Announcement Letter Number 289-625 dated November 14, 1989
US - Last Revised on November 14, 1989

Brief Description of Announcement, Charges, and Availability

       IBM and Microsoft (1) today announce a broadening of the scope
of their development partnership and have agreed to develop jointly a
consistent, full range of systems software offerings for the 1990s.
These software offerings will include enhancements to DOS, OS/2 (R)
and local area network (LAN) products.
 (R) Registered trademark of International Business Machines
 (1) Registered trademark of Microsoft Corporation.

Customer Letter Section

IBM and Microsoft today announce a broadening of the scope of their
development partnership and have agreed to develop jointly a
consistent, full range of systems software offerings for the 1990s.
These software offerings will include enhancements to DOS, OS/2 and
local area network products.
       This statement of direction will help customers choose the
appropriate software solution for their requirements, and assist them
in planning a smooth transition to the advanced personal computing
platforms of the 1990s.  Together, IBM and Microsoft view the
"platform for the '90s" as hardware systems with Intel (2) 386 and
i486 (2) microprocessors, 4 megabytes (MB) of memory and 60MB fixed
disk drives with OS/2 and the Presentation Manager (TM) graphical
user interface.
       To reaffirm this, IBM and Microsoft announce that the majority
of their application and systems development resources will be
applied to OS/2 solutions.  Beginning in the second half of 1990, IBM
and Microsoft plan to make their graphical applications available
first on OS/2.
       Specifically, the companies jointly announce:
o   The intent to deliver a version of OS/2 that exploit the advanced
    capabilities of the Intel 386 and i486 microprocessors in 1990.
    This version will have advanced features such as demand paging
    and the ability to run multiple DOS applications concurrently,
    and it will allow applications to exploit the 32-bit flat memory
    model.  Today's emerging Presentation Manager applications will
    run unmodified on the new version of OS/2.
o   Availability of early development support for this new OS/2
    version by year-end 1989 with a common development toolkit.
    Software developers starting new high performance or server
    applications targeted toward 386SX/4MB or larger systems should
    build directly on the advanced Application Programming Interfaces
    (APIs) of this forthcoming 32-bit version of OS/2.
o   The intent to develop OS/2 32-bit technology that is portable,
    along with applications, to other hardware instruction sets, for
    example, RISC (Reduced Instruction Set Computing) architectures.
       Today's OS/2 1.2 is recommended for systems with at least 3MB
of memory and 30MB fixed disk drives.  IBM and Microsoft are
committed to continue to expand the range of OS/2 capable systems.
As a first step, the companies announce that more than 512KB of
memory used by the OS/2 "DOS Compatibility Box" will also be usable
by OS/2 applications when the DOS program is inactive.  This
capability will be available this year.  Both companies are making a
concerted effort to enable OS/2 for 2MB entry systems, and customers
should plan to use Microsoft Windows to implement graphical
applications on platforms with less than 2MB of memory.
       On systems with 4MB of memory, customers can take full
advantage of advanced system features such as the High Performance
File System, expanded LAN client features, and advanced applications.
OS/2 is currently best suited for customers using or building data
base applications, needing full multi-application and background
processing support, or using distributed processing solutions
requiring full LAN client support.
       OS/2 is also recommended for all server applications.  The new
32-bit version of OS/2 will be further enhanced for server
requirements.  In addition, certain advanced operating system
features such as Department of Defense security, full object oriented
capabilities, and symmetrical multi-processing will be available only
in future releases of 32-bit OS/2.
       DOS and Windows are recommended for systems with 1-2MB of
memory or fixed disk drives smaller than 30MB.  For these customers,
Windows is an excellent entry graphical workstation, because it is an
easy installation upgrade to DOS, allows the user to run existing DOS
or Windows applications, enables limited multi-application support
and provides function for a basic LAN client.  While Windows will
provide the Systems Application Architecture (TM) (SAA (TM)) user
interface, it is not planned to include the full range of SAA support
that OS/2 will provide.
       Microsoft's position is that Windows is not intended to be
used as a server, nor will future releases contain OS/2 advanced
features such as distributed processing, the 32-bit flat memory
model, threads, or long file names.  OS/2 is the recommended
operating system environment for new or existing 286/386 systems with
3MB or more of memory.
 (TM) Trademark of International Business Machines Corporation.
 (2) Trademark of Intel Corporation.
       IBM and Microsoft believe customers with OS/2 capable systems
and software developers with Windows applications will want to
migrate to OS/2.  IBM and Microsoft will provide support through
tools, seminars and technical assistance to help with the migration.
       IBM and Microsoft recommend that software developers implement
for the platform that best meets their application system
requirements.  Software developers, other than those with current
Windows projects under way, who plan to implement offerings for both
environments, are recommended to begin with OS/2.
       In addition to these announcements that focus on the desktop
environments, IBM and Microsoft also announce:
o   The two companies will work together to ensure that the Database
    Manager, Communications Manager, and LAN Requestor and Server
    functions of IBM's OS/2 Extended Edition are available to all
    OS/2 users.  These functions of IBM's OS/2 Extended Edition
    continue to be primary participants in IBM's Systems Application
    Architecture strategy.
o   For local area networks, the two companies intend to converge
    IBM's OS/2 LAN Server and Microsoft's LAN Manager.  These LAN
    products will be designed to run on the base OS/2 operating
    system in both Client and Server configurations, as LAN Manager
    does today, and will exploit 386/i486 functions.
       In summary, IBM and Microsoft are reaffirming their commitment
to provide a graphical user interface on all platforms, and
significantly extending the functions of OS/2 to provide a consistent
systems software base for the hardware platforms of the '90s.
       Actual plans are subject to review.  Announcement of any
product will be based upon business and technical judgment, and
continuing review of customer requirements.