WSJ.com - IBM, Microsoft Hunt Same Prey: The Small-Business Customer "With the announcement Wednesday, IBM turns up the heat. Instead of matching Microsoft pricing, as it had been doing until recently, IBM is undercutting it. It will announce a $20,000 price for its WebSphere Commerce Express, used to run Internet-based businesses, which it says is 24% below Microsoft's competing product, called Commerce Server Standard. Earlier, IBM cut the price of its DB2 Express database software to $5,449 per 50 users, well under Microsoft's SQL Server at $7,967.
Stephen O'Grady, an analyst with Red Monk LLC, a small-business market consultant in Bath, Maine, says: "IBM is pricing very aggressively. But they're going against the incumbent here. Lots of small and medium businesses just think Microsoft and go to them to buy a solution."
As Bill Gates once said to Jim Manzi, many years ago: "It's not a good idea to get into price competition with someone who has more money than you do."