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IBM denies re-entering PC market with Russian deal

Big Blue says it's not getting back into the PC market, despite selling "Microsoft-free" PCs running Linux and OpenOffice in Eastern Europe.

IBM has said it is not getting back into the PC market, despite selling "Microsoft-free" PCs running Linux and OpenOffice in Eastern Europe.

"We're not getting back into the PC business," said an IBM spokesman, after the company announced deals with system integrators in two Eastern European countries last week.

It is IBM's intention to sell the so-called "Open Referent" systems, based on Red Hat Linux and the company's own Lotus Symphony software, which uses the open-source OpenOffice productivity software, in Eastern Europe.

IBM sold its PC division to Lenovo in 2005 for $1.75 billion, and this is the second indication of overlaps between the companies; Lenovo, having dropped the IBM brand from its ThinkPads, is now moving into servers, licensing the xServer brand and technology from IBM.

IBM will work with VDEL of Austria to make the boxes, which will be distributed by LX Polska of Poland. They will use open-source software instead of any Microsoft components and could cost half as much as the Microsoft-based alternative, according to some reports. IBM said there was a big demand from large businesses and government agencies in Eastern Europe and Russia, including the Russian Ministry of Defense and Aeroflot airline. The RusHotel hotel chain said Open Referent could cut its costs in half.

Part of the driver for the deal seems to be dissatisfaction with Microsoft's document standards, with governments demanding the OpenDocument Format instead of the series of formats used in Microsoft Office applications. Some claim that the Linux PCs are also more secure than their Windows equivalents.

"We are extremely excited that we finally have an alternative document-management offering to Microsoft, based on open source, that fits our needs," Aleksandar Spagnut, director of RusHotel, said in a VDEL press release. "We are already starting to implement this and are happy that IBM is again taking the lead in providing a total solution for the small- and medium-sized market, based on open source."

"Open Referent is a highly competitive alternative to Microsoft offerings for large organizations," said Oleg Churko, director of the Research Institute for Information Security in Minsk, Belarus. "Taking into account the unmatched security offered by the Linux platform, it will set a new standard for document management."

Peter Judge of ZDNet UK reported from London.