Last Wednesday, IBM kicked off their pre-Lotusphere PR barrage by claiming momentum for Lotus Notes.  Throwing out a half-dozen stats, IBM seemingly mounted an unassailable argument for the resurgence of the once-thought-dead Notes, except for one thing – most of it was false.

 

Case in point, early versions of the IBM release quote Gartner stats about market share, but by Friday, IBM had doctored the release to remove the Gartner stats.  Maybe this article in Computerworld (Au contraire: Exchange's lead over Notes is actually 'getting bigger and bigger,' says Gartner <http://www.computerworld.com/action/article.do?command=viewArticleBasic

&articleId=9126118&intsrc=news_ts_head> ) had something to do with it?

 

David Scult, Microsoft’s GM for field and partner marketing, does a great job setting the facts straight here <http://www.microsoft.com/presspass/features/2009/jan09/01-16QAcult.mspx>.  Among my favorite highlights from David:

 

·         In response to IBM’s claim that Notes is in half of the Fortune 100 – “Lotus Notes was once in at least 67 percent of the Fortune 100 companies, so in that context, 50 percent now isn’t terribly impressive.”

 

·         And according to a Ferris Research survey <http://www.ferris.com/?p=318858> of 917 organizations worldwide, Exchange has a 65 percent share of the messaging market, while Notes/Domino has a 10 percent share.  Ferris’s findings are consistent with Gartner’s lead e-mail analyst, Matt Cain, who publicly stated <http://www.serverwatch.com/trends/article.php/3682041> last year, “We forecast that Microsoft will get 70 percent of the commercial e-mail market by 2010.”

 

Even the Lotus Notes community has compiled a list of companies that are switching to Exchange from Notes, citing customers including ExxonMobil, JP Morgan Chase, Deutsche Bank, and Novartis.  <http://dominoorexchange.pbwiki.com/>.   (Note: you need a password to access this wiki.)

 

If you really dig into IBM’s numbers, you’ll find that they have started quoting “licensed” Notes users.  A licensed user with no timeframe is exactly that – a user that either is, or was, licensed on Lotus Notes.  Is that a useful market figure, quoting licenses sold in 1994?  Using the same approach, IBM could also tout 100+ million ‘licensed’ 123 users.

 

But the real question this IBM FUD raises is this:  why is IBM so desperate to prove that Notes is not slowly dying?  Why is IBM so scared?  My guess is:

 

·         IBM is steadily losing market share based on more than 10 million people abandoning Lotus Notes for Exchange and SharePoint. The momentum is increasing as more than 2 million began the switch in the last 6 months.

 

·         This transition is hastened by economic urgency to cut costs and the availability of Exchange Online and SharePoint Online <http://www.microsoft.com/online> , to which IBM has no answer (IBM’s current ‘hosted Notes’ offering is only for orgs from 1k to 10k users, and is not multi-tenant <http://www.gartner.com/DisplayDocument?doc_cd=162564&refg_rss> cloud-computing, and press reports indicate that IBM is even losing market share to cloud-based consumer email applications).

 

·         In the end, the loss of Notes means it is harder for IBM to sell Sametime, Connections, or Quickr.

 

·         And, if you’re IBM, the more critical issue is that IBM Global Services, which accounts for huge portions of IBM’s profit, looses the opportunity to charge IBM customers consulting and integration fees to make its disparate technologies work together.

 

Marian Anderson said “fear is a disease that eats away at logic”, and sadly, that seems to apply even to respected market leaders such as IBM.  We saw the first signs of fear and desperation last Wednesday, and it was not becoming of a respectable company such as IBM.

 

I look forward to seeing what else IBM has coming this week, and I hope they will hold the bar a bit higher for their PR.  Whether they do or not, we will be on this blog offering our perspective on the news.

 

 

Julia White

Director of Exchange Marketing

Microsoft