The text which follows is from an internal IBM memo to employees. * * * * * UPDATE ON IBM / MICROSOFT / OS/2 February 1, 1991 In a January 29 NATBOARD notice IBM reaffirmed its commitment to OS/2 following questions raised by media reports. On January 28, in response to the article that day in the Wall Street Journal ("Microsoft Corp. to Scrap OS/2, Refine Windows") Microsoft issued the following statement over BusinessWire: "Microsoft denies the Wall Street Journal article's allegation that Microsoft is dropping OS/2. Microsoft and IBM are continuing the joint development of OS/2. Microsoft continues to service, support and sell OS/2. Microsoft is continuing to develop applications for OS/2 adding to the 11 OS/2 applications currently available from Microsoft. "The operating system market has multiple segments with varied requirements," said Bill Gates. "For customers needing high end capabilities, deploying OS/2 applications or pursuing IBM's SAA direction we market and support OS/2. We will continue to enhance it in the future and enable it to run Windows applications." The following key messages should be used in emphasizing IBM's commitment to OS/2 to your customers. Suggested answers to questions that might be asked by your customers are also included. Should you have additional questions, please address them to RHQVM01(OS2INFO). This PROFS ID will be available until the end of February. KEY MESSAGES - IBM is firmly committed to OS/2 for the long term, as are many customers, ISVs and business partners. - The real issue from a customer perspective is broader than the graphical interface. What is important is the operating system and how its current function and future capabilities will meet the requirements of our customers' business solutions. - IBM has the resources and expertise needed to fulfill our commitments to OS/2. - IBM has not changed its plans for OS/2. OS/2 2.0 will be available this year and, working with Microsoft, will enable Windows applications to run in OS/2. - Customers need total solutions that are not met by one operating system. We recommend a range of operating platforms from DOS to OS/2 to meet the different requirements of our customers. - Windows is a good graphical DOS; DOS, however, has its limitations. - There is a clear customer requirement for OS/2 and the features and functions it provides: advanced Presentation Manager graphics, high performance communications and connectivity, consistent performance in complex configurations, reliability and integrity in multi-application environments. IBM and its customers value these strengths as a critical component of current and future systems solutions. QUESTIONS AND ANSWERS Q1. Are the directions of the two companies consistent? Is this a rift? A1. Last September we announced that we would divide primary development responsibilities for DOS and OS/2, with Microsoft taking responsibility for DOS, Windows, and OS/2 3.0. IBM has responsibility for all other versions of OS/2. These responsibilities have not changed, and our business relationship continues. Q2. It appears Microsoft is moving towards Windows for the long term, not OS/2. Is that the long-term direction IBM is headed? A2. No, IBM remains firmly committed to OS/2 for the long term, as are many customers, ISVs and business partners. We have the resources and expertise needed to fulfill our commitment to OS/2. There are a range of solutions for customers, filling different needs. Windows fills a certain set of needs. OS/2 fills many needs for both clients and servers, and as we've stated, IBM will continue to develop and enhance OS/2. Q3. Won't Microsoft's recent statements freeze if not kill any future sales of OS/2? (Why would anyone need/want OS/2?) A3. No, there's a clear market for OS/2 today and tomorrow. Besides, the real issues here are much broader than PM or Windows. The question isn't which interface you prefer. The real question involves the overall product, whether you need a graphical DOS or an advanced operating system. There are too many customers today who need the advanced capabilities of OS/2 - they need the connectivity and security to be able to run large, complex mission-critical and line-of-business applications. If you speak with some of these companies, like Frito-Lay, I think they'd tell you the same thing. It's not the interface that permits them to do these things, it's the operating system - OS/2. Q4. What is IBM's long-term vision? A4. First of all, IBM is absolutely committed to OS/2. There are a range of solutions for customers, filling different needs. Windows fills a certain set of needs. OS/2 fills many needs for both clients and servers, and we will continue to enhance and expand its function. OS/2 1.3 delivered on our promise to dramatically improve the performance and reduce the memory for OS/2. OS/2 2.0 takes this one step further this year by making the leap from 16-bit to 32-bit capability and adding exciting new function. Q5. Once again, Microsoft has taken an aggressive stance on the future of Windows and OS/2. Will IBM continue to follow Microsoft's lead? A5. IBM has led and will continue to lead the development effort for OS/2 1.3 and 32-bit OS/2. Last fall, we announced and are now shipping a smaller, faster OS/2 known as version 1.3. We are also providing early code for 32-bit OS/2 to selected customers. Overall, customer response to both OS/2 1.3 and 32-bit OS/2 has been positive and encouraging. Q6. What does this mean for customers who've invested in OS/2? A6. They can be assured that IBM is firmly committed to OS/2 and to every customer who invests in it. OS/2 will continue to grow and improve, as you've already seen in our recent release of OS/2 1.3. And as we've stated last fall, OS/2 2.0 will be released this year and will contain many of the advanced features our customers require. Q7. What are the differences between PM and Windows interfaces? Why would a customer want PM over Windows? A7. Again, customers don't buy PM, they buy OS/2. PM as the interface to OS/2 is a component of the overall product. Windows, as the interface to DOS, is packaged separately. So the real question is what is the difference between OS/2 with PM and DOS with Windows. After realizing the big differences between the operating systems, the differences between the interfaces seem relatively minor. They look and feel the same, but as you would expect PM is more robust. Q8. What are the differences between OS/2 and Windows? Don't recent statements by Microsoft affect this positioning? A8. No. OS/2, as an advanced function operating system, is ideal for larger, more complex applications, such as mission critical and line-of-business applications and is recommended for both clients and servers. Windows, as a graphical extension to DOS, works well for users of personal productivity applications and entry-level communications. Q9. Will the Binary Compatibility Layer (BCL) be in OS/2 2.0? Will you enable compatibiity for Windows apps in OS/2 2.0? A9. We understand the customer requirements for Windows applications to run under 32-bit OS/2, and as we have stated, we will ensure that this is implemented. We are evaluating BCL with other methods and plan to choose the best method possible to fulfill our customer requirements. Q10. Will this method be a software migration kit, like the Windows libraries Microsoft is touting? Will it be MVDM? A10. While there are several methods available to us, we are not prepared to speculate at this time. Q11. Will recent statements by MS affect the availability of OS/2 2.0? When will it be available? A11. No. Our availability plans remain unchanged. OS/2 2.0 is currently shipping to select customers through the Early Experience Program and will be generally available this year. (Beyond that, we will not speculate on an actual timeframe or date.) Q12. What are your plans for Windows - will you market it? A12. IBM is evaluating where Windows fits in the range of solutions available to our customers. We have made Windows available in some situations where it was appropriate. We are continuing our evaluation process.