Lotusphere week: Spoilers and counter-spoilers

January 15 2009

As anyone in the Lotus community knows, the week before Lotusphere is often one of a bit of market tactics.  We start to talk about what we're going to talk about Lotusphere...Microsoft tries to steal the show.

The game is being played a little differently this week.  In fact, with all the fun of trying to guess what Microsoft's spoiler would be, it seems we missed this year's attempt.  On Tuesday, Microsoft started talking about Exchange "14".  The main message -- "ha ha, all those Live@EDU users have actually been using an alpha of the next Exchange!"  The secondary message -- "it's taking us years to build a new version of Exchange that actually works" (the boast of "years" appears in both links).  Phillip Story calls it:

Microsoft's spoiler is that they've shipped some alpha software for the Office 14 suite to "select customers".

Part of me hopes that this isn't all they have as a spoiler.  Because if it is, it's... well...Lame.

So lame I can't even bring myself to make the obvious "how can anyone tell it's an alpha?" style jokes.
Meanwhile, about 30 minutes ago, IBM Lotus issued a "momentum" press release that comes out swinging:
In advance of its annual Lotusphere conference in Orlando, Florida next week, IBM today announced that the number of global Lotus Notes licenses has reached 145 million, up five million, including purchases by many industry leaders exchanging Microsoft licenses for Lotus collaboration software.

Over the past 15 months ending in the third quarter of 2008, more than 12,000 new organizations bought their first Notes/Domino licenses, and more than half of the Fortune global 100 now use Lotus Notes and Domino. ...

A number of customers that Microsoft had previously announced would migrate to Exchange are now stalling or abandoning those plans. These organizations recognize the higher cost of potential migration to the competing product and the benefits of deploying Notes/Domino 8 through 8.5 versions. In some cases, the cost of upgrading Notes/Domino has shown to be 20 percent or less of what companies were projecting for migration costs to Exchange.  ...

In recent engagements, IBM has been helping customers improve their messaging economics through enhancements in performance and scalability, "green" initiatives, and the optional ability for IBM to provide off-premise solutions through software as a service (SaaS) and cloud services. In one recent customer engagement, IBM's assessment of existing messaging economics is helping reduce a company's operational costs by 23 percent over 12 months. The customer projects an additional $27 million in savings with the use of Lotus Symphony instead of Microsoft Office.
In reading the release, you might flash back to the July 31, 2008 announcement, similar in tone and tenor.  There's a lot of names, named, again, including a few that will be formally announced on Monday at Lotusphere.

There's a very distinct impression created by the contrast in these two approaches....one of plodding ahead quietly and one of winning in the market.  Are we getting to that noise level you've been asking for?

Link: Global Businesses Choosing Lotus Software; More Than Half of Fortune Global 100 Now Using Lotus Notes / Domino >
Also picked up in Computerworld (thanks, Duffbert)

Ed Brill | Highland Park, IL USA Category:  Lotus  Add/View Comments [35]

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  1. 1  Handly Cameron http://handly.blogspot.com | 1/15/2009 7:52:03 AM

    A good counter-spoiler:

    Once we lock in exactly what the spoiler is, all of the Lotus bloggers should write posts with titles using the specific product names from the spoiler.

    For example: "Microsoft Releases a lame Office 14"

    In the body we can explain how lame of a story this is (and link back here!). This will help Google and other search engines to decide that the true story is that the spoiler is lame and put our stories at the top of searches.

  1. 2  Darren http://www.dadams.co.uk | 1/15/2009 8:15:05 AM

    I think I'm going to say in essence what Phillip Story said... Lotus have just shipped a new version with loads of new stuff (including a focus on reducing the cost of ownership) and Microsoft's spoiler is that they have alpha software of a new version that will be released sometime in the future, can't say when.

    That's so lame I'm actually prepared to believe it's not a spoiler, it's just a coincidence. I mean, if I was wondering whether to continue investing in Notes / Domino, the fact that Microsoft are working on a new version isn't exactly going to make me say "wow". I'd be more interested in Outlook than Exchange to be honest, to see whether it's just more of the same (i.e. e-mail, calendar, etc) or whether they're trying to make it evolve into something more fitting the varied methods of collaboration we're seeing today (hey, like Notes).

    Naturally, I have asked the Exchange team blog "So is this new version based on SQL Server? Will it be a straight upgrade from Exchange 2003 or 2007?" and await the answer...

