Ferris: Microsoft Exchange Online Won’t Particularly Facilitate Notes-to-Exchange Migration

December 23 2008

Ferris's Nick Shelness cuts through the hype on Microsoft's Exchange Online announcement and its reality as applied to Notes customers:

The November 17 announcement of Microsoft Exchange Online included a case study in which a company migrated away from Notes using Microsoft Exchange Online. This is mainly marketing gloss.

Microsoft has been announcing the death of Notes for five years. Ferris survey data indicates that in the enterprise, Microsoft and IBM/Lotus are on the whole maintaining their penetration.  ...

Ferris, therefore, expects to see a rash of pilot Notes migrations to Microsoft's Online offerings. Whether these will progress beyond the trial stage, only time will tell. We suspect that many of them will not.
So it looks like Microsoft got about a month of runway to try to use their latest competitive distraction...and it has been a massive fail.  As we wind down the year, we're seeing wins in customers that have been previously announced as supposedly-migrating to Exchange Online,  We're getting traction with IBM's Lotus Notes Hosted Messaging, and it's leading to some really interesting discussions with customers about "messaging economics" overall.  That's Ferris's point -- the full cost picture really needs to be evaluated, and even an informed analysis won't justify a migration, ever.

Link: Ferris: Microsoft Exchange Online Won't Particularly Facilitate Notes-to-Exchange Migration >

Ed Brill | Highland Park, IL USA Category:  Microsoft  Add/View Comments [21]

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  1. 1  Peter de Haas http://www.peterdehaas.net | 12/23/2008 12:57:53 PM

    { Link }

    And can't wait for some of the other casestudies to arrive. Some large global organisations have migrated off of Lotus Notes this year. I'm sure you also know the names ;-)... they are huge international companies ...

    Ferris was quite clear back in february with regards to marketshare within one of their surveys :

    { Link }

  1. 2  Jim Casale http://www.jimcasale.net | 12/23/2008 1:10:24 PM

    @1 Your link to the PRNewswire site sounds more like a Binary Tree commercial than anything with substance.

  1. 3  Ed Brill http://www.edbrill.com | 12/23/2008 1:10:56 PM

    Yes, but that market share "survey" has been pretty widely dissected based on sample bias and methodology. I'm really happy with Ferris's instincts in the messaging market, but we agreed to disagree on quantitative analysis.

  1. 4  Peter de Haas http://www.peterdehaas.net | 12/23/2008 1:13:02 PM

    @3 so this particular info related to marketshares by Ferris was not accurate, the other info is .. I see

  1. 5  Ed Brill http://www.edbrill.com | 12/23/2008 1:17:36 PM

    oh, and the Binary Tree press release has one key word -- "enabled". It doesn't say the migrations are done. I always enjoy proof-reading your efforts.

  1. 6  Peter de Haas http://www.peterdehaas.net | 12/23/2008 1:19:39 PM

    @5 Let's prentend no one is migrating .. happy holidays :-)

  1. 7  Keil Wilson  | 12/23/2008 1:49:17 PM

    @6 It's create to see such mature comments coming from the other side. I'm looking forward to your next post: "I know you are, but what am I!"

  1. 8  Keil Wilson  | 12/23/2008 2:04:13 PM

    Wish I could just edit "create" to "great," oh well.

    In all seriousness, though, I've recently been a part of a rather large...cut-over...to Exchange. Calling it a migration would imply that data was actually converted/moved from one system to the next. The bottom line is that when it comes to 10,000+ mail users, you're working in a complicated environment. Don't let any sales pitch convince you that a particular software package or service can suddenly make everything easier. It takes talented people to manage an email install that large no matter what email/calendaring package you choose to use.

  1. 9  Brett H  | 12/23/2008 2:18:24 PM

    So, what Nick is saying is that companies really do want to move to Exchange Online, and are actively persuing it, but the only thing holding them back is that it is cost prohibitive? Gee this sounds all too familiar.

    Has anyone addressed the reasons why they are looking at moving to Exchange Online in the first place? How do so many of these companies know so much about it?

  1. 10  Darren http://www.dadams.co.uk | 12/23/2008 5:36:57 PM

    @1, 4 and 6 - with the number of customers I'm talking to about Linux and Symphony, I'm content for Microsoft to continue being smug and oblivious to the danger they're going to face.

    Also, if they want to believe migrations are one-way traffic, go ahead.

    @6 - sure customers are migrating. Even the most loyal of advocates wouldn't deny that. Are they migrating for the right reasons? Not that I've seen. No-one has ever told me that they think Exchange will be more reliable or offer more. They've told me they think Exchange will be cheaper, but when they look at TOTAL cost of ownership and we add the costs (and compare to the ongoing Domino costs) they see that's not true.

