2 March 2004 IBM will today announce an aggressive $1 billion push to win over thousands of software developers worldwide, many of them currently loyal to Microsoft.

CEO Sam Palmisano plans to lure them with co-marketing deals, free software, low-cost software tools and access to large customer accounts — if they agree to develop their applications to run on IBM platforms.

Recruiting software developers that use Microsoft technology is a key part of the strategy, according to reports, taking advantage of increasing unease among some that Microsoft has become too powerful.

“We want to establish deep relationships with thousands of software developers and we want them to be tightly connected to our technology,” head of IBM Software Group Steve Mills told the Financial Times.

IBM quit the enterprise applications market in 1999. As a result it can offer developers a platform in which it will not also compete against them, unlike Microsoft, which plans to build a $10 billion enterprise applications business by 2008, developed on its own software and tool stack.

By forging close links with major enterprise applications suppliers such as PeopleSoft, Siebel and SAP has helped to uphold IBM revenues through the IT spending downturn. The company wants to extend this across vertical markets where there are thousands of smaller software developers.

Small developers are crucial to Palmisano’s strategy to drive into the small and medium-sized business (SMB) sector. But Microsoft has a tight hold on this market, which will be difficult for IBM to break, warn analysts.