  1. 3  Nathan T. Freeman http://nathan.lotus911.com | 1/15/2009 10:16:53 AM

    "Over the past 15 months ending in the third quarter of 2008, more than 12,000 new organizations bought their first Notes/Domino licenses..."

    Okay, I'm all for aggressive PR, but I am HIGHLY skeptical of that number. The entire N/D customer base was put at around 42,000 companies around 18 months ago. Is IBM really claiming that since 8 was released, it's increased it's corporate penetration by almost 30%?

    Kudos if it's true, but I'm reminded of the revenue projection charts of dot-coms around 1998.

    By the way, 5 million new seats across 12,000 organization = about 415 users/org. That's a surprisingly small customer size, especially considering that the 5mil is skewed by a few exceedingly large organizations.

  1. 4  Kerr  | 1/15/2009 10:49:47 AM

    @3, Who said all of the 5 million new licences where from new customers?

  1. 5  Kerr  | 1/15/2009 10:55:05 AM

    Were. Were from new customers. Doh!!

    Of course that just highlights the point.

  1. 6  Bill eDorge  | 1/15/2009 10:58:20 AM

    @3 Being involved in a couple of those conversions over the late year or so, the customers I've dealt with have been the 100 to 250 user size. I know they aren't the large ones we like to see, but still exciting to know that the Lotus message is starting to take in the SMB market.

  1. 7  Mike  | 1/15/2009 11:02:38 AM

    When is IBM going to compete with the Google, forget Microsoft, that’s the old game.

  1. 8  Nathan T. Freeman http://nathan.lotus911.com | 1/15/2009 11:25:08 AM

    @4 - An excellent question. Do you think that IBM grew the licenses issues in their existing customer base by 5 million? Whatever percentage of that 5 million was in existing customers, that skews the number per new customer (the 12,000) even smaller. So did the last 18 month see a bunch of 300-person shops implement Notes/Domino? 200-person? 50-person?

    This would tend to imply that Foundations FLEW off the shelves, wouldn't it? It's not like IBM reps are out there pitching to 100-person companies en masse.

  1. 9  Philip Storry http://www.not-so-rapid.com | 1/15/2009 11:33:05 AM

    Ed,

    I must admit that as I wrote that, I was wondering why nobody else had commented on it. I figured that either nobody had noticed it, or nobody had cared about it.

    Either way, as Paul Robichaux had called it the spoiler, I figured I should stick my oar in! ;-)

    Good response with the momentum press release. Getting back to figures is good, by the way - people like figures. Kudos to IBM for gett8ing back to that. Even if the figures are challenged, it gives us opportunity to discuss how they're measured by all sides. *grins*

    @2 Darren - Coincidence? Well, Paul Robichaux called it the spoiler first. This may not be all they have, and I hope not (as I said). But I suspect it's the start of any spoiling campaign, as announcing a limited alpha test release is a bit unusual...

    Re your queries on upgrading Exchange servers - well, even if you can do an in-place upgrade on your Exchange 2007 machines, the architecture difference (64-bit because their DB is crap, remember?) means that I doubt you'd be able to do an upgrade from 2003. That'd be a migration, as per usual.

    Exchange's architecture is its own worst enemy.

  1. 10  Keith Brooks http://www.vanessabrooks.com | 1/15/2009 11:59:20 AM

    And here I was thinking Microsoft was too busy hammering Apple on their "tax" or Google's attempts at stealing Microsoft's business model (offer enough of it for free to entice them) to worry about Lotus.

  1. 11  Jack Dausman http://www.leadershipbynumbers.com | 1/15/2009 12:08:14 PM

    Well, I did read about Exchange 14, and it was so off the radar, that I didn't even think of it as significant. From Exchange 4/5/5.5, Exchange 2000, Exchange 2007, to Exchange 14 ? And, the quote of 3.5 million student users on it ? I guess I thought of Microsoft's effort as aimed at Google Mail. The anti-spoilers floating around were light-hearted, but I agree that everyone was expecting something more dramatic from Redmond.

  1. 12  Charles Robinson http://www.cubert.net | 1/15/2009 12:17:56 PM

    @8 - I know that IBM has been auditing customers aggressively for license compliance. A friend at a non-profit 1000 user company was nailed for about 350 new licenses. Someone else I know at a 200 user company was hit for nearly 300 licenses as well. Both were because they didn't know that every authenticated web user needed a Notes client license. I'm sure there are many more cases like that, but we'll never know how many of the new licenses were from compliance audits.

