Lotus Notes Hosted messaging announced today (take 2)

October 22 2008

Among this morning's IBM channel announcements is the new Lotus Notes Hosted Messaging offering.  As was previewed last month by Bob Picciano, this new offering offers IBM customers the flexibility of deploying Lotus Notes/Domino on premise or in a cloud model, hosted by IBM.  Some of the key data points in the channel communication:

  • IBM is offering both existing and new customers the option of deploying Notes against Domino servers hosted and managed by IBM.
  • The pay-as-you-go model offers a fixed per-user per-month price for Domino hosted mailboxes, and is purchased through Passport Advantage.
  • Two service levels are available (99.5% availability and 99.9% availability), along with one mailbox size (1 GB).  50 MB of Quickr Entry storage is also included per-user.
  • Customers can either use existing Notes client licenses with the hosted offering or buy an all-in-one Passport Advantage part that includes both the Notes for Messaging license as well as 12 months mailbox service.
While that's what is being communicated today, there are plans for more to come in this space.

I'm sure there are a zillion questions on this.  Many are answered in the channel announcement and more will be answered on ibm.com (the Notes/Domino hosted licensing page goes live later this week).  And I'm sure we'll have some interesting discussion on this topic in coming days.  The new Hosted Messaging offering is available as of today in Passport Advantage in 15 languages, with the remainder coming in about a month.

This is also a good opportunity to remind you that IBM's hosting approach is not the only one out there, and won't be right for every customer.  The Lotus Notes Hosted Messaging offering has a minimum quantity of 1000 users (though this will likely go lower in the near term)... other vendors like Connectria, Prominic, coreFusion, Internoded, Navisite, and many others provide Domino hosting options as well.

I will update this post in the morning with a link to the press release.  There has already been press coverage in PC World, eWeek, and CRN, with a lot more coming on Wednesday (along with another announcement).  Update: Information Week also has the story, with my first press interview since moving into this role..

Link: ibm.com channel announcements: Lotus Notes Hosted Messaging >
Link: ibm.com press release: IBM Extends IBM Lotus Notes Software to New Markets With On-Line Hosted Service >

Ed Brill Highland Park, IL USA Category:  Notes and Domino 8  Add/View Comments [40]

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  1. 1  Mike Sweeney http://Ameriprise.com | 10/21/2008 8:37:06 PM

    With all the cloud solutions coming to market or in the market place. Good to see Lotus stepping up to bat and offering a solution.

  1. 2  Bob Balaban http://www.bobzblog.com | 10/21/2008 8:50:26 PM

    Gotta say, I don't understand the rationale of marketing a hosted messaging offering completely separate from Bluehouse. Doesn't this just raise questions? Would love to hear the explanation!

  1. 3  Ed Brill http://www.edbrill.com | 10/21/2008 9:06:39 PM

    @2 Bob, as you know in your business, sometimes customers just want mail. There's a segment of their users, or a new acquisition, or a distributed location where they just need to provide mail. That's the market demand for this offering.

    "Bluehouse" isn't "available" yet (it's in beta, as you know) and is focused on the market demand for extranet collaboration.

    I can very logically see the two becoming more closely aligned in the common set of offerings (along with Sametime Unyte). But I don't see a downside in offering mail by itself.

