IDC: Domino Effect: Lotus Drives IBM´s Strong Software Performance in 2Q05

August 1 2005

IDC takes a look at the IBM software business in a new report published on Friday.  The abstract:

IBM's second-quarter earnings announcement on July 18, 2005, underscored renewed strength in its software business, particularly from products in its Lotus division. This IDC Insight examines the earnings announcement and analyzes the likely impact on various Lotus software products and the markets they serve.
The report goes into how Lotus's business has turned around:
After initially confusing customers about the relationship between Domino/Notes and IBM Workplace, during the past year IBM has succeeded at clarifying the relationship between the two, resulting in double-digit growth for each of Lotus' last three quarters.  ...

IBM's 2Q05 performance gives credence to its contention that it is bullish about "gaining market share in the collaborative software ...category," according to CEO Palmisano, and helps build a foundation for success in subsequent quarters. Further, its insistence on following a unique path that leads to a portal-oriented workplace is finally bearing fruit among its customers.
I don't think you can get any stronger of an endorsement that Lotus's strategy is working in the marketplace.  IDC is one of the firms that tracks market share... and they are seeing indications of success.  I especially like the wording "has succeeded" -- past tense, it's done, IBM's on offense, moving forward.  Are there still areas to solidify and clean up?  Yes, of course.  But smart people are working on those.  I was on a call early this morning about Sametime and QuickPlace futures, for example.  IBM understands what the market is looking for.  Everything is moving forward, the momentum is there.

In contrast, there's this press release this morning predicting a decline in Lotus market share.  With, as IDC notes, three quarters of double-digit growth for Lotus Notes/Domino, it's important to consider the basis for a report that indicates declining revenues for 2005 and beyond.  The discrepancy between what both IDC and IBM's CFO says and what this press release says should be enough to put it in its proper place.  By the way, if you want to know the details behind said press release, I suspect this report on Microsoft's website (as opposed to the analyst's own site), which has market share data on page 18, covers it.  There's a contrast there, too, between what Microsoft says and what the report says.

The IDC report will be available on ibm.com soon.  Paying IDC subscribers can access it now.  
Link: IDC: Domino Effect: Lotus Drives IBM's Strong Software Performance in 2Q05 >

Ed Brill Highland Park, IL USA Category:  Lotus  Add/View Comments [15]

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  1. 1  Carl Tyler http://www.iminstant.com | 8/1/2005 9:39:48 AM

    Great job!!

    Imagine how great it would have been without the confusion created by folks like Steve Mills in the past.

    Oh to take a look in the parallel universe to see how it's going over there...

  1. 2  Duffbert http://www.twduff.com | 8/1/2005 10:23:26 AM

    Nice entry, Ed... Thanks!

  1. 3  Tim Latta  | 8/1/2005 10:24:39 AM

    " I was on a call early this morning about Sametime and QuickPlace futures, for example. IBM understands what the market is looking for."

    I've seen the futures of Sametime (and they look better), but haven't seen them for QuickPlace yet.

  1. 4  Ed Brill www.edbrill.com | 8/1/2005 10:34:47 AM

    @3 - Patience, my child... I could cover some of it with you under your IBM NDA now though

  1. 5  Simon Barratt http://apps.fmc.com/blog.nsf | 8/1/2005 11:11:54 AM

    Strong story!

    I think everyone (well at least me!) is waiting for a story about QP and Sametime though!

  1. 6  Chris Whisonant http://cwhisonant.blogspot.com | 8/1/2005 1:10:20 PM

    Thanks Ed! Sup with the Radicati report? Good grief...

    @5 - definitely. I think ST 7.0 would be a good place to start but I don't think they are making any major improvements from what I saw.

  1. 7  Eric Parsons startingblockcomputing.com | 8/1/2005 1:22:42 PM

    "There's a contrast there, too, between what Microsoft says and what the report says. "

    Are you sure? Seems that Microsoft marketing would *never* misquote or otherwise inflate any claims. :-)

  1. 8  Brian Benz http://www.softwaresoapbox.com | 8/1/2005 3:07:00 PM

    Great! Maybe we can avoid that downturn in sales and keep the momentum going with a really good Lotus ad campaign!

  1. 9  Henning Heinz  | 8/1/2005 3:31:25 PM

    As for the "press release" I am quite surprised that IBM has not yet started to sue this company. I think there are other companies around that sue IBM for less reasons (the company that still searches for their source code comes to my mind).

  1. 10  Randall Shimizu  | 8/1/2005 4:13:29 PM

    The Lotus marketing message seems fairly clear overall.

    I would still contend however that Lotus needs to focus more on refining the Workplace message for the individual products.

    The delivery of the marketing needs to improve as well.

  1. 11  Andrew Price www.healthspace.com | 8/1/2005 5:32:10 PM

    Great work Ed, Alan, and Dr Goyal -- plus all the others we don't hear about as much!

    This kind of news is really, really helpful when talking to skeptics and is dispelling FUD.

    :)

  1. 12  Bill  | 8/3/2005 9:46:52 AM

    Did anyone else notice the part in the Radicati spew "In some cases, a corporate user may have more than one active e-mail mailbox. For example, a user may have a general corporate e-mail mailbox, a mailbox for a specific group or department, and a mailbox for personal use."

    Does anyone use multiple mailboxes in Domino? I know that we use mail-in dbs for the first to examples in their report.

    "Statistics are for liars" -- unknown

  1. 13  Steven  | 8/9/2005 12:55:22 PM

    Ed: I'll have to wait for the IBM posting. Our Passport & LSM contracts give us a lot of great stuff (we love our LSM), but $1200.00 for a 4 page report is not one of them. Please make sure to post the link once it is available on IBM.COM

    @12 We use MIDBs for all listed uses except personal. We also use them for Voice Mail and group C&S and some conf. rooms (R&R is not so hot). 30% of our Domoino Directory entires are of these types.

  1. 14  Ed Brill http://www.edbrill.com | 8/9/2005 1:05:51 PM

    it is now posted on ibm.com. I posted a new blog entry that said so, just about five minutes before your comment ;)

    ftp://ftp.lotus.com/pub/lotusweb/33813.pdf

  1. 15  david racicot  | 8/9/2005 1:25:06 PM

    Do we have any numbers coming out of Gartner recently?