    I guess the one good thing about Exchange Online is that, with Exchange 2007 being a dead architecture, Microsoft will be the ones responsible for migrating the data and service to 'whatever' in the future. I'm sure that'll be seamless and cause no disruption to any customer.

  1. 11  Darren http://www.dadams.co.uk | 12/23/2008 5:44:21 PM

    Mentioned in the Forbes article... "it also continues to enable these customers to continue to run their on-premises Lotus Notes applications seamlessly with Microsoft Exchange Online".

    So they're paying for Exchange Online and they're also incurring a cost of ownership for their Notes applications. Genius. I hope they're proud of that particular money-saving effort.

  1. 12  Nathan T. Freeman http://nathan.lotus911.com | 12/23/2008 10:16:34 PM

    @11 - So they're paying for Exchange Online and they're also incurring a cost of ownership for their Notes applications. Genius.

    Darren, while you will find no greater advocate of the Notes/Domino platform than me, I tend to wonder if you understand how many of your customers operate.

    I regularly see large Domino shops who don't archive or clean mail, and therefore have an AVERAGE of 1GB of mail per user. Or conversely, run entire enterprises with 100MB quotas.

    Cost of ownership is not a function of the platform so much as the implementation of it. The perception of TCO by IT is what it costs them to support users. The perception of TCO by business is what they have to put up with on a given platform.

    When IT can't be bothered to implement retention policies, provide clean up services, educate users, build full-text indexes, add hard drives, or click on a checkbox to establish a DR cluster -- the consequences fall on the users. They perceive that Domino has a huge TCO, because their experience on the platform has such a huge cost *FOR THEM*. Not for IT.

    If you set users at a 100MB quota in Domino, then your users will spend 1 day a month doing nothing but cleaning up and archiving email. That's 5% of their time doing nothing but managing email. In a very real sense, that means that 5% of corporate payroll cost is spent on the email system.

    Does it really matter what the platform is at that point? It's a MASSIVE TCO, no matter who the vendor is.

    The solution is that the vendor needs to correctly identify to senior management that this terrible experience is about some IT policy, not the platform it's implemented on.

    Sure, you can migrate platforms and get a different kind of problem. Maybe it takes you longer to get to 100MB of email now. Maybe it's a little easier to archive off that extra 60MB each month. But a year down the line, it's going to be exactly the same process of spending 5% of payroll on filing & archiving email -- all because some IT manager wants to make sure that hardware and software costs don't show up on HIS budget.

    The problem is: IT is a traitor when you make that pitch. So how do you make the sale without burying the guy the implements your software?

    I wish I knew, man. But all that free money that MSFT throws at IT managers to get them to pimp Exchange? That's how it pays off. The CEO hears the story about how IT is limited by Domino and Exchange would solve all their woes -- and so he implements Exchange with a 500MB quota instead of a 100MB quota, and suddenly it's the platform that's the big win.

    Tragically, you can only undercut that with the same solution that the competition uses: a bribe. On the bright side, you don't necessarily have to bribe the IT manager. You could bribe the CFO (who's generally a more trusted lieutenant) with a free SLA audit. After all, it's not like you can't calculate the costs/benefits of bumping quotas from 100MB to 500MB.

  1. 13  Paul Mooney http://www.pmooney.net | 12/24/2008 3:57:56 AM

    @Peter ASW responses like that are sooo 2007. The smug underhandness of your comments are Microsoft in a nutshell.

  1. 14  Darren http://www.dadams.co.uk | 12/24/2008 4:15:03 AM

    @12 - "I tend to wonder if you understand how many of your customers operate".

    Well, I'm not at the coal-face of running any Domino infrastructures so I'm certainly not going to pretend I know as much on that subject as you Nathan or some of the other experts who frequent edbrill.com.

    My point was this... applications have a cost of ownership. In the past I've kicked people under the table when they make sweeping statements like "you get Notes / Domino e-mail, and then the applications are free". From a license cost maybe, but that's only a fraction of TCO.

    E-mail too has a cost of ownership, which in the case of Domino you have to add to the cost of ownership of applications. When you calculate TCO there will be advantages provided by the overlap of being on the same platform, even though e-mail creates a unique set of challenges compared to applications.

    If, as the Forbes quote suggests, you use Domino for applications and Exchange Online for e-mail, that overlapping advantage disappears. Yes, some of the IT pain and cost is taken out of managing e-mail, but not all of it. And then Notes applications are standing apart from mail and incurring the full weight of the Domino TCO. And that was my thought process - that now adding the two TCOs together I would have thought would be more than the original Domino combined TCO.