  1. 4  Tripp Black http://www.mindwatering.com | 10/21/2008 9:23:39 PM

    Hi Ed,

    This is another great option that rounds out a great set of offerings. What I think would help Bob, would be a matrix/chart of when you want one service offering versus another. For us we are a straight Lotus Domino shop - we like having the power (and the occasional) headache of pushing the technology on our own hardware whereever we want how we want. To me this is the opposite offering, this is great offering for the small business of 10-25 users that has outpaced their standard web hosting and e-mail ISP and need to scale beyond e-mail and static HTML without having to create an IT department. To me, there is another exiting offering, - Lotus Foundations. So far I love the Lotus Foundations (I'm just getting my hands dirty on it now.) Having just setup a MS 2003 SMS for a client, I'm really looking forward to experiencing Lotus Foundations - I will have done one back-to-back "against" each other. In my opinion this is IBM Lotus' direct competition to MS SBS. It's for the shop that want's their first or second box that can be set up w/o a large cost that has all the swiss pocket knives bundled together. As for Bluehouse, to me it's more a hosted version of Quickr with a good re-interpret to the online community where Facebook meets Enterprise level collaboration. Once again, from my perspective, IBM once again is going to have to market this in a way that reaches the end users and end business owners in a way that isn't shall we say as agressive as MS' marketing engine but still is able to meet head on in the honorable way that IBM (via Ed Brill) has taken. This overdog/underdog approach makes me proud each time I meet an MS shop IT guy who wonders why IBM "still even tries". Why am I there - usually its to spend a couple hours to move a Lotus Domino server that does a specific app that is core. They've been there for days chewing up the customer's cash and I'm there in two hours Installing the same version of Domino on the new box, and copying their Domino data folder over the new install and booting it up. These clients think that Lotus Notes is simple because of it. (Yes, that can make them think it's childsplay, but on the other hand, if they want advanced IT let them setup a Websphere or just as bad a full Groove setup.)

    That said, I would like to see this publicised along with the Express licensing offering "regular" offering, and the Lotus Foundations market. In my opinion, there is great overlap here

    :-)

  1. 5  Henry Ferlauto http://www.geniusinside.com | 10/21/2008 9:33:16 PM

    Here's the NY Times / IDG article on the topic: { Link }

    This is very good to see. I hope that IBM very quickly learns how to get this down to lower minimum quantities.

    I still say the standard is 1&1 with Exchange hosting.

  1. 6  Chris Miller http://www.IdoNotes.com | 10/21/2008 9:55:06 PM

    Interesting announcement with the requirements they give so far. I had already posted my thoughts waiting for you to republish. Thanks for pointing us out in the entry.

    { Link }

    @Bob - they are trying to match the cloud initiatives by many other vendors with this approach. However, you still need dedicated hardware (be it VM or whatever) so they have to set the higher entry point to make it worthwhile.

  1. 7  Bob Balaban http://www.bobzblog.com | 10/21/2008 11:21:05 PM

    @3 Ed - I get that there's a demand for hosted Notes, I never doubted that, and I think it's essential for IBM/Lotus to have an offering like this. What makes it confusing is when there are many different "offerings" or "programs", each with its own pricing, channel setups, support, marketing, etc.

    It's not that Hosted Notes is a "by itself" mail offering, it's that it's (logically, or in terms of mindshare) a "cloud" offering, but somehow separate from other IBM "cloud" offerings (Bluehouse appears, again from a mindshare point of view, to be the main SAAS program/product).

    Bluehose is rather obviously (to me, anyway) missing a massaging component. Hosted Notes is certainly one form of messaging component that could be very popular. Why, one wants to know, are they then separate?

    Anyway, once you've got it rolled out, we want to help you migrate people onto it!

  1. 8  Ed Brill http://www.edbrill.com | 10/22/2008 7:43:10 AM

    @7 in the first offering, Lotus Notes Hosted Messaging supports the Notes client only. That in and of itself is a reason to look at them separately. In the future, Hosted Messaging will have a browser-based mail offering as well, which will certainly provide the opportunity for more synergy across Lotus's entire SaaS/cloud approach.

  1. 9  Kevin Mort http://www.theglobalmind.com | 10/22/2008 7:55:12 AM

    This looks good. I'll be interested to see what might happen in terms of a lower minimum purchase.

    We've certainly seen a market for hosted solutions here in South Florida although most of the time it is the partner who's doing the hosting.

    Another tool in the box. That's goodness.

  1. 10  jimmy bracco http://www.lotus911.com | 10/22/2008 8:26:52 AM

    sooooooo, We all know that trying to sell Lotus Notes and Domino as a messaging only platform is the wrong way to go...yet this seems to be the opposite way of thinking.

