Edited Thursday, August 6, 2009. Note: The original post mistakenly referenced the wrong Ferris Research survey. This reference has been corrected.
Today, in our fourth quarter earnings call, we shared the latest results of our efforts to free customers from the costs and antiquated architecture of Lotus Notes and Domino. In our last fiscal year (July 2008 - June 2009), more than 4.7 million people began the switch to Exchange and SharePoint from Notes. In today’s economic climate, this is strong testimony to the cost-savings and efficiency gains that companies can get by moving off Notes. Customers are recognizing that investment, even in tough times, can make them stronger for the long haul.
We’re seeing a few key trends driving these migrations:
Cost Savings Today, Productivity Tomorrow
Cost savings is the number one driver for migrations. Notes systems simply cost more to run and manage. A Ferris Research survey of 917 companies Ferris Research survey of 136 organizations found that Notes systems can cost twice as much as Exchange 2007. But, most businesses have their eyes on the longer term productivity gains that Exchange and SharePoint deliver. With today’s economy, businesses understand that investing in the right applications can reduce costs in the short term and drive greater efficiencies, productivity and overall business value in the long run.
Online Services Ignite New Demand
The launch of Exchange Online and SharePoint Online is a key driver for migrations. This past year, as these services have gone live, some major Notes customers – including Coca-Cola Enterprises, GlaxoSmithKline and Ingersoll Rand – are making the move from Notes to the cloud because of Microsoft’s software plus services strategy. In fact, GlaxoSmithKline will save an estimated 30% over the next year as a result of making the switch. This is a strategy that gives these businesses the ability to combine software and services and segment their users to lower costs in a smart way.
On the other hand, Notes customers wanting a cloud-based solution have limited options. IBM’s “Goldilocks approach” (companies cannot be too small or too big to move to the cloud as the IBM service starts at 1,000 users and stops at 10,000) and the added costs of cobbling together solutions based on different platform choices (Domino, WebSphere, DB2) give customers few choices. As a result, Notes customers are choosing Microsoft Online because it provides them with a flexible, single platform that is accessible from a familiar interface across the PC, phone and browser.
The Developer and Partner Ecosystem
At 400,000 strong, our partner and developer communities are amazing! Every one of those 4.7 million Notes switchers started their migration with a Microsoft partner, and today, those partners are better than ever at helping customers cost effectively move off of complicated, proprietary Notes applications. Eddie Bauer was able to move over 1,000 people off Notes and migrate their applications over a weekend. And, when it comes to building the next great application, developers and partners are lifeblood. The power of any collaboration platform lies in the applications you can create. With Notes, the skills are dwindling and expensive. With SharePoint, they are booming and in-demand. Just take a look at the trend from Indeed.com, and you can see where companies are investing for the future.
No doubt IBM will respond by saying this blog post is just FUD. But objective third-parties like Gartner differ with that assertion. IBM may even respond with a press release announcing ‘new’ customers, who are, in most cases, simply deciding to keep Notes a bit longer. But with millions making the switch, I suppose a company choosing to keep Notes is pretty newsworthy these days.
Director of Exchange Marketing
Actually, I think the phrase used to describe this was not FUD, but "lies and half-truths".
I've worked at three very large companies in California that have tried to switch to Exchange from Domino. The project starts and everyone is excited, but the contract never is completed. The cost always ends up too high or has a lacking feature set (moving from a typical Notes client / Domino server system to a hosted OWA system).
I'm glad you linked to Gartner because Ferris has been losing respect in the industry for years. They are thought us as mart of the MS marketing team, more than an analyst firm.
On a "good" note, most IT managers don't have time to keep up on what is really going on and if they can do a quick google search to find this, they will use it to justify any quick decision they are forced to make. Makes them look good, makes you look good. Who cares if the claims are accurate.
I would actually love to see a true, in-depth total cost of ownership analysis of both product suites. Not just Outlook/Exchange vs Notes/Domino. Now that would be useful to customers of both products.
I came here from Ed Brills blog who had sent an open letter to Msft:
http://www.edbrill.com/ebrill/edbrill.nsf/dx/an-open-letter-to-ferris-research-and-microsoft?opendocument about the above blog post in which you cite Ferris.
Since you have not responded to his very public blog post and @vowe has asked your @brandonhoff on Twitter who's version is true. Mr. Brandon Hoff asked to address this on this blog.
Is Ed Brill lying? Would you care to answer his open letter?
Thank you very much
In reviewing Ed’s blog post, I realized that I erroneously referenced the wrong Ferris report. I’ve subsequently updated the blog, as you can now see, to reference to correct Ferris report. This report is about the on-going costs of running Exchange vs Notes and this report does show that the cost of Exchange 2007 is half that of Notes 7. I did not reference the Notes 8 costs in the report, because I consider the survey number too low and in my conversation with Ferris they agreed it should be caveated due to low response numbers.
Despite Ed’s remarks, in my experience, Ferris has demonstrated they are a knowledgeable firm with a solid grasp on the market and have always found them ethical and honest.
thank you very much for your prompt response. This is very much appreciated.
I am no insider and do not have access to the Ferris report.
Does running a Notes system in the report include Databases? So for instance Database Administration and Database Development?
I work for a company that runs a website including shop, a CRM System, the Registration System and many internal databases based on Notes. These systems are developed internally so this "cost" is associated with "running a notes system"
Can you tell me if in the report "running a notes system" is based only on the email part of it?
Thanks a lot for your response
Hi Andre - The costs in this study were specifically around e-mail running Notes/Domino explicity. It didn't look at costs associated with non-email related applications / databases. Hopefully that clarifies, but let me know if not.