Three weeks ago, IBM Lotus announced Lotus Notes Hosted Messaging, a Passport Advantage fixed price offering where IBM hosts e-mail boxes for customers on a pay-as-you-go basis.  I've spent a ton of time in calls and conversations about this announcement ever since, and with more on this week's calendar, I'm thinking about why.

To recap, the offering comes in four flavors -- regular (99.5%) and high (99.9%) availability, and with or without the Lotus Notes Messaging license.  The price ranges from US$8 to US$14 per user per month.  This is the cost of, among other things, IBM providing the service, the hardware the server runs on, the administration of that server, the data center space and monitoring, backup and recovery,   Future plans include addition of iNotes, Blackberry, and Sametime instant messaging services.  Lotus Notes Hosted Messaging is one component of the Lotus brand's strategy to provide service-based offerings; others include Sametime Unyte and "Bluehouse".  This is still a relatively nascent strategy...while IBM has been in the data center and hosting business longer than all our competitors combined, the move to a fixed-price standardized approach is one of the aspects that makes the new offering so interesting.

The customer inquires and conversations on this have been diverse.  Some customers are looking for the "silver bullet" that will solve their operational cost issues with running an e-mail system.  Others are looking for hosting of applications, something that IBM does offer but not through the standardized approach.  Some know that SaaS/cloud/hosting are the buzzwords of the moment, so they're looking at it because they feel like they should.  A few have come to us because our competitors are suddenly running scared, pushing their hosting approaches with an "ours is better than IBM's!" sky-is-falling mindset that is surprising given how careful IT should be about decision-making in a time of cost-cutting.

It is that "silver bullet" group that continues to surprise me.  We did not announce Lotus Notes Hosted Messaging to be the bargain-basement hosted e-mail provider.  For what it's worth, Microsoft's Exchange Online isn't, either -- their cost calculator, which is clearly a theoretical model, has the typical cost in the $8-10/user/month range as well, whereas their partners like 1&1 charge less (as, I believe, do some of ours, though it's hard to tell through the grumbling that a few of them have engaged in).  Regardless, the response I've had from some customers is, "we think our internal costs are lower than what you are charging".  That may well be!  Consider Lotus Notes Hosted Messaging when you are looking for a predictable cost model, the expertise of IBM, the removal of concern around server upgrades (HW/SW) and maintenance, an approach for multiple sites or locations, and a single-vendor solution.  As more services are added to the Lotus Notes Hosted model, it may well be that the economies-of-scale change, and the offering may appeal to additional customers.  But like most things in the IBM world, we did not create this offering under the belief that it is the best or only approach -- IBM offers a range of solutions.  In fact, Lotus Notes Hosted Messaging is not our only way to approach the problem...IBM Global Services can do a broader custom proposal (still at a fixed cost) or there's the complete strategic outsourcing model that has existed for ten or more years.

What the introduction of Lotus Notes Hosted Messaging may really mean for customers is that it is a catalyst to look at your operational costs.  Too many organizations don't know what the operation of your e-mail/collaboration systems costs, and those that do may have ways to optimize.  One of the things my team is looking at is a set of tools to help you with operational streamlining of your Notes/Domino environment.  The Lotus brand services team is especially good at "health check" and TCO optimization exercises, and there are so many tools that have been introduced in Notes/Domino 7, 8.x, and coming in 8.5 to help.  When I first started looking at Notes/Domino TCO ten years ago, we saw costs that were 5-10x what they seem to be today.  Whether you look at a hosted or on-premise deployment, the opportunities exist -- and moreso with the release of Domino 8.5 -- to streamline.  

Your suggestions or experience on what you did that helped with your operational costs would be appreciated as this topic is the subject of much energy at the moment.  Thanks!

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