Two Lotus momentum press releases today ... boom, boom, pow

June 4 2009

IBM is issuing two press releases today, one demonstrating overall momentum for the Lotus brand, and the other specifically focused on Lotus Foundations.  Here are some of the quotes:

Driven by guidance from Microsoft to abandon evaluation of currently-shipping products, Microsoft customers are choosing IBM Lotus software, driven by the higher return on investment and easier deployment of Lotus software.  At the recent Microsoft Tech Ed conference in Los Angeles, Microsoft executives advised customers to stop testing Vista and move to testing Windows 7.   The same advice was repeated for Microsoft customers who have not yet moved to Exchange 2007; they were told to skip it and wait for 2010. ....

The economic downturn is causing companies to  consider how to spend their strained information technology (IT) budgets more carefully.  As a result, an increasing number of customers are looking at  Lotus solutions over Microsoft to not only reduce their IT spending, but to help their employes work more effectively with fewer resources.  Since the launch of Lotus Notes 8 in August 2007, IBM has seen the fastest adoption for any release in the history of Notes and Domino, more than double that of previous releases.    

This rapid market acceptance of Notes & Domino 8 is driven, in part, by the 'green' nature of the product.  Domino 8 has been proven to lower the cost of ownership for enterprises  by as much as 30 percent as a result of new 'smart' capabilities that allow companies to reduce the number of severs needed;, drive down the hardware required to support mail files and attachments; and minimize administrative overhead.     ...

"While Microsoft is telling customers they need to wait seven years for major enhancements to Exchange and Windows, Lotus continues to deliver new releases with richer capabilities on time," said Picciano.   "Clients are embracing IBM's holistic view of collaboration as a means of working smarter and more efficiently with powerful Web 2.0 and social software tools.  The net effect is our clients' employees are collaborating at a much deeper, more profound level, gaining insight and productivity while lowering their IT spending."

In another sign of market momentum, a record 20,000, customers attended Lotus events this year, an increase of 39 percent worldwide over 2008..
and from the Foundations announcement:
Facing increased demand for IBM products, more than 1,000 Microsoft Business Partners have already signed up to sell IBM's Lotus Foundations "office-in-a-box" appliance for small and medium sized businesses (SMBs) in the first five months of 2009.

According to Microsoft business partners, sales of Microsoft's Small Business Server (SBS) software bundle have slowed due to lack of innovation and partner dissatisfaction with their inability to add solutions and services.  Microsoft partners are looking for an alternative that provides SMB customers with more collaboration computing power for less money and more reliability in these challenging economic times.  

"Lotus Foundations is a complete, cost-effective solution that easily scales as a business grows.  When you add users, you know exactly what it will cost and the functionality you'll get," said Bernie Leung of Mesa Technology.   "With Microsoft SBS, you always have to worry about what additional licenses you will have to purchase - the SQL client is just one example."
You can find these releases here.

Honestly, it really amazes me that Microsoft even gets any more traction in their "Notes Compete" efforts.  The three amigos are in their fourth (or longer) year of trying this.  If they were really winning customers away from us, why would they need to keep increasing this effort, year on year, for more than four years running?  

In fact, I've heard two amazing reports from customers in progress of migrating from Notes to MS the last few days.  One is a large multi-national where people's jobs are being threatened if they don't get in line with the goal of migrating off Notes by 2010...setting up internal political showdowns where people who actually care how the business is running are having to fight bureaucracy that made a commitment to migrate, regardless of reality.  In another, I hear the service provider is in legal trouble for not being able to execute the migration in the timeframe that was originally committed.  My personal favorite is the customer who is migrating to Microsoft's hosted offering, which included the first step of having to physically relocate their Domino servers into Microsoft data centers in order to begin the process...obviously adding cost and complexity.   I wonder why Microsoft doesn't tout these references.

So bottom line on today's news -- our installed base continues to grow, we're winning in a variety of accounts, and Microsoft (and other) customers are coming our way.  In the next few months, we have a lot more excitement coming.  You'll want to be along for the ride.

Link: ibm.com: Companies Choosing Lotus Collaboration to Work Smarter and  Lower Costs >
Link: ibm.com: 200+ Microsoft Partners Per Month Flocking to Sell IBM Lotus Foundations >

Ed Brill Highland Park, IL USA Category:  Lotus  Add/View Comments [32]

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  1. 1  Ed Brill http://www.edbrill.com | 6/4/2009 5:27:27 PM

    and if anyone is curious about the "boom boom pow"...

    { Link } (No, it's not a rickroll :-)

  1. 2  Darren http://www.dadams.co.uk | 6/4/2009 5:39:46 PM

    And it doesn't stop there... last week I was asked to get some customers to speak to an analyst about their adoption of Symphony. Three calls / e-mails... three customers agreed to do it. Anyone who doesn't take the idea of Symphony ousting Office seriously ought to re-think. It's not going to happen overnight, but the momentum is already rolling.