  1. 15  Henning Heinz  | 12/24/2008 6:19:05 AM

    I've hardly ever met a customer that said he wants to go with Exchange just because it is cheaper. But sure every customer that moves away from Domino does not know anything about IT and TCO. Oh, and let's not forget that "The Windows Server 2003 crashes all the time. It needs to be rebooted just about weekly and scanned for malware constantly." (Quoted source on { Link })

    With such cheap shots you are not going to impress any customer in 2008 either. What is dangerous about Exchange Online is that its pricing is lower than many inhouse implementations, either be it Exchange or Domino. Combine that with a MS sponsored fixed migration fee and you have a challenge. If we really talk about TCO then why not talk about xPages that require you to redevelop most if not all of your custom applications, that your applications officially stop to work both in the browser and the client and that it requires additional training for many Domino developers. Or that the Eclipse client is a challenge for companies that use Terminal Server or Citrix? Ok, I don't think it makes much sense to use Notes with Citrix or Terminal server anyway but should I really argue with a customer about this?

    What should I tell customers that still use Domino.Doc? Every doc customer is a potential Sharepoint candidate, at least Microsoft has a message to sell. And IBM's anti Microsoft message is a challenge for many companies that are not ready yet to move away from Microsoft. Again not a fault by itself but no one should think that the MS IT guys will just resign. The iPhone alone has caused me many headaches in 2008 and I got another few grey hairs.

    Lotus Notes and Domino have its challenges and by just saying those do not exist you are at risk that Microsoft will answer them for you.

  1. 16  Henning Heinz  | 12/24/2008 8:04:35 AM

    Well, at the end it is just IT. My 2008 year with Lotus was a lot of stress but not bad. Merry Christmas to you and all the Lotus believers (and non-believers) out there.

  1. 17  Nathan T. Freeman http://nathan.lotus911.com | 12/24/2008 9:00:45 AM

    @14 - I don't think I made my point entirely clear. In a platform migration scenario, the target platform always has a lower TCO than the starting platform. Not because of the merits of either platform, but because of the implementation.

    Let's take a typical scenario: The Very Big Corporation of America has a Domino messaging infrastructure that they implemented in 1998. It's now 2008. For the last 10 years, they've upgraded spottily, and now they have most of their users and servers on 7.0.3, with a few Domino 8 servers in the mix. They have 10 years worth of mail sitting in 100,000 NSFs on an iSeries cluster. Total mail storage is around 50 TB.

    If that customer migrates to Exchange Online, they're not going to port 50 TB of data to the new system. They're not even going to try. But they're going to get a huge TCO savings, because they've essentially pressed the DELETE key on 50 TB of data. They could be migrating to Groupwise or Office Vision and they're going to get better TCO. It's the exact situation that Keil is describing in comment 8.

    I'm sure you're thinking "well, there's all kinds of improvements they could make to their Domino environment to improve their TCO without having to migrate" and I'd be the first to agree with you. But that doesn't matter if the customer is unaware of it. Why would an IBM customer be unaware of the TCO savings they could get with a proper implementation? Should we even try to count the ways this typically happens?

    I'm not trying to be argumentative here. It's just that I've heard you (and Ed) say you've never heard a customer offer real ROI for a migration. But the customer *does* think there's an ROI. The ROI comes from the purging of the old environment. An IT manager will pitch the migration as necessary to get to the clean environment in the first place, and even with a multi-million dollar price tag for a migration, the net return is still positive over a few years simply because they're no longer maintaining all the content from the old system -- and that saves a huge amount of money.

  1. 18  Darren http://www.dadams.co.uk | 12/24/2008 9:29:41 AM

    @17 - okay, I can see where you're coming from, point taken.

    I can't mention the customer name but this reminds me of a 'win' I led a couple of weeks ago (along with the IBM client executive who has to take some of the credit).

    The customer had a very cheap quote for hosted e-mail from a competitor, so we decided to focus on two offerings from ourselves. #1 was hosted Notes and #2 was keeping it in-house with a big tidy-up operation. To satisfy #2 we had to focus on the aspects of their infrastructure, and the relevant capabilities of the current product releases, that they would take advantage of to reduce their costs. That approach worked.

    The lesson here is obvious - if we get to a customer and have the right conversations at the right time, migration is less likely, we can help them realise TCO reductions and improve the infrastructure.

  1. 19  Ed Brill http://www.edbrill.com | 12/24/2008 9:38:51 AM

    @18 this has become our standard playbook the last few weeks, hasn't it? That was my original point in this blog entry, and I am glad to see that the "cheap quote for hosted e-mail from a competitor" has actually given us the opportunity to engage in new conversations with our customers about their best approach moving forward. "Messaging economics" trumps loss leaders -- also a point that Gartner makes in the report I linked yesterday.

  1. 20  Nathan T. Freeman http://nathan.lotus911.com | 12/24/2008 11:02:52 AM

    @19 - It has, and that's good. I'm trying to encourage you to find ways (as we are trying to do as well) to have that proposal happen sooner than when the customer is looking at migration proposals. Drawing a customer's attention to when they're costing themselves money can't happen early or often enough. :-)