    Lotus911 has been doing Hosting for all lotus software for the last nine years. mail and custom databases included, no limits on size (except technical) with up to 24x7x365 level 3 support, at a fraction of the price. And we have a partner reseller program also, that lets you just sit back and collect a check every month from your favorite customer.

    @Ed - surprised you left us off your list up top - but we are in a different class of hosting providers I suppose..

  1. 11  jimmy bracco http://www.lotus911.com | 10/22/2008 8:31:28 AM

    @bob - oh yeh, don't you get the feeling lately we are starting to go down the path of these multiple overlapping product lines again? This seems very surprising to me.

  1. 12  Ed Brill http://www.edbrill.com | 10/22/2008 8:54:13 AM

    @10 interesting to see the different stances on this, from a "we're better than this" to a "all boats rise when the ocean does".

    There are plenty of additional firms that do some level of hosting, I was listing some of the ones that focus in this area exclusively... no slight intended.

    There is absolutely a class of customer that wants a low-cost hosted messaging product, based on geography, user segmentation, class of service, or other factors. This is an additional approach to addressing those users. It opens up some new markets but also expands deployments in existing customers. We have a mail-only server and a mail-only Notes client and iNotes licenses...they are on the price books for a reason, and it is consistent to now offer them as a hosted service.

  1. 13  jimmy bracco http://www.lotus911.com | 10/22/2008 10:11:09 AM

    @Ed

    no offense taken..

    how do partners make money on this? or better yet how do IBM salesreps make money on this?

    also, does this fall under Sean P.'s group? Im wondering who's going to support this

    thanks!

  1. 14  Jon Schultz http://Prominic.NET | 10/22/2008 10:39:36 AM

    Ed,

    IBM is basically offering the Notes Messaging CAL at $4.50 / month (albeit purchased annually, as IBM likes to do). Is there any progress that you've heard within IBM to allow partners to purchase Messaging CALs on a monthly basis to support a hosted messaging model? This would be similar to the Microsoft SPLA model or the RIM Hosted BES model, where we would pay IBM a licensing fee simply for the number of users we have signed up that month.

    I know we can purchase and "rent" CALs now through Passport Advantage, but as you know most hosted models (especially for messaging) are executed on a monthly basis. Or more specifically at least the total number of users across all customers changes on a monthly basis.

    We've spoken to other IBMers in the past year or two who were pushing this concept internally, but it never seemed to get much traction. Has there been any progress on this that you know of, or is that road a dead end?

    Thanks,

    Jon

  1. 15  Ed Brill http://www.edbrill.com | 10/22/2008 11:27:50 AM

    @13 Lotus reps have a compensation model for this, not sure the details are relevant publicly. As for support, the back-end service, admin, and support are provided by IBM GTS.

    @14 I'm not familiar with efforts for a rental approach; our xSP team has some creative deals out there but that particular idea has not crossed my radar. I do not know who you've worked with but if you want to contact me offline I'd be happy to discuss further.

  1. 16  Bobby Castleberry  | 10/22/2008 11:37:45 AM

    It would be nice if IBM offered a hosted solution that allowed individual users the power of the notes messaging and collaboration platform (sametime, meetings, quickr) while bringing in the independent developers. The independent domino developers could build custom applications under the domino platform that users could add to their hosted stack. IBM would get a cut of that application addition and the developers would get an additional revenue stream. Maybe a system that allows for thirty day trials of an application to the stack. If you included traveler into the bundle it would be perfect.

    Just a few thoughts I've had recently. I'm leaving my Notes shop and loathe to loose access to these great tools.

  1. 17  Brett Hershberger  | 10/22/2008 1:13:41 PM

    This is good news and all, but 1000 users minimum to start? Plus it still requires the Notes client? Huh!!!

    @ first I thought this would be fantastic! Finally IBM is getting with-it, but this really looks like a half-baked idea that's not at all what it seems.

