IBM has just given Microsoft another 125 million reasons to worry about the future of its one of its two biggest money spinners, Microsoft Office. Big Blue has announced that the next version of its Groupware suite Lotus Notes will include the three main applications of the MS Office suite, a word processor, a spreadsheet and a presentation program.

What's more, IBM has stated that not only will the office productivity applications be compatible with Microsoft Office as well as the ISO standard Open Document Format (ODF), but the existing 125 million Lotus Notes users will be able to upgrade to the new version for free.

The new office productivity tools will also be tightly integrated with the existing groupware functions of the Lotus Notes system, making it an attractive proposition for enterprises to use them instead of the Microsoft versions.

Microsoft Office generates about one third of the software giant's revenue and about half of its profits. However, revenue growth from Office has virtually stalled, growing just 2% for the first nine months of the current fiscal year compared with the previous year. The market is virtually saturated in the developed world and free open source look alikes, such as Open Office.org, make Microsoft's relative expensive Office suite a tough sell in emerging markets, such as China, India and Eastern Europe.