Like Oracle and Microsoft, IBM also has made acquisitions such as buying Rational, Duncan acknowledged. IBM, however, has steered clear of buying applications companies and instead focuses on middleware, software development, and tools for system management, he said.

"Unlike Oracle, which buys application companies to expand their customer base, we acquired some 20 companies over the past three years to extend our technology capabilities, to extend our middleware capabilities," Duncan said.

Microsoft was not able to provide responses by press time.

Also, in a study recently released by Gartner Dataquest, IBM was found to be the leader in revenues in the application development tools and project portfolio management tools space for 2005. The company had a 25.4 percent market share in this $7 billion market space, with Microsoft's 10.5 percent share coming in second.

"IBM was the leader in terms of software revenue, which includes licenses. It includes upgrades, updates, support, maintenance," and software-as-a-service revenues, said Laurie Wurster, research director at Gartner Dataquest.