  1. 13  Ed Brill http://www.edbrill.com | 1/15/2009 12:24:42 PM

    Charles, the new licenses and new customer numbers are not correlated (they don't even cover the same time period).

  1. 14  Ian Scott  | 1/15/2009 12:29:17 PM

    @11 - Funny.

    I've been wondering how we got from Windows 3 through NT4, Windows 95, Windows 98, Windows 2000, Windows 2003, Windows XP and Windows Vista only for the next version to be Windows 7 and here we go from Exchange 4 through Exchange 5, Exchange 5.5, Exchange 2000, Exchange 2003 and Exchange 2007 to Exchange 14.

    Maybe Microsoft calculate it via 65535 in a buggy version of Excel.

  1. 15  Charles Robinson http://www.cubert.net | 1/15/2009 12:35:47 PM

    @13 - I'm a little confused since I was just talking about new licenses and not new customers, but thanks for making that distinction. :-)

  1. 16  Henry Ferlauto http://www.geniusinside.com | 1/15/2009 1:04:23 PM

    The difference between Microsoft alpha and gold software?

    That's easy....

    The invoice! :)

  1. 17  Henry Ferlauto http://www.geniusinside.com | 1/15/2009 1:11:04 PM

    As an IBM Lotus ISV, this is the most welcome line in the IBM press release...

    "Over the past 15 months ending in the third quarter of 2008, more than 12,000 new organizations bought their first Notes/Domino licenses..."

    Shameless plug to those 12,000 organizations and everyone else: Please come see our newest release of Project4Domino (Version 6) at booths 525 & 526!

    Ed - Are there "I'm Ed Brill" t-shirts included in this year's backpack? :)

  1. 18  Ed Brill http://www.edbrill.com | 1/15/2009 1:27:08 PM

    By the way Charles, as to your much-more-negative comments on Computerworld, we actually have announced specific financials for Notes, in the July 08 press release. We said that Notes-specific software revenue has grown each of the last (then) 15 quarters. The cumulative growth is quite significant for Notes/Domino specifically over the last four years.

  1. 19  Darren http://www.dadams.co.uk | 1/15/2009 2:10:48 PM

    @16 - I don't think I could say that one in a presentation... shame, that's very funny.

  1. 20  Charles Robinson http://www.cubert.net | 1/15/2009 2:17:34 PM

    @18 - I can't find a July 2008 press release with specific financials. I did find { Link } and { Link } but neither list Notes and Domino numbers specifically. If there is another press release with this information I'd be very interested in reading it. :-)

  1. 21  Ed Brill http://www.edbrill.com | 1/15/2009 2:26:53 PM

    We never disclose specific financials for a product, IBM-wide. In the July release we said "With 15 consecutive quarters of revenue growth, IBM's flagship Lotus Notes and Domino products has been transformed into a versatile tool ... " If I could, I would, because there's a good story here.

  1. 22  Charles Robinson http://www.cubert.net | 1/15/2009 2:54:48 PM

    @21 - So basically you're saying "trust me." You're a great guy who I respect a lot (even if it doesn't always show), but that isn't good enough for me. As long as IBM makes these statements with no hard evidence I'm going to call it out as opaque and unverifiable.

    Incidentally, what was the timeframe for the 5 million licenses? IBM's January 2008 press release cited 135 million licenses but in both July and October 2008 it was 140 million. Would it be correct to extrapolate that mean IBM sold 5 million Notes and Domino licenses in the last quarter of 2008, to reach 10 million for the year? I can't believe that is the case, though, or you'd certainly be crowing about a nearly 40% increase in average annualized license sales.

  1. 23  Ed Brill http://www.edbrill.com | 1/15/2009 4:14:25 PM

    And how would life be better if you had a verifiable data set for this? I mean, I could go advocate for IBM to make a special disclosure, as unlikely as it is, but I am not sure why it matters. We run a large, profitable, growing, and long-term business. That's what matters to customers.

    I suspect the Jan 08 release was written before Q4 07 earnings, so it was carrying a 2007 number. 5 million is the rough 2008 new license number.

  1. 24  Darren http://www.dadams.co.uk | 1/15/2009 4:26:03 PM

    @14 - I wondered about the version number '14' for Exchange. But look at it this way... Exchange 2007 was originally dubbed Exchange '12'. So what would come next? I think Exchange customers already feel nervous enough about the next 'upgrade' without the version number being 13.