    I applaud the effort, but unfortunately it doesn't really seem to be much, except providing an off-site server for mail clients. @ 1000 minimum users and $4.50/month per CAL, don't you think small businesses will just laugh at this? It will probably be seen as a typical IBM move, only going for big companies. Those are the companies that don't actually need this solution!

    Hosted messaging server maybe, but I think hosted Webmail is the golden goose, this seems more like a lame duck.

    Sorry.

  1. 18  Ed Brill http://www.edbrill.com | 10/22/2008 1:19:34 PM

    @17 This is the first hosted messaging offering...we plan to add web-based service. I don't see what downside there is to offering hosted Notes...do you think MS doesn't promote hosted Outlook (or even Google, Zimbra, and others offering the ability to use installed clients like Outlook or POP/IMAP)?

    1000+ is the first company size supported. We would like to scale down, but there are already Express and Foundations offerings for <1000. it's not like there is some gaping hole there...IBM is hardly "only going for big companies".

  1. 19  Nathan T. Freeman http://nathan.lotus911.com | 10/22/2008 1:35:56 PM

    Where are you guys getting $4.50/month for a CAL? Are you saying that, with $8 being the low-end for the service, there's some baseline $3.50 charge that has to do with bandwidth and storage or something?

  1. 20  Dale Cybela  | 10/22/2008 1:45:16 PM

    I am happy that IBM is getting into this. But I would suggest that a matrix (hopefully not three dimensinal and not requiring the 4th time dimension) could be put together to show what products/offerings when (number of users, required functionality, etc.) should be considered.

    Dale

  1. 21  Brett Hershberger  | 10/22/2008 1:45:44 PM

    True, hosted Outlook is hosted mail-only, the Outlook client is v light though compared to the full Notes client, and can be downloaded and installed via the web or bundled with Office. Unless there is some "ultralite" version of Notes on the horizon for mail-only then it's apples and oranges again.

    You know that I REALLY love the Notes client (in a non-weird way ok...) so having a super-slick R8.x mail-only client paired to a hosted server would be a home run, this just seems more like a bunt... but a good bunt!

    I just think that when a small company reads this announcement and see's 1000 minimum user requirement, that's an immediate turn-off, it then takes proactive effort on their part to seek out another solution (ie:Foundations). With attention spans being what they are nowadays, unfortunately as awesome as Foundations is, it's in-house and may get passed over in the search for another "hosted solution".

    You know waaaay more about this than myself Ed, I'm just throwing things out as I see them from the trenches...

    From what you are saying this looks like the start of a new direction in products and services offerings, and for that I am very excited, I anxiously wait the "new guard".

    Cheers

  1. 22  Nathan T. Freeman http://nathan.lotus911.com | 10/22/2008 2:22:04 PM

    "the Outlook client is v light though compared to the full Notes client"

    HUH!??!?! Have you tried running Outlook 2007?

    { Link }

    You're right that it's more installable over the web. It's only a 291MB download from MSFT instead of a 590+MB download. Of course, it still needs 640MB just to install Outlook, and I have no idea how much additional stuff it downloads in the course of that process.

  1. 23  Nathan T. Freeman http://nathan.lotus911.com | 10/22/2008 2:27:18 PM

    Let's also note that if the trial installation encounters a problem, it leaves about 700 MB worth of files laying around on my temp drives. WHEEEEEEEE!!!

  1. 24  Ed Brill http://www.edbrill.com | 10/22/2008 3:32:09 PM

    @14/19 $4.50 is the delta per month between the SKU that includes the Notes Messaging client and the SKU that is service only. It's not just the CAL but also the use of the Notes software.

  1. 25  Brett Hershberger  | 10/22/2008 4:18:55 PM

    @23 Yowee!

  1. 26  Nathan T. Freeman http://nathan.lotus911.com | 10/22/2008 5:43:54 PM

    @24 - So the SKU that's $8/month doesn't include the Notes client license?

  1. 27  Keith Brooks http://www.vanessabrooks.com | 10/22/2008 7:08:09 PM

    I must side with Nathan on this one.

    At $4.50 or $8 or more and a 1,000 users this is uncoscionable to a company.

