unfortunately for Microsoft it can't move too quickly because if it does it risks alienating partners that it needs very badly. If Microsoft is successful the finished Microsoft product will look a lot more like the IBM of today. If Microsoft is unsuccessful then it will probably die.

      Google is really in the same boat. It currently can demand high profit margins because of the amount of traffic that it can drive. However, Google's success is predicated entirely on Microsoft not using its desktop and web browser marketshare to drive more search results its way. To compete successfully with Microsoft (and Yahoo) in the long run term Google is going to have to invest plenty more.

  • by teslatug (543527) on Thursday January 05, 2006 @01:26PM (#14402152)
    So anyone think that if Google or Apple were the top competitors Gates would acknowledge that and give a boost to the underdogs? It's more beneficial for MS to play the underdog itself and acknowledge IBM as the top competitor.
  • Why? (Score:3, Interesting)

    by Yahweh Doesn't Exist (906833) on Thursday January 05, 2006 @01:30PM (#14402180)
    Why are MS's policies and strategies always based around "enemy lists" rather than actual products or services?
  • "[IBM has] four times the employees that I have, way more revenues than I have.'"

    I can understand Bill being envious of the revenue stream of IBM, but the number of employees? My word he must be planning on world domination by being in every aspect of your life and to do so he's gonna need a lot larger of a workforce. I can just see Steve sitting in Bill's office with a conversation that hails from the days of the Animaniacs:

    Bill: "Stevie, are you thinking what I'm thinking?"
    Steve: "I think so Bill, b
  • Wrong threat model (Score:3, Insightful)

    by ka9dgx (72702) on Thursday January 05, 2006 @01:31PM (#14402188) Homepage Journal
    Microsoft's biggest threat is whoever solves the security problem. This involves researching improved security models to replace ACLs, such as capabilities. [wikipedia.org]

    ACLs don't cut it in an age of mobile code and 10,000,000 line programs. You can't trust applications, no matter how careful you are. You shouldn't have to, either.

    --Mike--

  • by ErichTheRed (39327) on Thursday January 05, 2006 @01:32PM (#14402193)
    IBM today isn't the IBM it was in the 90s or 80s. They're still a technology company at the core, but they're doing a smart thing by becoming more of a services company. Lately, they've been turning themselves into another one of the "buzzword-compliant" consulting firms. Those companies (EDS, Accenture, BearingPoint, whatever) make boatloads of high-margin deals and huge profits...more than selling servers and mainframes could ever produce. Companies routinely cut multimillion-dollar checks for "strategic advice" from an army of new graduates who don't mind travelling 360 days of the year!!

    Other things going for them:
    - They killed their low-margin PC business. Love it or hate it, it definitely boosted their profit margin.
    - IBM is one of the only companies still doing pure scientific/technology research. Microsoft is one of these companies too, but it's definitely time for the "next big thing." The PC revolution started in 1980, and it's 2005 now. If I were a technology company, especially one who wanted to keep their competitive edge, I'd be betting BIG on research. The only other big reseatch operations outside of universities that I know of are IBM, AT&T Labs and Microsoft. I'm sure there are other smaller operations, but not on the same grand scale.
    - They still have one of the best server lines out there.
    - They're big proponents of open source stuff. No matter how the whole OSS movement shakes out over the next few years, they're ideally positioned. Almost all their proprietary products can run on both closed- and open-source systems.
  • He is right (Score:5, Interesting)

    by FishandChips (695645) on Thursday January 05, 2006 @01:32PM (#14402197) Journal
    If you look at the totality of what Microsoft does, Gates is surely right. IBM is the 800lb gorilla of services (as distinct from software though IBM is huge in that too). Despite his claims about Microsoft just being a lil' old software house now and in future, my guess is that Gates sees services as the big one in the coming years. Yes, Google can hurt Microsoft a bit on the consumer desktop, and so can Apple and others, but the big money is in enterprise business.

    If this is correct, then it follows that Microsoft may well have concluded that their cosy world of pay-for software has peaked and will now start to decline no matter what they do, so they are preparing to reposition themselves. Admittedly the great man's sour tone and strange diction don't help.
  • Gates' motivation in everything he says and does is to increase revenue, nothing else; there are plenty of examples that Gates will tell blatant lies when it serves his company: he'll say that products will ship soon that don't even exist yet, he'll misdirect competitors about who they are targeting, he'll claim credit for technology the company doesn't develop. And Gates is hardly alone in this among corporate leaders either--most of them do it.

    So, when Gates says that IBM is their biggest threat, it may
  • Microsoft is buying processors from IBM for the 360. I never understood why executives would put down their buisness partners. Like in the case of SBC saying Yahoo should pay, because their contents is going over "SBC's pipes". Did they forget one of their products was called "SBC Yahoo DSL"?
  • by jocknerd (29758) on Thursday January 05, 2006 @01:42PM (#14402310)
    That triple threat consists of Google for Internet, Linux for servers and Apple for Desktops and Home Entertainment.
  • by HockeyPuck (141947) on Thursday January 05, 2006 @01:43PM (#14402327)
    Look at how diversified IBM is... They survive disruptive technologies and paradigm switches. Switches like going from mainframe to client/server, windows to linux, even token ring to ethernet.

