Are they making up or breaking up?
Like neighborhood gossips, personal computer industry insidershave been speculating for weeks about the future of the industry's most important marriage, between International Business Machines Corp. and Microsoft Corp.
Yesterday they got their answer -- sort of.
The world's largest computer maker and the world's largest personal computer software company announced a major realignment of their decade-old partnership. And there's something in it for everyone.
"It's like they're splitting up but they're going to do something for the children," said Cheryl Currid, who oversees PC users at Coca-Cola Foods in Houston.
What the firms have been fussing about is nothing less than the future of the personal-computer industry. At the center of it all are two competing sets of software for IBM PCs and their clones.
Both software packages promise to make such computers easier to use.
IBM, for its part, has staked its future on a new operating system -- the underlying software that controls PCs -- known as OS/2. Microsoft has been developing OS/2 for IBM, but it has seemed to be throwing its weight, instead, behind its own product, Windows 3.0.
Indeed, Microsoft introduced Windows in May, and the product has been a runaway hit, selling 800,000 packages so far.
Because Windows can run more conveniently on existing IBM PCs than OS/2 can, a Windows customer was unlikely to quickly acquire a new PC -- and that's bad news for IBM. All the attention to Windows and the lackluster reception for the early versions of OS/2 apparently angered IBM.
Other software companies weren't pleased, either.
Lotus Development Corp., for example, had staked its future on selling financial calculations software to run on top of the OS/2 operating system.
More and more, Microsoft was seen as controlling the destiny of the PC industry.
"Something had to give and it did," said William Bluestein, an analyst with Forrester Research Inc. in Cambridge, Mass.
"It's very clear that Microsoft had really put OS/2 on the back burner," Bluestein said.
Though the two firms deny any sort of rift, they moved yesterday to more carefully define their territories.
IBM will take over primary responsibility for developing the current versions of OS/2. Microsoft will remain in charge of a future version.
And, in an unusual twist, both will license each other's software. That means that IBM salesmen may start peddling Windows to commercial customers, although analysts doubt IBM will heavily push the product.
Complicating the situation is that IBM is preparing to release an operating system known as OS/2 "Lite," which supposedly will give users some of the graphic ease-of-use features without having to spend a lot more money on computer equipment.
For their part, IBM and Microsoft say the new division of labor was necessary because the two firms had trouble coordinating OS/2 development at both ends of the country.
And, they say, they're only reiterating what they stated a year ago: IBM PC owners should buy Windows first, then move on to OS/2 when they're ready for more power.
"The relationship has never been stronger ... This is a family of products," said Dan Lautenbach, IBM director of OS/2 marketing.