Boston Globe: Big Blue lightens up

April 11 2007

A balanced view of the opportunity to take social networking into the business environment.  IBM's Steve Mills and Alistair Rennie are quoted, along with Gartner and IDC.  Here's Mills:

IBM is stopping short of entering the consumer market, however. Steven A. Mills , the IBM senior vice president and software group executive, said the new products are strictly for businesses.

"There is a level of industrial strength that's demanded in business," Mills said. "There's a very different and distinct set of characteristics for these kinds of technologies in business as compared to the stateless public Internet. We can't confuse these things."
While I'm highly conscious of the consumerization of IT, my position ultimately aligns with the big boss.  When "our users use Outlook at home" used to be the excuse for considering it as a Notes replacement, a common point we'd push back to was that users at home don't use calendaring & scheduling to book their dining room tables.  Familiarization is helpful but can also breed contempt.  There are dozens of companies that are successful providing technologies for business without a consumer presence -- IBM's position is not alone.

However, Google's Dave Girouard, quoted in the article, disagrees:
"There's been an artificial wall between consumer technology and enterprise technology," he said, "and it's starting to crumble."
If you agree with Girouard, then the question becomes, what takes the place of that wall?  In a small five-person law office, sure, maybe using consumer technology and reducing IT overhead makes sense.  But will that happen for a 50,000 employee manufacturing company?

Link: Boston Globe: Big Blue lightens up > (Thanks, Sarah)

Ed Brill O’Hare International Airport, E6 Category:  Lotus  Add/View Comments [27]

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  1. 1  Dennis Ellison  | 4/11/2007 11:47:58 AM

    It is has become routine reading about lost laptops with sensitive data. Many people just don't grasp the implications. I'm waiting for that first big incident involving social networking software. Is it possible to comply with government mandated security (SOX, HIPPA, etc.) and still use gmail?

  1. 2  Jeff Picco  | 4/11/2007 11:49:21 AM

    Hi Ed,

    Interesting article and comments. The company I work for is expected to hit 200,000 users by the end of the year and we are fighting the "consumerization of IT" big time. In fact, it's so strong that we are starting to lose some key battles because of costs. Not the cost of Lotus product, but because the business units will use their credit card to buy services from their vendor or choice while paying full retail because they can't get the product/service/support internally using the enterprise selected vendors.

    To add fuel to the fire, the inclusion of client side Java in some products is causing people to move to other competing technologies that have better backwards compatibility. (sorry - current sore point of mine)

    Another point that has been raised is a "quality of life" for the end users, meaning that if they can use products at work that they use it home it will make them more comfortable and hopefully more productive. We are all about making people feel good, ya know. So, the Outlook at home argument is still there and a win for the other team.

    Google is another big discussion topic. No, we aren't going that direction today, but it will be used at the weapon of choice when talking to IBM, MS and the others when discussing tech roadmaps, feature sets, tech requirements and price.

    We are even thinking of providing the "best" two or three solutions per segment internally and letting the adoption rates dictate what we use. Expensive? Yes, but eventually it will find the solution that works best for our user base, legal and security and give us the user confidence to shut down the outside services. Of course, that is just a theory still.

    Thanks,

    Jeff

  1. 3  Jeff Picco  | 4/11/2007 11:52:02 AM

    @1 - No compliance with SOX or HIPPA with gmail yet. BUT - google is working on all sorts of measures to make that happen. I know some guys on the inside and they have some interesting things coming out soon that blur the lines between googles infrastructure and your enterprises.

    The thing that gets me is how cheap they are selling storage for. I can't compete.

  1. 4  Ed Brill http://www.edbrill.com | 4/11/2007 11:57:45 AM

    @2 / 3, Jeff, I understand and obviously know more about the situation you describe. Yours is an interesting position because of the type of jobs employed by your organization. It's by no means unique, but it's also not the entire market characteristic.

    By the way, I didn't finish my thought on the old "users use Outlook at home" point. I think the trend is dramatically towards web-based mail systems for personal use -- google, yahoo, hotmail, etc.

