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Analysis: IBM Takes Dead Aim At Microsoft Office With New Notes Version

Microsoft has good reason to be concerned: The new version of Notes will include a built-in office suite complete with a word processor, spreadsheet, and graphics program.
The stakes are substantial for Microsoft in this. The Boston Globe reports that Microsoft's Information Worker unit, which produces Office, accounted for more than half of Microsoft's $14.5 billion profit last year.

In addition, ITWire says that Office revenue growth has pretty much stalled, and is up an anemic two percent for the first nine months of this fiscal year compared with the last fiscal year.

No one expects Notes to supplant Microsoft Office; it's a comprehensive collaboration platform, not an office suite. So companies will not be comparing Office versus Notes head to head.

But that doesn't mean that Microsoft doesn't face potentially serious problems when the new release comes out. If Notes includes what is in essence a built-in office suite, why pay the up to $400 that people pay for Microsoft Office?

With the Notes release, expect some enterprises that use Notes to begin to abandon Office.

It's unlikely that the new built-in application suite will attract a great deal of new business to Notes. More likely is that it will help Notes keep its existing user base. And if it can do that, while cutting into Office use, IBM will have a big success on its hands.