eWeek: IBM Lotus Soars Under Departing GM

April 18 2008

eWeek comments on the Lotus performance during Q1....

IBM quietly promoted Lotus Software Group General Manager Mike Rhodin two weeks before his division reported a 17 percent year-over-year increase in first-quarter earnings April 16.  ...

Ovum Research analyst Steve Hodgkinson wrote April 3 that since Rhodin took the helm in 2005, Lotus has sported 13 (14, as of April 16) consecutive quarters of growth in a multibillion-dollar market for workplace collaboration software.
The Lotus Notes and Domino customer base rose from 118 million to 140 million, while the Lotus Sametime instant messaging and Web conferencing client grew from 13 million to 100 million users.
"Rhodin has put in a good stint at the Lotus Software Group, presiding over a significant turnaround in the fortunes of what was an ailing brand when he took over in 2005," Hodgkinson wrote.
"Lotus was muddling along sideways (and downwards in the eyes of many users--even Lotus fans) in the early part of the millennium and suffering under the confusing IBM Workplace positioning and the long-awaited refresh of the core Notes platform."
The article then goes on to speculate about which Lotus products contributed to the growth during Q1.  I am not authorized to discuss specifics of IBM financials publicly.  Thus, all I can say is, the Lotus Notes business is having a very good run in 2008.

One other interesting point of IBM earnings was that 65% of IBM's overall Q1 revenue came from outside of North America.  The Notes business trended similarly, with Europe being especially strong right now

Link: eWeek: eWeek: IBM Lotus Soars Under Departing GM >

Ed Brill AA3977, ORD-GRR, Seat 4B Category:  Lotus  Add/View Comments [17]

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  1. 1  Paul Robichaux http://www.robichaux.net/blog | 4/18/2008 12:03:22 PM

    However, when you factor in the weakness of the dollar against the Euro, and other currencies in EMEA and APAC, IBM's quarterly earnings increased 4%, not 26%. That's a significant difference.

  1. 2  Ed Brill http://www.edbrill.com | 4/18/2008 12:06:15 PM

    Constant currency is relevant, but that delta is different from division to division. Speaking for myself, the Notes growth was organic, not just paper.

  1. 3  Volker Weber http://vowe.net | 4/18/2008 5:12:11 PM

    If things don't work so well in 2008, then it's probably not the new GM, right? :-)

  1. 4  alan lepofsky http://www.alanlepofsky.net | 4/18/2008 8:16:03 PM

    if things do well, the new gm will have done good, right?

  1. 5  Dave Madison  | 4/19/2008 12:08:13 AM

    "The Lotus Notes and Domino customer base rose from 118 million to 140 million, while the Lotus Sametime instant messaging and Web conferencing client grew from 13 million to 100 million users."

    Are those real, actual, everyday users? Or are those simply licenses sold that my not yet have been deployed or may never get deployed? I'd be curious to know Ovum accurately tracks usage of software by end users. Particularly at that level of numbers.

  1. 6  Henning Heinz  | 4/19/2008 6:32:00 AM

    I think the Sametime numbers include all Lotus Notes passport users (as those have a basic Sametime entitlement). Have there ever been disappointing Lotus sales figures mentioned on edbrill.com?

  1. 7  Volker Weber http://vowe.net | 4/19/2008 9:22:54 AM

    Alan, of course. "Success has many fathers" is a German saying.

  1. 8  Ed Brill http://www.edbrill.com | 4/19/2008 9:23:26 AM

    @5 Over the lifetime of the product, IBM/Lotus has sold 140 million Notes licenses. No, they are not all active today. That's no different than MS practice - where Exchange CALs have been bundled into Enterprise Agreements for seven years, and thus even I am "counted" as an Exchange user (at least once!). Also IBM customers are more likely to stay on maintenance through the lifetime of their license purchase, since maintenance = updates and support, versus the MS software assurance approach of updates only.

    @6 There haven't been any disappointing sales figures mentioned on edbrill.com because in the 14 fiscal quarters that I have been the WW sales executive for Notes and Domino, we only had one "bad" quarter, where the revenue year to year for Notes was flat (Lotus, however, grew in that quarter). Lotus overall has grown for 14 quarters consecutively.

  1. 9  Volker Weber http://vowe.net | 4/19/2008 9:24:11 AM

    Dave, it's the number of licenses sold since Notes 1. IBM does not report actual users.

  1. 10  Jim Bernardo  | 4/19/2008 11:30:04 AM

    @8, Ed, trust me, we go to great lengths to NOT count you as a user :-)

  1. 11  Ian Scott  | 4/19/2008 1:51:49 PM

    @10 - Just Ed or all of IBM? And what about me?

    8-)

  1. 12  Randy Shimizu  | 4/19/2008 8:40:22 PM

    Ed

    This is really great news, but why has IBM been so reluctant to release license and other figures on notes before...?? Figures like this would have been great to dispell the FUD that Microsoft has been dishing out. Actions like this is needed to defend notes market share.

  1. 13  Henning Heinz  | 4/20/2008 4:37:30 AM

    Those figures have always been out?

  1. 14  Ed Brill http://www.edbrill.com | 4/20/2008 9:08:35 PM

    @13 I'm pushing the edges of what I can or cannot share in public... probably more willing to do so because of comments like @12.

    More texture, from someone who can speak about IBM financials, can be found in the follow-up eWeek article: { Link }

  1. 15  Jen Tan  | 4/22/2008 3:12:06 AM

    Is this really amazing growth? The previous Lotus administration grew 4% last year, with no acquisitions (rate adjusted) { Link } . This year they had acquisitions to contribute to the 'organic' growth.

  1. 16  Ed Brill http://www.edbrill.com | 4/22/2008 7:26:27 AM

    @15 read the follow-up article I linked in #14. It specifically called out Notes/Domino and WebSphere Portal for double-digit growth...not related to acquisitions.

  1. 17  Craig Wiseman http://www.wiseman.la/cpw | 4/23/2008 8:54:14 AM

    @16 What's especially telling to me is that (in my very recent experience), IBM salesfolks (present company excluded) are incented and give much more attention to Portal, Websphere, and Forms, and yet ND is doing quite nicely. I would have commented earlier, but I've been hip-deep in moving an Exchange shop to ND/Sametime/Quickr this week....