IBM's Office Rival

In launching a free, open-source based software suite, Big Blue hopes to compete for Microsoft's Office clients. The design incorporates user feedback with a nod to Web 2.0

IBM's (IBM) recent launch of a free, full-featured suite of business software dubbed Symphony is a bold attempt to grab market share from Microsoft's (MSFT) bread-and-butter Office product. But even as early adopters buzz over Symphony's strengths and weaknesses, the release shows how IBM, much like its arch-rival, is trying to find ways to make traditional enterprise software relevant in a Web 2.0 world.

For one thing, Symphony's design integrates the company's first two Web 2.0 products launched earlier this year. Lotus Connections and Lotus Quickr allow collaboration, blogging, and information-sharing. "We're generally moving toward a Web 2.0 style of design, which you can already see in the new Web site," says Mike Rhodin, general manager of IBM Collaboration, who is overseeing the product launch, referring to the sleek, dedicated site for the Symphony product suite that was unveiled last week.

With Symphony, which includes a word processing, spreadsheet, and presentation application, IBM is taking a page from its own playbook. In the late-1990s, the company was instrumental in legitimizing the Linux operating system in the eyes of corporate IT purchasers, helping it become a mainstay of large server arrays in businesses from corporate data centers to educational research facilities. Now, by choosing to build Symphony on the open source-based Open Office software championed by Sun Microsystems (JAVA), IBM is again giving an aura of polish and quality assurance to a free, mainstream software project.

Acts Like You Paid for It, But It's Free

"It's a paradigm shift in the space," says Melissa Webster, an analyst with the Framingham (Mass.) market research firm IDC. "IBM's entry resolves many issues for the faint of heart. Unlike some other open source software that doesn't exactly feel like a commercially packaged product, Symphony looks and acts like enterprise software—and it's free."

The initial response has certainly been robust. IBM says the software was downloaded 100,000 times between Sept. 18 and 26, the first week it was available. Meanwhile, IBM developers will use the Symphony Web site to interact with the user community, a collaborative strategy (BusinessWeek, 8/30/07) the company has used successfully in the past. Users will contribute suggestions for interface improvements or feature requests. Already feedback has helped IBM to clean up its registration process, which users complained was overly complicated. And it prompted the company to clarify its position on providing an Apple (AAPL) Mac OS X-compatible version of Symphony (it'll be available early next year).

"We plan to rapidly iterate and innovate on the user experience. We'll start to release updates within weeks," says Rhodin, who adds that about a dozen developers participate in a "daily scrum" to look through and address the comments on the site's forums. These developers, who also pay attention to users' personal blogs, look for patterns in the requests. When new features are deemed necessary, they'll be fed into the development queue to hone the design of the product. Rhodin says he is confident that by the time Symphony is officially launched (sometime in 2008), user input will have significantly changed the product's functionality, look and feel.

Simplifying for a Web 2.0 Generation

Of course, it will be tough for IBM to make a dent in Microsoft's market share. The Redmond (Wash.) giant sold 71 million licenses of its latest version of Office in the fiscal year that ended June 30 and has some 500 million desktop customers worldwide.

Generating approximately $9 billion annually, Office is Microsoft's second most lucrative product—second only to Windows. For its part, Microsoft has said it expects Office customers to stick with the company, pointing out that Symphony may not have as many useful features.

The introduction of Symphony shines a light on the similar challenge facing the two old rivals. Both IBM and Microsoft are trying to simplify the complicated user interfaces of applications such as Word and Excel, which have over the years become bloated and overwhelmingly complex. And both companies have started to ponder what will happen when a new generation joins the workforce, one that has grown up with the seamless interactivity and often pared-down aesthetic of Web 2.0 products—a category which includes everything from social networking sites to sophisticated online applications.

"The big question on these companies' minds is: How does the participation-driven Internet migrate into the enterprise?" says Nick Gould, the chief executive of New York's Catalyst Group Design, an interface design and usability firm that has worked on both Web and desktop software projects with a wide range of companies, including General Electric (GE), Ford (F),, and

Security Still a Concern

The answer isn't obvious, but the pressure to find it is mounting. Free online applications such as Google's (GOOG) Docs; or Basecamp, a relatively affordable, visually sleek, Web-based project management application created by Chicago company 37signals; may not yet have been widely adopted, but they have attracted attention for being easier to use than some much costlier systems. "Web 2.0 has come along with a design philosophy of doing things much more simply, which is putting competitive pressure on bigger companies," says John Zapolski, a principal in the San Francisco innovation strategy firm Management Innovation Group. The next generation of employees, according to Zapolski, will have a lower tolerance for clunky design.

Of course, corporate IT buyers are looking for more than sleek interfaces from a software product. Concerns over security, compatibility, and potential future upgrade problems always loom large. And IBM will have to persuade potential clients that it can provide the necessary support for the product. (For now it promises paid-for support at some point, for an as yet undetermined fee.) But if it is deft in releasing upgrades, and as aggressive as it was when it first backed Linux in 1998, IBM's Symphony could prove to be the opening shot in a new round of fierce competition for the hearts, minds, and desktops of offices worldwide.

Before it's here, it's on the Bloomberg Terminal.