Commentary: IBM has many tricks to learn

Can you teach an old dog new tricks? If the dog is the giant, lumbering IBM, the answer is both yes and no. Humiliated by Microsoft in operating systems and by the legion of clone manufacturers in the PC market, IBM is now getting some of its act together.

Freed from its parent's bureaucracy and told to make or break as a stand- alone unit, IBM's personal systems division has at last realised that only one thing sells PCs - price. The new range of ValueLine models, if not the cheapest in the market, are now competitively priced with leading clones such as Dell and Elonex. Corporate buyers and domestic users who saw no reason to pay 30 per cent over the odds for the IBM brand name will look again.

That is the good news. The bad news is that when it comes to its much-troubled OS/2 operating system, IBM still seems to take the view that software developers should beg to be allowed to join in. Industry commentators report IBM refusing licences to reputable software houses to develop OS/2 applications.

The contrast with Microsoft on this score is stark. Microsoft's Windows system has been a huge success simply because so many applications are available for it, from industry giants such as Borland and Lotus down to one-man- and-a-dog operations. And there are so many applications because Microsoft, no pushover when it comes to facing up to competition, let all and sundry into the Windows game.

Yesterday Microsoft reported first- quarter net profits of dollars 209m, 45 per cent up on last year. IBM still has many more tricks to learn.