IBM's Solid Stake on the Desktop

By Steve Hamm IBM launched a bold foray into desktop computing last spring, when it took on Microsoft's desktop monopolies -- Windows and Office -- with its own Workplace product. Now it looks like Big Blue's package of collaboration, communications, productivity, and desktop management software has struck a chord.

On Nov. 23, IBM (IBM) announced that 125 independent software makers have adapted their products to work with Workplace, and so far this year, corporations have bought pieces of the software for approximately 1.4 million employees. "We see a groundswell," says Steve Mills, the executive vice-president in charge of IBM's $14.5 billion software group. "We're seeing a strong level of customer interest around Workplace and a strong level of commitment from other technology vendors who are aligning with it."

"CROSS-PLATFORM PLAY." IBM's new foothold on the desktop comes at a time when early-adopter corporations are considering shifting from Windows to the open-source Linux operating system to reduce costs and avoid being locked in to Microsoft (MSFT) products. Approximately one-third of the people using Workplace have Linux computers.

Analyst Stephen O'Grady of market researcher RedMonk in Bath, Me., says the fact that Workplace runs on a number of operating systems -- including Windows, Linux, Macintosh, and Unix -- means "IBM has a tremendous opportunity to make a cross-platform play." Microsoft's Office productivity and collaboration applications only run on Windows (although Word, Excel, and PowerPoint are available for the Mac, the rest of the suite isn't).

Microsoft isn't running scared. Far from it. After all, approximately 400 million people worldwide now use the Office package. And revenues for the entire Office System -- which includes desktop and server software -- rose 17% last fiscal year. So it's a healthy and fast-growing business. "Workplace creates an opportunity for us," says Chris Caposella, corporate vice-president for Microsoft's Information Workers Product Management Group. "Their Lotus Notes customers have to decide whether to stick with IBM or switch to our communication and collaboration solution."

THE SWEET SPOT. However, unlike IBM's Lotus Notes suite, which focuses primarily on e-mail and collaboration, and which Big Blue continues to sell, Workplace has a much broader array of capabilities. It weaves together e-mail, collaboration software, a Web portal, a small database, software for working on Web applications offline, and desktop-productivity applications, including word processor, spreadsheet, and presentation manager programs.

The market sweet spot lies in operations such as data entry, call centers, factories, warehouses, and sales forces. Among IBM's early customers are Manpower in Europe, Miami-Dade County in Florida, and up-and-coming IntelliCare, a nursing services company in South Portland, Me. "This is task-driven computing. It helps businesses equip the right people with the right computers to match their work needs," says IBM's Mills.

One example of Workplace in action: IntelliCare employs 175 nurses who provide phone advice for medical practices and home health monitoring. About 80% of the nurses work at home and the rest in small satellite offices. IntelliCare uses Workplace to send nurses information about patients and care options, connect them with supervisors and specialists via instant messenger when they're on the phone with clients, and gather all of the new information about treatment decisions and actions into patient files.

"We won't put Microsoft Office on our machines," says IntelliCare CIO Jeff Forbes. "What we need these days is integrated workflow systems that bring together applications, databases, and communications."

"NEW WORLD." The technology fits well with the plans of software makers, too. Companies including Web-portal component maker Bowstreet, analytics specialist Hyperion Solutions (HYSL), and publishing giant Adobe (ADBE) have adapted their products to work with Workplace.

Adobe made it possible for computer users to easily drag and drop information back and forth between its PDF files and Workplace forms. In the future, Adobe plans on making it possible for its employees to sign on to any computer in the company and immediately be presented with just the information and fill-in-the-blank forms they need to get their specific job done, such as recording complaints at a call center. "This is the way we'll develop applications in the new world of computing," says Shantanu Narayen, Adobe's executive vice-president for products.

Because IBM Workplace involves so many aspects of corporate computing, it's not something execs can leap into. So don't expect the kind of lightening-quick adoption you get with something like's new Firefox browser. Still, because Workplace hits on the themes of low-cost and manageability that are so important to corporations today, it looks like a technology with a bright future. Hamm is a senior writer for BusinessWeek in New York

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