    Also they bring in revenue from many many areas... when mainframes were threatened... they looked to PCs, as400, rs6000. How did they look to resurrect mainframes and as400? Introduce linux into their respective LPARs.

    When customers talk about moving from one platform (windows) to the next (linux).. IBM says "no problem, use our hardware, and leverage our services." Getting rid of big iron unix boxes to go with hundreds of tiny 1U servers "how about using our blades..." Getting rid of your old SSA storage? "We'll help put in fibre channel switches..."

    And don't forget about their microelectronics division... it's not just powerPC, but many companies send their designs to IBM for fabrication of custom ASICs.

    IBM has always been a 'soup to nuts' company, MSFT on the other hand... is having trouble diversifying..

    Their core business is windows and MSFT applications (office, SQL), but they are having trouble diversifying... They've gone to advertising (MSN), and home entertainment (Xbox), but they haven't had to survive losing one of their primary technologies (remember: IBM used to live off of mainframes). They do have services, and certifications, but I would guess those are pennies compared to OS and applications.

    MSFT needs to diversify (yet we blame Google for not diversifying)...
  • by vectorian798 (792613) on Thursday January 05, 2006 @01:54PM (#14402446)
    I think most of you are failing to recognize that Google is competing against only a tiny sliver of Microsoft. Note that a large majority of Google's employees are devoted to their search engine technology, whereas Microsoft operates in MANY different markets, and MSN Search is only one of them with less than a tenth of Google's corresponding group in employee count. Seeing as how all the rumors about Google planning for their own office suite etc. have been debunked, I don't think Google is as big a threat as people think it is.

    IBM on the other hand, is the largest service sector company and the largest IT company. IBM's rock solid line of servers provide a much larger push for Unix-based systems (not just IBM's AIX, but really any of them) than does Google's use of FOSS in their products, or Summer of Code. Furthermore, IBM is by far the strongest presence in the HPC market, which as Bill indicated previously, is something MS wants to get into. We've also seen that IBM consistently produces great software (DB2, Business and Commerce software, OS, Application Server, and much more) as well as hardware (their hardware line includes complete server solutions, processors, storage systems, etc.) and is capable of using only its own products end-to-end.

    Thus, it is appropriate to say that IBM is a bigger threat to MS than is Google.

    PS: Google's market cap is not a reflection on its strength or presence so don't bring that up as a figure plz.
    • I think most of you are failing to recognize that Google is competing against only a tiny sliver of Microsoft.

      I would say that Microsoft isn't effectively competing with Google at all. MSN search is pretty much a joke that, as you said Microsoft doesn't even take seriously. Conversly Microsoft is only competing against a tiny sliver of IBM. Microsoft's main market is in two areas, desktop OS and Office Suite. Apple and Linux are the only desktop OS's out there to compete against Microsoft and Open Of
  • all out war (Score:2, Interesting)

    by javiercr (902891)
    Microsoft aims for world domination, therefore they are a fierce competitor to every other company. -Google is a competitor because they want to play the targeted ads game -IBM is a competitor because MS wants to get into more serious enterprise sofware -Sony is a competitor because they want to get into the games console game -Firefox (although not a company) pisses them off because they want to dominate the web browser market although there are only limited benefits in actually domination that market
  • by DrJimbo (594231) * on Thursday January 05, 2006 @03:19PM (#14403294)
    They became so when they didn't fall for the bait and buy out SCO to stop the anti-Linux lawsuits and FUD.

    The threat became apparent when IBM and/or Novell began asking for discovery regarding the Microsoft purchase of an "Unix" license from SCO to the tune of tens of millions of dollars.

    If IBM can prove that Microsoft funded the frivolous SCO lawsuits then Microsoft is in deep, deep trouble. It could easily cost them billions of dollars and some executives could see jail time.

  • by paj1234 (234750) on Thursday January 05, 2006 @06:23PM (#14405164)
    According to the book, "Barbarians Led By Bill Gates", Gates used to be horrible to everyone except IBM.
    "Bill would go to a very senior person at these other OEMs, DEC or Tandy or Compaq or whoever, and yell at them or tell them it had to be this way, or if you don't do this we'll make sure our software doesn't run on your box. What do you do if you're one of these OEM guys? You're screwed. You can't have Microsoft not support your hardware, so you better do what they say.'

    Ironically, McGregor also remembered the remarkable transformation of William Gates III in front of IBM.

    'Bill was very humble and would speak softer (with IBM). There was a definite difference in the tone of his voice. You'd go in the meeting and it was just a fascinating contrast to see Bill at IBM versus Bill at any of the other companies.'"

    How times have changed!

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