Microsoft is the undisputed leader in software with its flagship product Windows equipping more than 90 per cent of computers worldwide. And a lot of Windows' popularity can be specifically attributed to the Microsoft Office suite - a collection of applications that make mundane tasks like writing documents and maintaining accounts much easier.

Now, Big Blue IBM, the largest computer services company in the world, has come out with a support service and new product aimed at eroding the Office software franchise and Microsoft's small-business server market.

IBM had announced its free Lotus Symphony desktop software suite in September 2007, in an attempt to displace traditional Office software applications, such as Outlook (email and calendar), Excel spreadsheets and PowerPoint presentations. The software is based on the open-source Open Document Format.

However, the teething problem in such cases is getting established businesses to accept freeware as that they are not apt to make the switch, especially when it lacks support.

In an effort to bring around such doubting Thomases, IBM added a support service Tuesday. The service is priced from about $25 to $50 per user, depending on the number of users.
However, for unlimited number of users in a single corporation, the deal would cost $25,000.

Companies and home users that don't want that support can continue to obtain the word processing, spreadsheet and presentation software for free.

It is the latest challenge to Microsoft's Office, which faces new competition from companies such as Google as well as free collaboratively developed software such as OpenOffice. Google also sells support for its programs.

Moreover, Adobe has also moved into the office documents territory with the launch Monday of Acrobat.com, which provides word processing and Web conferencing services that are integrated with its PDF document software.

Analysts don't expect IBM to make much money out of this product and service. In their opinions, what IBM is looking for is rather a shift in loyalty from rival products, as well as increased spending on IBM software with money saved from Office upgrades.

IBM estimates that a company with 20,000 employees could save $8 million annually with its free Symphony software and a services contract vs. upgrading to Microsoft Office 2007.

At the same time, IBM also announced the launch of Foundations, a small-business hardware and software server built on a product it picked up in February with the acquisition of Net Integration Technologies.

The server is intended for companies with up to 500 employees. Preloaded with Symphony and Lotus collaboration software, Foundations will compete directly against Microsoft's small business server software.