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Microsoft feels the wrath of Big Red

IBM may have finally found a way to get back at Microsoft for pulling out of OS/2 -- and to make Big Blue feel better about its monumental mistake of ceding the operating system market to Redmond in the 1980s. Call it the revenge of Big Red.

Big Red is the clever moniker that BDA China consultant Duncan Clark attached to the tandem created by sale of IBM's PC business to China's Lenovo Group. While IBM has been on an "I Love Linux" campaign to the detriment of Microsoft in

The week's top headlines

Paid support for NT4 Server, Exchange 5.5 extended

Release is a signal that Windows 2003 SP1 is near

IM threat service pledges cooperation

Don't get swept away by patch drift

Taking a piecemeal approach to managing identities

recent years, the hardware giant has a greater potential to harm Redmond's core business by arming the Chinese with a powerful brand. (Lenovo, formerly known as Legend, can use the IBM name for five years.)

Since the capitalist-minded communist government in China has made no secret of its desire for a local company to develop a rival to Windows, the world's largest nation -- and one of the fastest growing economies -- could ultimately produce a dynamic hardware-software duo that would change the desktop landscape as we know it today.

And, of course, IBM would stand to profit handsomely, since it will hold a nearly 19% stake in Lenovo if the deal goes through. Perhaps that's why it sold a $10 billion business for a mere $1.75 billion (including liabilities).

Microsoft hasn't said anything publicly about the deal, but then again, the short-term impact is on hardware vendors, especially No. 1 Dell and No. 2 Hewlett-Packard. At an industry conference this week, Michael Dell sniffed that his company doesn't grow its business through acquisitions. But for HP, there are already calls for it to shed its PC business, since the Compaq merger hasn't done much for Carly Fiorina's company.

Regardless of what happens, enterprise customers shouldn't feel any pain over all this. Desktops and notebooks are commodities, after all. Price, quality and service still rule this market.

Elsewhere in the news

If you're a shop still running Windows NT Server 4.0 or Exchange Server 5.5, you can get an extra year of support -- if you're willing to pay for it. Microsoft's custom support program now covers those products through the end of 2006. … In a sign that Windows Server 2003 Service Pack 1 is on track for the first half of 2005, Microsoft this week issued a release candidate for SP1. The company issued similar test versions of 64-bit flavors of Windows Server 2003 and XP Professional. … A new instant messaging "threat center" made its debut on Tuesday. IMlogic will run the service for enterprises. It supports the clients of IM's Big Three (AOL, Microsoft and Yahoo), and has the backing of several vendors, including McAfee, HP and EMC. … At this week's U.S. IPv6 Summit in Virginia, a Microsoft executive said the company is committed to supporting IPv6 in Longhorn. Government Computer News quoted Sinead O'Donovan, a Microsoft product manager, as saying that her company already has the largest IPv6 network in the world. She should have stopped there, before uttering that trite and unappetizing line: "We eat our own dog food." … Basking in the media glow of its Firefox browser, the Mozilla Foundation has followed up with the release of a new open source e-mail client. Thunderbird 1.0 is geared toward consumers, but Mozilla says an enterprise version is in the works.

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