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By PETER SVENSSON, AP Technology
Writer. Thu Mar 16, Microsoft Corp. announced a $500 million marketing
initiative Thursday aimed at competing with IBM Corp. for corporate spending on
information technology. In doing so, Microsoft continues on its traditional course
of persuading businesses to spend money on desktop-bound software, even as
rivals are emphasizing more Web-oriented applications that aren't as firmly
tied to Microsoft's Windows operating system. The $500 million, to be spent over a year to buy ads and
expand its sales force, is the largest business-oriented marketing campaign
ever for the company, said Jeff Raikes, president of the business division. By comparison, Microsoft spent $200 million on a four-month
marketing campaign when Windows XP was launched in 2001. "People will look to Microsoft and they will look to
IBM" for leadership in business technology, Chief Executive Steve Ballmer
said, speaking to reporters at an executive conference. "They are the
competitor." Although Microsoft competes directly with IBM in a few
areas, like collaboration software, Gartner analyst David Cearley
said, its latest campaign springs out of a more basic conflict about the future
of software. IBM's vision is about Web-based and to some extent
open-source software, where the developers make their blueprints available to
others. IBM aims to profit from that trend through its enormous consulting and
services arm. Microsoft, on the other hand, doesn't have a consulting arm
and wants its proprietary software, in which the blueprints are closely held,
to be the main driver of innovation. The Thursday's announcement by Ballmer was an affirmation of
that position, Cearley said. "IBM is increasingly a services company ... and we are,
at the end of the day, a software company," Ballmer told reporters at a
conference of business executives. Ken Bisconti, IBM's vice president
for the Lotus Workplace division, said IBM is the second-largest software
products company, not just a consulting organization. "Windows and Office are attempting to prolong a
pre-Internet, proprietary, one-size-fits-all computing model which we do not
see the market adopting," Bisconti said. Microsoft's ad campaign, with the slogan "people
ready," kicked off Thursday with eight-page advertisements in The New York
Times and The Wall Street Journal. TV ads will follow during the NCAA
basketball tournament. The campaign will promote a number of products the company
will release throughout the year, including new operating system Windows Vista
and new versions of its server software and Office business tools. Microsoft will try to make the case that its software is
familiar and easy to use — a message that takes advantage of Microsoft's
success so far in penetrating office computers as it promotes newer
applications like collaboration tools and databases for customer-relationship
management. Raikes said the marketing push comes at a time when business
customers are ready to spend to increase revenue rather than cut costs, which
has been the theme in recent years. "We do think this is a different economy than we saw
two to three years ago," Raikes said. He estimated that up to three-quarters of Microsoft's $40
billion of annual revenue comes from business
customers. IBM had $91 billion in revenue last year, mainly from business
customers. ___ |
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