    For mail, 1,0000 users would be 1 server and 1 admin(yes some of you will say it's more, but not in my book, its JUST mail).

    So An Admin, at $50K-$70K a year internally(we'd all like to make more but this is an average) vs. $54K to $96K or more hosted still makes little economic sense in my mind.

    On the flip side some HR/Finance person will argue there is extra cost to the employee and hosted gets pulled from a different budget and less headcount shows better revenue per employee, etc,etc..

    But I still don't buy into it, even though I appreciate it and even proposed similar ideas to clients, the costs just don't always make sense.

  1. 28  Ed Brill http://www.edbrill.com | 10/22/2008 7:43:57 PM

    Keith, really? There's a heck of a lot of cost more to running mail than the cost of the admin. There's the server hardware, server software, server upgrades, electricity, monitoring, backup, etc.

    @26 Four ways to buy -- with the Notes client license, without the Notes client license (for those who already own one or want to buy the license outright) ..with clustering (99.9% guarantee) or without (99.5% guarantee).

  1. 29  Ed Brill http://www.edbrill.com | 10/22/2008 9:12:07 PM

    @24 - oops, the delta is actually US$3.50/user/month.... mis-read the pricing table.

  1. 30  Nathan T. Freeman http://nathan.lotus911.com | 10/22/2008 9:21:36 PM

    @27 - I'm not sure there's a side for you to be on. I'm just trying to clarify here.

    So it's $9/mn for services where you already own the Notes client license. But it's $12.50/mn for services where you DON'T own the Notes client license. So $3.50 as the margin in between. And that's the "price of the client license over a year."

    That's $42/year per user.

    Now, all else being equal, I'm pretty sure there's no way to eek a better price out of a messaging Express license. Someone with better licensing experience than me should run the math, but it certainly seems like Jon's implicit concern is valid. If IBM really is using the hosting option to undercut the pricing on licenses even as they're available to partners, then you might be pricing partners right out of business.

    The aforementioned BPs look more like a hit list in that case. Yikes.

    Here's hoping that's not the plan, and that hosting partners such as Connectria, Prominic, coreFusion, Internoded, Navisite, and many others will get access to client licensing that allows them to be competitive based on the merits of their service rather than access to the source code. ;-)

  1. 31  Keith Brooks http://www.vanessabrooks.com | 10/22/2008 9:27:17 PM

    @28 Ed, customers must provide hardware or pay for it as well. Or so I understand it, so no benefit there.

    Software pricing? They already own the licenses and still need to have the licenses to use it, so no gain there.

    Electricity? Ok, you got me, but one box doesn't use much.

    Backup? Ok, but that is expensed over the life of the server and usage and may be a corporate solution, so a small benefit perhaps in storage et al.

    Monitoring? Domino does it natively, no benefit.

    And advanced monitoring probably costs extra, like the clustering.

    At 10,000 users and 80K a month, that makes me wonder even more about it.

    I have no doubt IBM expects this to be used and taken up by some customers and price points should equal hosted Exchange.

    And if it's only email....then why not use Gmail? Get more than 1gb included.

    Just playing the other side of the fence for a minute.

  1. 32  jimmy bracco http://www.lotus911.com | 10/22/2008 10:18:25 PM

    @18 - the downside to offering hosted notes is that it is limited to the exact reason we often cant win a competitive situation with notes - its compares mail only. All of our benefits are lost for the most part if we try to pin mail to mail. We are not yet ready to take head on the likes of other mail only hosted models until we solidify our install base.

    @31 - they have to pay for hardware??? gee i better go read about this, its more interesting now.

    @Ed - so if im a hosted customer, say 1000 users, and all my peeps clients time out cuz my dink firewall admin sees that outbound 1352 traffic has gone through the roof and no one bothered to include him in...does IBM then accept say, 500 or so calls direct to troubleshoot with them? - Better have that unyte connection up and running from Armonk to Bangladesh

    besides the SLA, any info on how support takes place?

