IBM and Microsoft showed off their social software for businesses at the Enterprise 2.0 Conference in Boston today in a three hour session meant to compare and contrast their offerings.

While both vendors showed their products could integrate with existing e-mail systems (especially e-mail systems that they sell, such as Notes and Exchange), IBM’s Lotus Connections looked, at minimum, a year or more ahead of SharePoint in its social computing capabilities out of the box.

It was a lot prettier looking, too.

After winning a coin toss to present first, IBM officials went through a detailed tour of the Connections offerings. (We did an extensive overview article about Connections here, but the software basically consists of blogs, bookmarking, profiles, communities and activities).

The presentation showed how the tools work together in conjunction with one another. For instance, on the profiles page, a person could see colleagues’ bookmarks, projects, expertise, and other relevant information, and have that information moved through feeds to other parts of the Connections suite. Tags with areas of expertise were not only attached to articles or content, but to people as well.

Connections has a good-looking user interface that even Venky Veeraraghavan, program manager at SharePoint, admitted during his closing remarks are currently much better than SharePoint. Like all user interfaces, you’d have to see it for yourself to understand why, but tag clouds, widgets containing relevant bookmarks, and a detailed social graph that visualized a person’s degree of separation from others in the organization stood out the most.

SharePoint needs work with its social computing features.

SharePoint is still largely what it started as back in 2003: a document management system. Though they have made social software add-ons (we examine them here in detail), it seemed to be lagging behind Connections for out-of-the-box social computing options.

Microsoft has begun remedying the problem by partnering with more Enterprise 2.0 vendors such as Connectbeam, Atlassian and Newsgator (the new partnerships were announced today). Assuming a customer already has SharePoint, he or she can buy these pure play offerings and integrate them into the platform.

“More and more partners are turning to SharePoint as the foundation for building enhanced social computing tools, as evidenced by a number of new technologies from the partners, like Atlassian, NewsGator, and blueKiwi,” Rob Curry, Microsoft’s director of SharePoint, told CIO over e-mail this weekend.

With SharePoint’s market penetration, a lot of these vendors would be foolish not to get on board. According to Curry, Microsoft has sold 100 million licenses, and says the product contributes $1 billion in revenue. With many organizations already using it, they are looking to build social features top of it, not around it.

But the guidelines for the face-off presentation today was that the vendors present what a customer gets right when they buy the product, and as far as social computing goes, this wasn’t flattering for SharePoint.

The SharePoint wiki was static. As analysts have told me, it lacked robust version control and had sparse editing features. Microsoft’s MySites – social networking profiles for the enterprise – looked a little better but still left much to be desired in terms of design.

For instance, if someone wanted to examine their place within the hierarchy of an organization, it was presented textually like the inbox of an e-mail system. In Connections, it was done mostly with pictures of the people and big buttons in which to interact with them over e-mail, phone, or IM. It’s not that SharePoint doesn’t have such capabilities; they just aren’t presented as well.

Throughout the demo, the presenters tried to incorporate Office documents into the

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