  1. 5  Henry Bestritsky http://www.binarytree.com | 4/11/2007 12:51:27 PM

    I just spoke with a friend of mine that runs a 100K+ Notes shop and we are both of the same opinion that 5 years from now Google will be a huge competitor to Exchange and Notes. IMHO users will be living out of the "clowd" not only for email but for CRM, ERP and more. Ed, please do not make the mistake of calling Google a 5 user solution. You cannot continue to undersestimate them and should treat them as a real threat now before it's too late. You are correct that the trend is towards web-based mail for personal use. Windows 98 had Outlook Express for personal use and look where Exchange is now.

    I have heard the "five person law-office" analogy being used by various Lotus folks before and I do agree that you need a common way of downplaying Google, but I sure hope that you guys do not start confusing marketing spin with reality.

    Lakehead University (38K Users) that went to Google is not a 5 user law-office.

  1. 6  Jeff Picco  | 4/11/2007 2:18:05 PM

    @4 - Ed, I agree that web based mail is the way to go. I'm being asked to look in to what it would take to remove the Notes client from our standard desktop image and what impact that would have. The assumption was that we aren't using Notes based apps anymore, but in fact we have steady development being done - mostly for the browser though, but still some key apps are using the Notes client. So, it will be a few years before it will be an option to go thin client only.

  1. 7  Kurt B http://www.onthehoist.com | 4/11/2007 2:28:47 PM

    #5 - Lakehead's students are on gmail. Students have a much different usage pattern than enterprise employees.

  1. 8  Jeff Picco  | 4/11/2007 2:32:02 PM

    @5 - With the work load growing and pace at which we fly, mind share will dictate market leaders - at least I believe that. Google is very good with mind share. The movie "The Holiday", Google is shown in a scene very prominently while using IE.

    BTW - I have an 18 user office that just converted from Exchange to the business offering from Google. Really easy to setup. Since they don't care about security, SOX or any other compliance issues, it works for them and just saved them a ton of money. Wish IBM had that option.....

  1. 9  Ed Brill http://www.edbrill.com | 4/11/2007 5:57:08 PM

    Henry, so far the only large deals I've even heard given serious consideration to the Google offering are universities -- who are being offered it for free.

    I'm not ignoring it, but I think we're in a very different place in the market. They've commoditized the segment -- and it's your new buddies at MS who should be even more worried.

  1. 10  David Wilkerson http://www.geedavid.com | 4/11/2007 6:24:30 PM

    As an executive with a Premier IBM Business Partner, am not amused when the market segment we target (one that lies somewhere between "50,000 employee manufacturing company" and "a small five-person law office.") is considered fair game for vendors of consumer IT products.

    I am strangely reminded of the Daimler-Chrysler debacle. Many factors have influenced the apparent failure of that so-called "merger of equals". However a significant factor was the reluctance (refusal) of Mercedes to share technology with Chrysler. Their fear, perhaps well founded, was that high grade technology available in 'consumer' vehicles could undercut their own high margin luxury car business.

    The best hope for IBM Business Partners who focus on the SMB market is that IBM will continue and expand the robust development and marketing of Express products. Why not make feature rich but modestly powered products available and appealing to businesses where consumer driven technology spending is a fact of life?

  1. 11  emma  | 4/11/2007 10:00:41 PM

    There's a big difference between the way people use social networking software at home, and how it is used in a business context.

    Most home consumer tools don't integrate with each other at the level required for maximum business value. There would also be the temptation for workers to do personal stuff on work time.

    It would be relatively easy to develop business social networking tools that have a user interface with a familiar style, but the full functionality required for real work.

  1. 12  Alan  | 4/11/2007 10:28:33 PM

    Perhaps the reverse of "consumerization of IT" has to be looked at. Ed, you mention that home users don't use calendaring and scheduling to book the dining room table, but the advent of consumer use of BlackBerrys and Windows Mobile phones has placed the user of calendars in the forefront of those people. I for one avoid MS products like the plague, but Open Source options are lacking for use with the phones I mentioned above. Why can't IBM consider a consumer level version of the business software to knock the "I use Outlook at home" excuse out of the park? When Outlook is pretty much the only consumer product you can use with BlackBerry then why not look at that market? Off topic here - did you know that Windows Mobile6 comes with a trial only version of Outlook? Can IBM or an open source product fill that void?