  1. 3  Gary Sweeting  | 6/4/2009 7:19:30 PM

    "where people who actually care how the business is running... .. regardless of reality"

    Nice touch Ed, so the position once again is that any person/team that decides to move to another platform is either insane or has ulterior motives that are not in the best interest of the company... you've also clearly heard some amazing reports.

    Ed, can you look into your team in Hong Kong, they are literally offering to give away Notes & Quickr licenses to retain a couple Notes accounts (though I think IBM calls these "Wins" now). I know we used to do 90% discounts as a matter of course when I was there, but I thought we drew the line at 100% - damn, I heard that you didn't even give State Bank of India more than 97% discount.

    Of course, the customers still migrated since they have some very smart people who actually care how the business is running, but I'll be honest, it is making our job a little more difficult and really isn't in the best interest of our customers to slow down the migration process during this economic downturn.

    Thanks! Gary

  1. 4  Gary Sweeting  | 6/4/2009 8:02:06 PM

    Scratch that, based on what I'm hearing, this clearly isn't limited to HK or even Asia. It appears that 100% is the new 90%.

  1. 5  Ed Brill http://www.edbrill.com | 6/4/2009 8:05:09 PM

    Gary, you *really* don't want to get into a who gives what discount or other compensation to whom game as a Microsoft employee, do you? I mean really.

  1. 6  Gary Sweeting  | 6/4/2009 8:18:52 PM

    Sure, I've got a pocket full of interesting stories of software subsidizing hardware/services sales at Lotus, but I can honestly say I've never seen anything close from Microsoft. You've probably heard of stuff I haven't, but you seem to hear a lot more than I do.

    I think this is why Lotus can try the Project Liberate thing - because it was possible to estimate the contract value. In any given engagement with Lotus, I have no idea what the size of the deal is due to the discount. I once said to a customer, that if they were to decide to stay with Lotus, that they should ask for 90% discount or else they're leaving money on the table - his response was "Gary, I'm getting 100% discount". It's tough to beat 100% Ed. The customer still migrated.

  1. 7  Ed Brill http://www.edbrill.com | 6/4/2009 8:28:03 PM

    What did they get from Microsoft, Gary?

  1. 8  Gary Sweeting  | 6/4/2009 9:02:12 PM

    I assume that's rhetorical, since I feel the trust level is high between us Ed .. Microsoft doesn't have a big hardware or services business, so you can imagine that getting money from the software licenses is pretty important.

    In the end it doesn't come down to which offering is cheapest Ed - saying e-mail is just a commodity doesn't work every time. That said, your 100% discount does give some customers pause for thought - I'm not sure it's that effective in the long run as customers quite frankly find it embarrassing - and it makes the whole 25% discount on maintenance offer hilarious when all they have to say is "I'm evaluating Microsoft, what discount can you give?"

  1. 9  Rob McDonagh http://CaptainOblivious.com | 6/4/2009 9:40:03 PM

    @8 Now this is weird. Somebody from Microsoft is claiming that IBM gives bigger discounts than Microsoft does? Huh. I've never seen that happen. Granted, I've only worked for about 10 companies (all customers), and I've only been involved in about 25 licensing discussions, and about 5 potential migration discussion. Ed can probably multiply those numbers by 1000. But I have absolutely no idea how anyone from MS could say anything remotely like that with a straight face. What planet do you live on, anyway? Here on planet Earth, Microsoft is LEGENDARY for giving away product to gain marketshare.

    How long have you been at MS, Gary? When you say you've never seen MS heavily discount anything and everything in sight to get their foot in the door, does that cover 1 year or 10? If you've been there for a few months, I guess I can believe you. Otherwise? Yeah, not so much...

  1. 10  John Head http://www.johndavidhead.com | 6/4/2009 10:12:04 PM

    Gary - as someone who is a partner for both IBM and Microsoft, you really should let this lie. Both companies discount, in their own way. I have seen IBM go with a 90% discount and Microsoft offer to pay for the complete migration - for double the cost of the licenses.

    Can we move on to another topic now please?

    Manual Trackback on a mini press conference on these releases: { Link }

  1. 11  Gary Sweeting  | 6/4/2009 10:41:20 PM

    @10 Sounds fair John, this looked like it was going to degenerate into something like a "who's really winning share" discussion... much as I enjoyed the planet Earth remark.

    Thanks! Gary

  1. 12  Hal Ninth  | 6/5/2009 1:25:06 AM

    Deleted

  1. 13  Peter Wilson  | 6/5/2009 3:34:51 AM

    > obviously adding cost and complexity

    It's amazing what executives will pay to get Outlook as their Inbox.

    Pete

  1. 14  Jan Jorgensen  | 6/5/2009 3:37:39 AM

    Hopefully we will get to hear the same kind of stories here in Denmark, where it is complete opposite, companies migrate to Exchange.

    I wish that IBM here in DK would launch a campaign about notes/domino and Foundations. Maybe get notes/domino into the schools so students are familiarized with the notes client. Many people are hostile about notes since they are used to Outlook.

