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A Whole New Ball Game

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We’ve heard that, in an unexpected move, IBM plans to purchase Lotus Corp. IBM isn’t telling how much it will pay, but we’re betting that it will be an obscene amount of money, considering that Lotus is one of the largest software companies after Microsoft. Whew! IBM didn’t say much else about the deal in true IBM fashion, but it will certainly shake up the computer world. If nothing else, who knows what will happen to the 1-2-3 palmtop with wireless peripheral links that HP and Lotus are working on.

Think of Microsoft. One minute the company is riding high, controlling a good part of the microcomputer software industry; the next minute IBM swaggers into town, a six-shooter full of Lotus software at its hip. Heck, I’d be worried if I were Bill Gates. And think of the phone call that Jim Manzi would have made to Bill if he were really childish. “Hi Bill, this is Jim Manzi. Nyah Nyah. Click.” I’m sure Jim Manzi would never do that, though, so at least some propriety reigns. I wonder what the Federal Trade Commission (FTC) will think about the deal, since it was worried about Microsoft before and has had run-ins with IBM in the past. It certainly sheds some new light on any deals IBM and Microsoft might have made at some point to divy up the PC operating systems.

IBM will be in the antitrust spotlight again, considering that it has pushed OS/2 over Windows for some time but has lacked any software clout to enforce its preference. With the array of powerful (if currently unconnected) software from Lotus, IBM now has some of the best software on the market, which it will undoubtedly port to OS/2 as soon as possible. There was talk previously of IBM devoting $40 million to marketing OS/2 in direct competition to Microsoft’s $10 million Windows marketing blitz. Now that makes a bit more sense, since IBM can ensure a decent software base. Sheesh, for $40 million, IBM could buy a professional sports team and name it after OS/2.

So long as the FTC doesn’t get too antsy (and remember, IBM has never lost that sort of lawsuit before, though they have settled out of court on occasion), the deal makes a lot of sense from IBM’s perspective. Like Apple IBM now controls a line of hardware, an operating system for that hardware, and a line of popular software for that operating system. IBM has always emphasized complete solutions in its corporate philosophy, so this fits in well, although it does mean a bit of retrofitting with SAA (Systems Application Architecture), IBM’s interoperability scheme. But how many people are buying big computers, even workstations, in comparison to microcomputers these days? Not that many, and IBM is bowing to the dollar figures that say the company makes a good chunk of its profit from microcomputer sales. You can buy bundles these days that include a PS/2, Windows, Word for Windows, and Excel. That’s all fine and nice, but IBM would far prefer to see those bundles including OS/2 and 1-2-3 and Ami Professional of OS/2. Oh, and for those of you who remember’s IBM’s dismal microcomputer applications software (like DisplayWrite), those programs have been dropped in favor of the new Lotus Software Division’s application suite. About time.

To put the words of that wonderful author, L. Frank Baum, into the mouth of Jim Manzi, “I don’t think we’re in Cambridge any more, Toto.”

Information from:
IBM & Lotus propaganda

Related articles:
COMMUNICATIONS WEEK — 25-Mar-91, pg. 16, 38
InfoWorld — 25-Mar-91, Vol. 13, #12, pg. 8

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