Microsoft challenges IBM

NEW YORK — Microsoft Corp. announced a $500 million marketing initiative Thursday aimed at competing with IBM Corp. for corporate spending on information technology.

In doing so, Microsoft continues on its traditional course of persuading businesses to spend money on desktop-bound software, even as rivals are emphasizing more Web-oriented applications that aren’t as firmly tied to Microsoft’s Windows operating system.

The $500 million, to be spent over a year to buy ads and expand its sales force, is the largest business-oriented marketing campaign ever for the company, said Jeff Raikes, president of the business division.

By comparison, Microsoft spent $200 million on a four-month marketing campaign when Windows XP was launched in 2001.

“People will look to Microsoft and they will look to IBM” for leadership in business technology, Chief Executive Steve Ballmer said, speaking to reporters at an executive conference. “They are the competitor.”

Although Microsoft competes directly with IBM in a few areas, like collaboration software, Gartner analyst David Cearley said, its latest campaign springs out of a more basic conflict about the future of software.

IBM’s vision is about Web-based and to some extent open-source software, where the developers make their blueprints available to others. IBM aims to profit from that trend through its enormous consulting and services arm.

Microsoft, on the other hand, doesn’t have a consulting arm and wants its proprietary software, in which the blueprints are closely held, to be the main driver of innovation. The Redmond, Wash., company has made most of its money from such products — namely the Windows operating systems and the Office business suite that includes a word processor, a spreadsheet and other tools.

Thursday’s announcement by Ballmer was an affirmation of that position, Cearley said. “IBM is increasingly a services company … and we are, at the end of the day, a software company,” Ballmer told reporters at a conference of business executives.

Ken Bisconti, IBM’s vice president for the Lotus Workplace division, said IBM is the second-largest software products company, not just a consulting organization. “Windows and Office are attempting to prolong a pre-Internet, proprietary, one-size-fits-all computing model which we do not see the market adopting,” Bisconti said.

Microsoft’s ad campaign, with the slogan “people ready,” kicked off Thursday with eight-page advertisements in The New York Times and The Wall Street Journal. TV ads will follow during the NCAA basketball tournament.