  1. 13  Ed Brill http://www.edbrill.com | 4/11/2007 10:31:05 PM

    @11 "Most home consumer tools don't integrate with each other at the level required for maximum business value" Exactly why the forthcoming Lotus Connections product is designed all around integration of blogs with profiles, activities, communities, and bookmarks.

  1. 14  Peter de Haas http://www.peterdehaas.net | 4/12/2007 1:26:55 AM

    @9

    "I'm not ignoring it, but I think we're in a very different place in the market."

    I am not sure what place in the market you are referring to. If this market has something to do with (business) communication and collaboration than Google, Cisco, Web 2.0 solution vendors and also Microsoft are in this space.

    Commoditization is what is happening also in your market today, this is not a trend set by Google alone, others play this game very well to.

    What Jeff mentions in comment 2 on consumerization is on the agenda of very multinational and in the coming 3-5 years it will be implemented in various degrees in all enterprises.

    In summary IBM plays in the same sandbox and IBM is certainly not imuun to Google to name one, whether or not IBM has a strategy and are excuting upon it is a different question.

  1. 15  Ian Randall  | 4/12/2007 3:39:47 AM

    I think that all software vendors are facing the same threats and opportunities from the blurring of lines between the "Free" consumer market and the "Profitable" enterprise markets.

    After all Microsoft was unlikely to have significantly increased the free hard disk space on offer to Hotmail users if they didn't feel the competitive pressure from GMail and Yahoo. Nor is it likely that Google would have fine tuned their rates to the same extent to fend off competition from the Microsoft Search engine competition.

    The real challenge over the next few years for all software vendors is how each vendor will balances their profitable revenue streams with their free consumer (but cross-subsidized) service offerings. If they get that balance wrong they will be unable to remain in business for very long.

    I for one think that IBM is on the right track and I see no evidence that major businesses are going to replace their enterprise systems with consumer oriented alternatives in the short or medium term, so at the moment I feel that there is a good niche for an enterprise oriented version of these popularized Web 2.0 technologies.

    However, at the small end of the SME market, I think that vendors such as Microsoft are much more vulnerable than IBM from serious erosion of their user base from competitors such as Google and from high quality open source software and the Linux software platform. Bill Gates could not have picked a better time to switch careers.

    But anyway you look at it, I feel the next few years is going to be a bumpy ride for many software vendors.

  1. 16  Henning Heinz  | 4/12/2007 4:45:12 AM

    Microsoft is much more vulnerable in SME because IBM is near to no existance in this market.

    I am a little worried about something that reads like it is ok to loose market share as long as the major competitors lose even more.

    Interesting that the IDC quote is being ignored saying "Nothing's going to stop the guys who are already developing for the consumer market from stepping into the business market."[...]

    Of course you can always hope that if they try they do it as bad as companies like AOL did in the past but I would not rely my business model on the imcompetency of my competition.

    I also wonder what companies like Google have to balance because they have different profitable revenue streams than traditional software vendors.

    I follow IBMs approach of bringing Social software into the business market with interest. I think there are challenges and it has yet to be proven that companies accept the extra cost and added level of complexity.

    I agree that Microsoft will get a problem here but I really cannot care less for what is happening with Microsoft.

    So will the 50.000 employee manufacture company switch to e.g. Google mail anytime soon? I do not know but I do remember the stories that were around not long ago about deskless workers and 100.000 users on a single server. That discussion included companies like Daimler-Chrysler and ended in a whole new productline from IBM. Now times have changed but some questions remain.

    IBM has a strong position in the market and it will probably remain one of the companies that will find good answers for new challenges but I think IBM Business Partners might get into troubles.

  1. 17  Axel Janssen  | 4/12/2007 6:26:12 AM

    Like most things, this is a double edged sword. On the one hand IBM is supporting and using license-wise cheap openSource solutions in a lot of fields.

