IBM, Microsoft join to assert dominance of software infrastructure

By Joanne M. Correia

Gartner Inc.

IBM and Microsoft shared a stage for the first time in a decade to herald the coming of advanced Web services. But what they really wanted to demonstrate is that they will continue to dominate the software market.


On 17 September 2003, IBM and Microsoft demonstrated code using three proposed standards – Web Services Security (WS-Security), Web Services Reliable Messaging and Web Services Transaction – in a simple application running on WebSphere Linux and Window 2003 server. Steve Mills, senior vice-president of the Software Group, represented IBM while Chairman Bill Gates represented Microsoft.

First Take

The Reason for the Event: This demonstration aimed to accelerate the adoption of advanced Web services. The event highlighted substantial – although still incomplete – progress on advanced Web services protocols for security, reliability and transactions. Without these protocols, interoperability across corporate boundaries (or even within complex corporations) would prove difficult. IBM, Microsoft and others have been developing these protocols since 2002. The Organization for the Advancement of Structured Information Standards will likely adopt WS-Security formally by 1H04; the other protocols will take perhaps until 2005. When they are finalized, Microsoft’s Visual Studio and Windows platform as well as IBM’s WebSphere Server and tools will incorporate these standards.

The Real Reason for the Event: Microsoft and IBM have not shared a stage since the early 1990s, when they fell out over Windows and OS/2, so why did they do so now? They announced no new initiatives. Despite their interests coinciding with respect to Web services standards, they remain opposed in actual product development and sales. IBM and Microsoft staged this event to reassure customers that the two dominant players in software infrastructure want to make advanced Web services a reality so that these vendors can continue their dominance. The two vendors represent more than half of the software market today (in actual revenue). Although they have followed small innovators in most technology advances, they do set the market’s strategic direction and define the standards. Gartner believes that they want to convince the market and their own customers that proposals from smaller vendors will likely not affect the strategic directions of the two dominant players. They expressed commitment to working with other software companies only when questioned by the audience.

The big software vendors, such as Oracle, BEA Systems, Sun Microsystems and SAP, have two choices. First, they could come out with a radically new vision for infrastructure software in opposition to IBM and Microsoft; in this scenario they would downplay Web services and stop contributing to the hype. Alternatively, they could align themselves with Microsoft and IBM at the risk of assuming the marginal role of follower. Gartner believes the latter is more likely. They probably won’t choose the first option because they are distracted with maximizing sales and holding onto their customers.

Bottom Line: For enterprises, this event means two things:

– IBM and Microsoft are the real forces driving Web services

– Advanced Web services won’t appear before 2005 (if ever)

Analytical Source: Joanne Correia, Gartner Research

Recommended Reading and Related Research

“Magic Quadrant for WS Major Vendor Influence, 3Q03” – Although there is no Web services market per se, leadership in influencing Web services technologies and standards indicates a vendor’s overall impact on software in general. By David Mitchell Smith and Charles Abrams

“Web Services Standards Bodies Need to Rationalize Roles” – Ultimately, vendors will drive Web services standards, and IBM and Microsoft will remain in strong positions to influence the outcome. By David Mitchell Smith

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