    Dont get me wrong, the idea is good, as always, but the execution is not thought out, as usual. Wish they would have asked me more of the right questions 9 months ago when they asked me about our hosting model :)

  1. 33  Scott Hooks http://www.lotus911.com | 10/22/2008 10:54:08 PM

    Here is why I think this doesn't really change anything: { Link }

  1. 34  Gary Sweeting  | 10/23/2008 5:09:33 AM

    The announcement mentions that it will use "industry-leading spam and virus protection". Can you share which one? (Lotus Protector for Mail Security?)

  1. 35  Ed Brill http://www.edbrill.com | 10/23/2008 7:50:59 AM

    @31 I have no idea what you mean about a customer having to buy hardware anyway. Server hardware? No -- the whole point of hosting is that they don't. Not sure why you would think otherwise.

    @32 Jimmy, support is provided to IT, not to the end-users.

    One of the drivers for this is a set of customers who want a single-vendor approach...a customer I met on Friday said they have looked at going hosted but are uncomfortable with the hosting being run by a third party. Other customers obviously are happy to consider the broad set of partners that offer hosting in this space.

    I'm somewhat offended that you think the execution is not thought out. IBM has been in the hosting and data center business for longer than I've been alive. This is not a 1.0 offering, but it is the first time we've been able to break the mold and provide a single, fixed price way for customers to buy the service. It will grow, expand and change over time, just as your own model for hosting has.

    @33 I am not sure what "consensus" you are representing in your blog entry, Scott. There hasn't been a single comment here that supports your first assertion around confusion in the sales cycle, and you have maybe two comments about it needing to be targeted at smaller customers. I have an inbox full of interest that says otherwise.

    @34 Lotus Protector's technology has been around for several years under the ISS Proventia brand, which was acquired by IBM. The anti-virus engine is OEM'd by other anti-virus vendors and is widely proven in the market.

  1. 36  jimmy bracco http://www.lotus911.com | 10/23/2008 9:19:05 PM

    @35 - It is never my intent to offend my colleagues at IBM...only to educate them and make money together.

    Lets revisit this topic at Lotusphere and see how it goes over the next 3 months.

  1. 37  Scott Hooks  | 10/23/2008 9:35:00 PM

    @35: You have a fair point about my sentence structure and choice of words Ed. I should have been more responsible. The "consensus" I refer to is that "this seems to be that this is generally a positive thing." The majority of comments here are indeed positive. I should have separated the next part of my sentence a bit better, and have updated the entry with a clarifying phrase. Thanks for helping me edit :-).

    My statement around possible confusion in the sales cycle is less an "assertion" and more an opinion based on comments such as @2 "I don't understand the rationale", @4 "In my opinion, there is great overlap here", @7 "What makes it confusing...", @20 "I would suggest that a matrix",and the numerous back-and-forths about how this new offering does and doesn't compare to and/or include the alternative licensing options.

    My blog entry was not not intended as an attack. I am one of the ones who is pleased to see this offering as I think it will ultimately help bring Notes mail further into the main stream.

    Am I forgiven?

  1. 38  Ed Brill http://www.edbrill.com | 10/23/2008 9:51:42 PM

    @36/37 you guys both are, especially because you are bidding on a website for a project my mom is involved in (unbeknown to either you or to me until tonight).

  1. 39  Keith Brooks http://www.vanessabrooks.com | 10/24/2008 3:55:45 PM

    @38, sorry Ed, my bad on the hardware, I was mxing up another piece I read that day.

    But in this article, they claim $8-$18.

    { Link }

    I do believe in hosted solutions, but maybe my mind hasn't gotten around to the fact that companies really will spend that kind of money on it.

    Then again, I wondered who would waste $400 on an iPhone or any phone for that matter.

    Companies. I should have known better.

  1. 40  alan lepofsky http://www.alanlepofsky.net | 10/25/2008 8:07:10 AM

    Keith, I now work for a company that provides hosted software, an I can tell you companies (and individuals, schools, etc) have no problem paying those prices monthly.