April 26 1995
To: Mr D. L. Harrington
Ms J. M. Heinsohn
Mr B. M. Johnson
Mr D. J. Lautenbach
Mr L. K. Loucks
Ms C. J. Miller
Mr D. L. Schleicher
Mr G. L. Sepe
Mr. H. T. Sundberg
From: Mr. L. R. Relswig
Office of the General manager
IBM North America
April 19, 1995
MEMORANDUM TO: North American client executives
Subject: Our Commitment to Win Against Microsoft.
While it is obvious that Microsoft competes directly with our desktop
operating system and middleware businesses. Let me share with you more
background on Microsoft's recent and planned actions:
* Microsoft as attempting to imbed more and more function and "hooks"
into the layers between the hardware and operating systems, operating
systems and applications, and between applications and user interfaces.
By controlling these interfaces and limiting access to their APIs they
can be first to market with key applications and functions.
They force customers to wait until Microsoft is ready to deliver while
shutting out other ISVs and making APIs unavailable. Microsoft's own
customers, and the rest of the industry, are growing impatient with
* Microsoft Office and WOSA (Windows Open System Architecture) both have
built-in hooks for industry-specific application development. This is
designed to lock industry ISVs into Microsoft-only platforms.
Microsoft's aim is to own and control all the standards that software
developers must adhere to. Openness to Microsoft means that anyone is
welcome to write to Microsoft standards. The control of the standards
rests with Microsoft.
In contrast, the open standards approach which IBM and other industry
leaders have adopted, allow each vendor to apply their strengths and
technologies to solve common customer problems. The end results are
solutions which integrate easily and work well together.
* Working closely with Intel and Compaq, Microsoft is attempting to move
the industry away from "IBM compatible" to "Windows compatible" PCs.
They are working to develop industry standard hardware optimised to
Tight coupling of hardware with Microsoft's operating system will
effectively limit customers' ability to freely select application and
network software. More importantly, customers will no longer be able to
capitalize on their existing PC install base. Their ability to run their
OS/2 applications will be endangered. If customers choose to move to new
releases of applications, they will likely be forced to move to new
releases of applications, they will likely be forced to move to the new
hardware which will advantage Microsoft solutions. With NT's support for
SMP and RISC processors, they are obviously also targeting R6/6000,
AS/400 and mainframe servers.
* They have already targeted System/36 and AS/400 customers as
candidates for migration to the NT platform. Many of you have already
seen and heard of Microsoft's pinpoint advertising, direct mail
campaigns and seminars designed for this purpose, under the guise of
"industry seminars". These seminars quickly turn into blatant sales
presentations where NT is advocated as the server platform that will
deliver performance enhancements and cost savings. Benchmarking and cost
comparisons prove these claims are simply not true. Another thing - our
midrange platforms enjoy more ISV support than any other plat from in
With Windows95 and Microsoft Network, Microsoft poses a threat to our
Advantis and Global Network businesses. IBm is striving to create a
commercial opportunity for a wide range of businesses, providing a
service to business and end users. Microsoft's plans include acquisition
of key application software and interfaces, in order to be the
"gatekeeper" or "toll collector" for consumer enterprise transactions.
* Their BackOffice product provides packaged middleware and server
products encompassing database, systems management, communications and
mail servers. It is priced to take significant market share quickly; and
minimize server opportunity for IBM.
BackOffice is no more than packaging. If you take apart the package, (7
CDs with 5 installs) the individual components do not stack up to our
own products that perform the same functions. In addition, we offer a
stronger value proposition to our customers: Microsoft BackOffice
products are supported ONLY on Windows NT. Most customers prefer IBM's
open strategy in which we support a variety of servers, and saleability
to the largest mainframes.
These tactics are disturbing, not only to us, but to our customers, too.
Customers tell us every day that they want and need products which are
open. They want to choose and integrate the right set of products for
their business. They want investment protection. They want to work with
vendors who understand enterprise issues, and how to apply technology to
make them more competitive. They want to be told the truth about what to
expect from a vendor's products and delivery timetables.
What must we do?
* We must tell the total IBM story to our customers; Clients, servers,
hardware, software, and skills, how we can help them integrate,
implement and manage enterprise client/server and distributed computing
needs from handhelds to mainframes; versus first generation 32-bit
clients, clever packaging and unproven server solutions from Microsoft.
* We must know, understand and describe the differences between truly
open alternatives and proprietary "standards".
* We must articulate our technology leadership with OS/2 Warp, SOM,
DSOM, DCE, OpenDoc and the entire IBM Open Blueprint.
* On the desktop, we must always lead with OS/2 Warp. It is no longer
acceptable to look the other way while Microsoft sells desktop or server
software in the hops that our hardware will get "dragged" along with the
sale. Microsoft does NOT recommend IBM hardware. You must be proactive
and engage NT competition in your accounts. Adopt a "no-lose" policy
against Microsoft. Approach every NT situation as you would a major
competitive threat to you mainframe, midrange, DASD, or network business.
To help you, Ralph Martino and his team are setting up an " NT Winroom".
Through this Winroom, you should be able to access any and all IBM
resources you need to win. I will be personally reviewing the top 200 NT
account situations to see how I can help you win.
This subject commands top priority from everyone in IBM North America.
If you don't share this view, then please call me, because I expect no
less from you.
R. M. Stephenson
cc: Mr. G. W. Corgan
Mr. R. F. Martino
Area General Managers
ISU General Managers
court documents in the case of Comes v. Microsoft.