Lotus Symphony, the desktop productivity suite from IBM that was released as a free download last week, has been downloaded 100,000 times since it was launched at the start of last week.

The suite includes word processor, spreadsheet and presentation software that was spun out of IBM’s Lotus Notes’ package. Mike Rhodin, general manager of collaboration and Lotus software at IBM, described the product’s performance so far as a “tidal wave of adoption.”

“[It] is creating an independent mass of users accustomed to open documents and poised to benefit from the innovative new capabilities they will soon afford,” he said.

Despite protestations from IBM CEO Sam Palmasino that the company’s planned software expansion would not involve entering direct competition with the applications giants SAP, Oracle and Microsoft, the Lotus Symphony release is an unmistakable attempt to disrupt Microsoft Office’s desktop hegemony.

So why is IBM attempting to muscle in on a space it seemed to have given up on many years ago, and in a way which will earn it no revenue? The answer lies in its ‘end-to-end’ software strategy.

IBM does not sell business applications but it does sell almost everything one needs to support them, from collaboration tools and content management software through to middleware and, of course, hardware. And it is doing so successfully; revenue from its WebSphere middleware range, for example, grew by 20% in 2006, the company says.

It has made shrewd acquisitions, says Ovum analyst Mike Davis, such as that of content management vendor FileNet in 2006, which complement existing products and make becoming an IBM-only shop more appealing. Its commitment to open standards has made the integration of its various products, something that dogged the company during the 1980s and 90s, much easier.

Another driver playing on IBM is the opportunity in the small and medium business market, one of the fastest growing in the software industry. “We never used to be in the business of volume sales,” explains IBM’s software chief Steve Mills, “but now we are selling through SMB channels.”

The logical extension of these two strategies, then, is to have IBM software on the desktop that can integrate easily with the rest of its software stack. Ovum’s Davis believes that IBM’s hope is for Lotus Symphony to spread virally.

As users become familiar with the Lotus interface, the barriers to adopting IBM software, such as its unified communications toolset, will dissolve. “IBM has realised the interface is absolutely key,” says Davis.

If Symphony is successful (of which there is no guarantee; Google’s attempts to uproot Microsoft Office have not been as successful as it hoped), then IBM will have a significant presence in software from the desktop top to application development to integration to systems management and more. The question then will be, does it have the nerve to complete the puzzle and enter the applications space?