  1. 15  Ed Brill http://www.edbrill.com | 6/5/2009 6:18:27 AM

    @8-11 - Thanks for moving on. This whole thought that software subsidizes IBM's other divisions is completely disproven by reading IBM's financials on the relative profitability of the various divisions, with software being the highest. On the Microsoft side, it had been a giveaway of things like Exchange and SharePoint in order to preserve Windows and Office... but maybe with their recent drastic declines in these businesses, their generosity is waning.

    Anyway, glad to see these releases were enough of a direct hit to get someone from the other side all defensive and stuff. :-)

  1. 16  George Chiesa  | 6/5/2009 9:04:06 AM

    Ain't it funny? Few people - aside from purchasing office "tough negotiators" - care about the cost of the license. It's no longer "it's the apps studid", it's becoming "It's the TCO"... Even at cost of license = zero (out of support,piracy of plain stupidity), it's still the overall TCO !

  1. 17  Kevin Mort  | 6/5/2009 9:16:34 AM

    More of these is a good thing in talking with customers.

    Of course there always has to be someone that wants to spin it into a negative - because as we all know - any good news on Lotus is made up, anything from MS is gospel. #fail

  1. 18  Brett  | 6/5/2009 10:27:41 AM

    @17 Hah! Excellently said Kevin.

    "because as we all know - any good news on Lotus is made up, anything from MS is gospel"

    That certainly seems to be SOP for most of the IT press.

  1. 19  Timothy Briley  | 6/5/2009 11:25:39 AM

    @16 -

    "Free" licenses are like "free" kittens. By the time you're done, they're both pretty expensive.

  1. 20  Keil Wilson  | 6/5/2009 1:54:20 PM

    Is it just me or is the first press release really badly written? I mean, it uses the word "driven" twice in the first sentence. It seems to me like some of these press releases are so full of marketing speak that the actual message is lost. Maybe I'm a bit of a simpleton, but I wish these releases could use more straight forward language. Why not just drop the first sentence of the first paragraph all together? Also, there's no need to tell me how 'green' and 'smart' things are, just tell me that Domino lowers TCO by 30 percent by reducing the number of severs needed. Why can't we just keep the message simple?

  1. 21  Nathan T. Freeman http://nathan.lotus911.com | 6/5/2009 2:47:32 PM

    @19 - ROFLMAO

  1. 22  Edwin Kanis  | 6/6/2009 4:21:04 PM

    What is the story around the mentioned customers Ed, some of them like Coca-Cola Company, HSBC, ABB and BASF are IBM\Lotus customers for years and years as far as i know.

    But maybe i just know to little...

  1. 23  Volker Weber http://vowe.net/about | 6/7/2009 3:51:40 AM

    IBM speak, Edwin. Winning means they did not lose the customer to Microsoft.

  1. 24  Ed Brill http://www.edbrill.com | 6/7/2009 8:20:02 AM

    @22 while yes, they have been Notes/Domino customers for a while, many of these customers have made recent investments in additional Lotus software products.

  1. 25  David Bell  | 6/7/2009 10:06:46 PM

    @23 - is win not the opposite of lose ? That is pretty universal, not IBM speak.

  1. 26  David Bell  | 6/7/2009 10:11:28 PM

    @23 - also, a decision to stay with IBM is very definitely a win for the customer, given how many $$$ they would ultimately have to pay to migrate to MS, never mind the wait for a viable MS alternative to become available (current MS prediction 'wait and see what shows up in 2010').

  1. 27  Volker Weber http://vowe.net/about | 6/8/2009 3:27:30 AM

    David, if you say you win a customer, most people would think you did not have it before. As did Edwin.

  1. 28  Jan Van Puyvelde  | 6/8/2009 4:43:16 AM

    @27 - True. It's more something like "they won the battle for <insert products> at the customer"

  1. 29  Michael de Haas  | 6/8/2009 5:26:49 AM

    From my experience, it is not only IBM that consider an account a win, when it comes time for contract renewal. Both involve extensive negotiations and work for all. Now, am I wrong in assuming that this may be a contract renewal that goes far beyond the purchasing of Notes licences? Conversly, what client in their right mind lets the current supplier think that they automatically have the renewal in the bag? If there are some, I want customers like that?

    Michael

  1. 30  Nathan T. Freeman http://nathan.lotus911.com | 6/8/2009 9:05:24 AM

    @28 - Yeah, the Allies didn't win the Battle of the Bulge or the Battle of Kursk, either. And the 2001 Lakers didn't win the championship, 'cause they'd already held it.

  1. 31  David Jones http://www.bleedyellow.com/blogs/jonesy/ | 6/8/2009 9:34:11 AM

    @27 - If they had said "won a NEW customer", sure, your reasoning would apply. As stated all that means is that they had competition for the account and they ended up with the account.

  1. 32  Edwin Kanis http://www.eniac.nl/essentials | 6/8/2009 4:59:34 PM

    @27 i can imagine you 'win a new deal' and that's all fine with me, though it does not seem to be a new Lotus customer. Anyway, nice to see winning deals and customers. Champaign!!