    On the other hand, the success of for example JBoss and interface21/springframework for transactional banking IT maybe generally blurs the line between business IT and home IT. They successfully used this "white label" stuff for mission critical stuff in one sector, so this might result in a lower barrier of entry for Google in the collaboration IT.

    For Lotus this could result in a need to work out even clearer, where the advantage of their solution for the customer really is.

    And it would be difficult to complain about commoditizing of sectors, as Eclipse for example is like Netbeans perceived as a commoditizers in the IDE field.

  1. 18  Volker Weber http://vowe.net/about | 4/12/2007 6:32:15 AM

    Google is providing a better service today than many employees enjoy in their "enterprise", from SMB to large installations.

    Secure and fast webmail, mobile access, roaming user, no software installation required. Excellent integration into BlackBerry mail, support for all mail clients with complete setup instructions, secure pop3 and smtp access from the outset. Multiple shareable calendars per person complete with access control. Ability to subscribe to multiple other calendars and keep them synchronized.

    And they are starting to make a big difference in spaces that Microsoft and IBM have not even touched. Create your own maps with data points, share them with others, use them to send navigation information to onboard car systems (BMW).

  1. 19  Kevin Mort  | 4/12/2007 8:26:20 AM

    First off the idea of "consumer IT" is rather funny, even if you take IT strictly as "information technology" and not imply business use.

    Anyway, to the real point here.

    @12 - I would tend to agree that more and more home users are getting into the use of Blackberry and WinMobile devices. Thus, yes the calendaring features come into play.

    As we look at future IT consumers, this will likely increase. The fact is that many of these technology providers gravitate to Outlook integration because they consider it the most widely available. Note I do not say widely used, but available. If you have a Windows system, chances are you have Outlook in some version.

    Fact is anytime you go towards the consumer side of things, if a desktop mail client is supported it will be Outlook nearly 100% of the time, and little if anything else.

    Of course on the server side, Blackberry has so far not been interested in having their product run on anything but a Windows server either.

    To the exposure of Google. It is absolutely huge. They are the latest 800lb/363kg gorilla. Everyone knows it, and many fear it. Amazing considering I remember a short few years ago when we found this "cool new search engine called Google." TV, movies, they're everywhere and I would argue they're a competitive threat to everyone, including IBM.

    K.

  1. 20  Christopher Byrne http://www.controlscaddy.com/ | 4/12/2007 9:56:45 AM

    @1 - SOX does not have any security mandates.

  1. 21  Axel Janssen  | 4/12/2007 10:37:41 AM

    As we all know "Better service" depends on the particular demand of the particular customer. The fact that their email is hosted out-house when using Google certainly is a huge show stopper, at least I think. And there are certainly other points, too, which speak against Google.

    But its to be taken serious as from my pov its a smart company.

  1. 22  Nathan T. Freeman http://nathan.lotus911.com | 4/12/2007 1:37:13 PM

    @20 - no, it doesn't. But I think even you would agree that if a company that documented it's risk management procedures (which IS mandated by SOX) said "we run all mail and C&S services through an external web-based service that's renowned for privacy violations and shakey IP protection" that shareholder confidence would suffer.

  1. 23  Chris Reckling http://www-10.lotus.com/ldd/insidelotusblog.nsf/ | 4/12/2007 3:54:15 PM

    I picked up on the same issue, Ed, so this is a useful discussion. For me, personally as a user, I use gmail and yahoo for personal use, but wouldn't want to live in it all day at work.

    Chris

    (See Inside Lotus for more on this article.)

  1. 24  Christopher Byrne http://www.controlscaddy.com/ | 4/12/2007 5:50:16 PM

    @22 - That does not make it a requirement Nathan. If they never use email for anything that impacts their financial systems, then it does not need to be documented at all.

    Yes it would be foolish, but if the risks are addressed and compensating controls are in place, then...yada yada yada...

  1. 25  David Bell  | 4/13/2007 11:19:16 AM

    @24 - "If they never use email for anything that impacts their financial systems, then it does not need to be documented at all"

    When you lose the boundary of control that is the edge of your network, how do you even know whether this is occurring ?