The IBM/MS partnership in action

Date:

Snippet
IBM-MICROSOFT JOINT DEVELOPMENT

1. Dearborn - the Ultimate NT notebook 2. WolfPack/Scaleablllty 3. Broadcast PC 4. System Management 5. Inter-networking products 6. NetPC 7. Mobile Windows CE Devices 8. Home Networking 9. Windows Terminals

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NetPC Description:

NetPC is a new class of desktop PC which includes a disk drive and LAN connection, but does not generally include any removable storage devices (floppy, CD, etc.). The goal is to provide a smaller, lower cost, centrally managed PC client which significantly reduces total cost of ownership. The operating system (Windows’95 or NT) wlil reside on the local disk and execute locally, but most applications and data will reside on the server. Microsoft is also offering a Zero Administration Kit (ZAK) which will allow customers to easily implement "TaskStation" and "AppStatlon" modes, which are more restricted (simpler) user environments. Microsoft plans to add automated system updates, backup, and server-based user configuration files in 1998 as part of their Zero Administration Windows (ZAW) initiative. This will allow users to access their environment and data from anywhere on the network. We need to become better integrated into these Microsoft initiatives, as they will be important to our corporate customers and are consistent with PC Co.’s promise of value.

Status:

Compaq, FIp, Dell, Intel, and Microsoft are driving the NetPC specification. IBM is working closely with Intel on our NetPC implementation. The first NetPC’s are expected to be introduced in 2H’97. Microsoft has invited IBM to demonstrate our NetPC in their partner’s pavilion at PC Expo in New Yorg, June 16-19.

1. Launch IBM’s NetPC in Fall’97. 2. Work on being included in MlcrosoR’s marketing campaign for NetPC’s. 3. Discuss diskless implementations of "NetPC’s" with Microsoft.

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Home Networking Description:

IBM is working with Intel on AC power line networking that would allow a variety of computing devices in the home to communicate with an Apdva home PC as a home server - or "information fuse box". We would like to work with Microsoft on the operating systems for the various computing devices (perhaps Windows CE) and on other software required for total solutions.

Status:

Microsoft has indicated that they are not ready to meet with us on this. It is not clear whether they are truly not ready, or just reluctant to work with IBM due to the status of the overall relationship. HP is also expected to become a strong contender in this emerging market.

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Public Visibility of Jolnt Development Activities Description:

While IBM is participating in some joint development activities with Microsoft, such as WolfPack and Broadcast PC, Microsoft refrains from publically recognizing IBM’s involvement and contribution.

Status:

Microsoft has been consistent in limiting IBM’$ public visibility. Recent examples include Bill Gates’ failure to recognize IBM when presenting Broadcast PC at WinHEC’97 and Microsoft’s refusal to include IBM in Scaleability Days, despite our participation in the WolfPack program.

Next Steps:

1. Gain agreement from Microsoft (Steve Baimer) to have public visibility with IBM.

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Joint Promotion of IE 4.0

Description:

The launch of IT, 4.0 in Fail’97 is expected to be Microsoft’s major marketing event in 1997. Microsoft has invited IBM (and other key OEM’s) to participate in joint promotions, with Microsoft providing some funding for the activities. I]3M’s participation will help to ensure that we are one of the first OEM’s to offer IE 4.0 (including content designed for IE 4.0) and will contribute to changing customer perceptions regarding the IBM-Microsoft relationship.

Status-..

Microsoft by May 31st.
 * A memorandum of understanding for the joint promotions is expecte~l from


 * Microsoft is currently planning to exclude OEM’s who are shipping Netscape from the public launch activities. We have, however, been able to get Client Systems invited since this brand doesn’t ship Netscape.

Next Steps:

1, Review, negotiate, and sign the IE 4.0 license agreement.

2. Finalize agreement regarding joint promotions.

3. Continue to push for full IBM involvement in launch activities

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Competitive Business Terms Description:

IBM currently pays a higher royalty for Microsoft operating systems than our leading competitors. This Is estimated at $5-$15 per copy for Windows’g5 and from S25-$40 per copy for Windows NT. These higher costs put IBM at a competitive disadvantage. In addition, IBM has less flexible terms and conditions. We need to have the same business term as HP and Dell - and Compaq after their front line partnership ends.

Status:

We currently have very little negotiating power with regard to royalty rates and have had mixed success in negotiating more flexible terms. We were able to negotiate the terms required for PC Co.’s Authorized Assembler Program

Next Steps:

I. Continue to pressure Microsoft for a level playing field

Include IBM in Commercial Events Description:

Microsoft is currently excluding IBM from public visibility at any commercial events, leading customers to question IBM’s relationship with Mlcrosoft and credibility as a supplier of PC solutions. The reason for this is that Microsoft does not want to encourage customers to work with IBM - due to a lack of trust. We need this public visibility as one ingredient in establishing a level playing field with PC competitors such as Compaq, HP, and Dell

Status:

Microsoft has stated that they will not invite IBM to commercial events There is more openness for products targeted at the consumer market. Recently, we have be excluded from exhibiting a TechEd (an event for Microsoft’s technical support community) and have been excluded from purchasing space in Microsoft’s Partner’s Pavilion at PC Expo. However, we have been invited to show our NetPC in Mlerosoft’s Partners Pavalion at PC Expo.

Next Steps:

1. Gain agreement from Microsoft (Steve Balmer) to include IBM in commercial events.

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Joint Sales Calls for IBM PC Hardware Sales Description:

With rare exception, Microsoft will not make joint sales calls with IBM for the sale of PC hardware, while they freely make joint sales calls with Compaq, HP, and other competitors. This gives competitors an opporxunit7 to create and/or reinforce customer concerns about IBM’s relationship with Microsoft and IBM’s credibility as a PC supplier. We need to convince Microsoft that joint sales calls with IBM sales people focused on selling PC hardware will provide better customer satisfaction and will not have an negative impact on Microsoft.

Status:

Limited success on a case-by-case basis, oftentimes at a customer’s insistence.

1. Continue to push Microsoft on a local level, as requested by customers.

2. Gain agreement from Microsoft (Steve Balmer) for more open joint sales calls with IBM’s PC hardware sales people..

Provide IBM with Source Code for Level 3 Support

Description:

The Kirkland Programming Center (K.PC) currently has access to NT source code and is providing worldwide level 3 support to IBM customers. We need to ensure that we will continue to have access to NT source code and obtain access to the source code for other Microsoft products supported by IBM. We are currently focused on keeping the NT source code, which was originally obtained for the NT port to Power PC, as Microsoft has begun to question why IBM still needs it. Microsoft doesn’t seem interested in giving iBM access to source code for other products.

Next Steps:

1. Respond to Microsoft regarding the NT source, as required.

Full Exhibit
http://boycottnovell.com/wp-content/uploads/2009/01/px02714.pdf