  1. 25  John Head http://www.johndavidhead.com | 1/15/2009 5:24:33 PM

    @24 Darren, MS is skipping 13 across every product .. office, the servers, etc. It is not unheard of for a vendor to skip the #13 just like hotels do sometimes. With everything IBM and Lotus has going for it, leave the #13 out of it. Not nessecary.

  1. 26  Darren http://www.dadams.co.uk | 1/15/2009 5:29:26 PM

    I guess it remains to see how confident we'll feel about it in 5 versions time ;o)

  1. 27  Ben Poole http://benpoole.com | 1/15/2009 5:55:24 PM

    "leave the #13 out of it. Not nessecary [sic]"

    Hmph, I thought that was a kind of fun post. Not triskaidekaphobic are you John?

  1. 28  john head http://www.johndavidhead.com | 1/15/2009 6:15:04 PM

    @27 nah Ben, numbers don't bother me ... just think harping on numbers when there is so much good stuff that nitpicking on the version number just seems kinda pointless.

  1. 29  Henry Ferlauto http://www.geniusinside.com | 1/15/2009 7:14:29 PM

    @19 - So don't say a thing... That's why they invented screen-capture tools. :)

  1. 30  Dave Harris http://www.wavysworld.com | 1/15/2009 11:36:12 PM

    @24, 25, etc

    In Malaysia, many places (hotels, apartment blocks) skip both thirteen and fourteen - thirteen for the westerners, and fourteen for the chinese. It has very unpleasant connotations for the chinese.

    I live on floor 12B.

  1. 31  Julian Woodward http://blog.woowar.com | 1/16/2009 12:34:53 AM

    I have a dentist appointment on Friday 13th February - should I be worried? ;-)

    Interesting numerological side-discussion notwithstanding, it does seem that the symbolic aggression of the yellow boxing gloves (Lotusphere 2006) is starting to bear fruit now.

    We can discuss the ins and outs of the stats all we like - I too am a "detail person" so would like to know how they're derived. But the bigger story is that these press releases are happening at all. That's twice in the space of six months IBM has come out punching. Even better, these press releases are being covered (or at least reproduced) elsewhere. Okay, not front page news - why should it be - but try googling for this story ('lotus "145 million" 2009' should do it) and see how many hits you get.

    No hit on the BBC of course, who are notoriously reluctant to publish anything about Lotus Notes { Link }

    (Cue Darren for a rantlet!)

    I love this paragraph from the press release too:

    "Other popular capabilities driving client interest include social computing features such as integration with the Lotus Connections enterprise social networking technology -- for which Microsoft has no alternative -- and the personal and business calendar matching of the newest Notes release, 8.5. In addition, younger, more Web-oriented professionals are adopting Notes for its connectivity with the Apple Macintosh; appealing interface that integrates key work tools on one screen; and Web 2.0 features, including composite applications, widgets and fully integrated unified communications."

    [a] "for which Microsoft has no alternative" - specific Microsoft-bashing - go for it.

    "In addition, younger, more Web-oriented professionals are adopting Notes for its connectivity with the Apple Macintosh" - wow, I have a MacBookPro - does that make me 'younger'? ;-)

  1. 32  Julian Woodward http://blog.woowar.com | 1/16/2009 12:37:21 AM

    Oh damn, didn't realise the blog supported [ ] type mark-up. That final bold bit is, of course, point 'b'

    :-)

  1. 33  Julian Woodward http://blog.woowar.com | 1/16/2009 12:38:47 AM

    better?

  1. 34  Charles Robinson http://www.cubert.net | 1/16/2009 1:03:58 AM

    @23 - My life is not affected either way. Like most business matters, it's not that important. I have an academic interest in it, nothing more. You can't share the data so I remain a skeptic. And there is our impasse. :-)

  1. 35  Ian Scott  | 1/16/2009 1:50:20 AM

    @24 - the second definition here { Link } can only apply to the past. Plenty to be nervous about.

    @28 - There is a lot of good stuff to concentrate on but I don't see it as nitpicking. More a case of covering all the bases and having a bit of fun :-D

    Skipping #13 due to superstition doesn't strike me as particularly scientific but I should be careful in case it happens to Notes too!

    So I look for logical explanations like maybe Exchange 13 was slated to have active/active clustering (again) but it didn't work (again).

    You see, I wouldn't put it past Microsoft to claim or infer that Exchange 14 represents a roadmap from Exchange 12 :-)