There are some recurring themes that I hear when I talk to customers about Lotus, Notes/Domino, and the marketplace.  One that comes up frequently is a view that Lotus is "nowhere" in the SMB market, and need to do things differently to gain more share in that space.  I often point out in response that over half of the Notes/Domino customer base is in SMB, at least according to IBM's definition.  But that's not good enough, because way more than half of all businesses are SMB, even according to IBM's definition.

The reality is that in the SMB market today, there are some default choices, and anything else needs to be "sold".  In the Notes/Domino space, we've been successful at doing just that, selling on solution value, innovation, Express pricing, and integration.  Of the three Domino Express offerings, Collaboration Express has been and continues to be the most successful at introducing Notes/Domino to SMBs.

But there's room for more Lotus in the SMB marketplace, and early indications are that Notes/Domino 8, Quickr, and Sametime 7.5 are developing interest.  

Challenges exist, too, though.  It's been a couple of days, but Charles Robinson wrote an excellent outsider perspective on how IBM builds products, and how that influences what gets taken to market.  Charles asserts that the road ahead is much more complex:

None of the new functionality uses Domino. Activity Explorer is deployed on Websphere and DB2. The Sametime RTC Gateway is as well. Lotus Component Designer can't deploy to Domino, you have to deploy to Websphere Portal. The only real interface is web-based, but you can wire it into a composite application in Notes 8 -- provided you use the Standard (Eclipse-derived) client, which comes with its own huge list of caveats. ...

[IBM] are releasing exciting products with amazing features and functionality. They're just doing so on an infrastructure that's too heavy for the average SMB to justify, and at a price point that's unreachable for them as well. ... Listen to all your customers and do the things they ask you to. Don't be afraid to try another flavor, possibly something in the "lean" or "light" area, or different packaging. Hint: licensing (i.e. "Express") doesn't go far enough.
Now, Charles asserts that part of the problem is that IBM uses ourselves as a "dogfood" test case (sometimes politely expressed as "eating your own cooking").  I am not sure you can point to that as an/the issue.  I think, rather, the structure of some of the new products or capabilities is coming from the objective of using existing best-in-class, modular technologies.  So things could be getting complicated, and Nathan Freeman attempts to explain why (slightly tongue-in-cheek, but only slightly) in comments:
IBM does it the other way around. The product requires twin PhDs in computer science and comparative philology to install. It has no value to a group of 10 people, because the value comes from the sheer volume of indexable content. If you connect it to an internal LAN, you still can't access it, because you haven't properly configured your Tivoli Directory Integration against DB2 LDAP to allow the Websphere SSO login so you can provision the Expeditor components necessary to deploy your J2EE plug-in framework. But if you make the investment to rollout to 50,000 users, you'll double earnings in two years.
I can see where that would be intimidating to an SMB.

Philip Storry picks up Charles' meme, and writes about the "tragedy" of IBM Lotus in SMB:
The SMB Market prefers (demands?) all-in-one solutions, especially now that they're used to Microsoft Small Business Server. And that means that any solution must be fairly tightly integrated in the user-access area. If you create a user or group for Notes, they must also exist for network file & print and database access.

Now, technically, I think IBM can do this. They have the technology lying around to do it, certainly. But I don't see the willpower.  ... I have a sneaking suspicion that their sales team prefers large sales, and that this means the unspoken rule is that if the first ten or so sales don't make you back your development costs then it just isn't worth it.
IBM has several segments to its salesforce, and I want to be clear that some of them very much prefer to sell to SMB, and are successful there.  So are many of our partners.

But there is more to be done.  The theme of these two posts is that to be successful in SMB, IBM Lotus need to get (back to) simple product architectures and deployments (like WebSphere Portal Express), simplified and cost-effective pricing, and integration.

Now I know that many of you are SMBs by any definition, or partners who sell to them.  Do you agree or disagree with Charles and Philip?

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