Lots of people have sent me links to news coverage of Microsoft's official announcement yesterday of Microsoft Online, including their hosted Exchange offering.  I was especially interested in Tom Foremski's view on ZDNet, because he sees it for what it is

Ron Markezich, corporate VP of Microsoft Onlne said, "Two-thirds of our users are using our Online Services because they want to move away from Notes."

It can cost corporations as much as $1,000 per user to move away from Notes. By signing up for Microsoft Online Services it is a quicker and cheaper way to move to a different solution.

Microsoft's Online Services Group might be better renamed the Lotus Notes Migration Solution Group!
Well, it's quicker and cheaper, but does that make it a good idea?  Microsoft has been aggressively promoting Exchange Online at existing Lotus customers in the last few weeks...it's the "play du jour" for their sales team.  Why?  Because for the last four years that Microsoft has been running their Notes Compete program, nothing else has worked, so they might as well try this approach.  Nobody really knows if it is a good idea, if they truly will save money, if the system will be reliable, if it will work globally, what happens to their data if they stop using the system, and a myriad of other issues.  Still, since nothing else has worked, Microsoft is trying to play the fixed cost game and get CIOs to focus only on the per-user per-month hosting cost, which is still only a portion of the total cost of ownership.  And in the media coverage as well as the discussions that are taking place, Microsoft is desperately trying to keep the focus and scope to e-mail only.  Why?  Because they've completely given up on the idea that Notes applications can be migrated, so now with a hosted mail offering, they try to attack the commodity piece of the equation, hoping to bite off something rather than nothing.  And they know they need to do it now, because if you are already deploying Notes 8, the last good reason they've ever had to have the migration discussion -- usability -- is out the window.  

I met a customer earlier this week who said that their Notes 8 deployment is growing virally, as users see others in their organization running Notes 8, ringing up IT, and saying "I want that!"  When is the last time that happened for Notes?  This is incredible validation of Mary Beth Raven's leadership and the entire usability effort that went into Notes 8.  So, Microsoft is quickly running out of candidates to go after with their last remaining arrow in the Notes Compete quiver, and they come up with....
One of the early customers is video retailer BlockBuster, which has been using Exchange Online for about six months. Blockbuster CIO Keith Morrow said in an interview that Microsoft's online services came at a good time for the company, which was on a several-generations-old version of Lotus Notes.

Morrow said the video rental company needed to make a change of some kind, and the option to move to Exchange without having to bring that skill set in-house was a key selling point, as was the ability to offer better mobile options, including Outlook Web Access and iPhone support.

Another Notes switcher in the crowd was Eddie Bauer, which has been a Microsoft Online customer for about five weeks. Chief Information Officer Rich Mozack said the clothing retailer wanted to move off Notes but couldn't make the numbers work to run Exchange on its own.

"We just couldn't justify the up-front investment," Mozack said.
Of course you couldn't, because I have yet to see, in all my years of this competition, a real, valid business case for migrating -- and even less-so as the market has moved on from e-mail being a strategic tool and towards collaboration.

That last quote was from CNET, "Microsoft aims to be a good host".  But the CNET reporter missed an important detail, which Information Week picked up:
"On a Friday, 1,400 of Eddie Bauer's associates went home as Lotus Notes users, and on Monday they came to work as Outlook users with Microsoft Online Services," Rich Mozack, CIO at Eddie Bauer, said in a statement.
1,400 associates?  Wikipedia says that Eddie Bauer has 10,000 employees.  So what's the real story here?  Were those 1,400 users retail store clerks and warehouse employees, who perhaps just need a basic mail experience?  Did they consider Domino Web Access?  What are those 8,600 other users using (something tells me it was never Lotus Notes...)?

As usual with Microsoft, there's a lot more to this than meets the eye.  I am somehow reminded of their Lotusphere spoiler release in 2006, where Microsoft trumpeted the decision of retailer CompUSA to migrate from Notes to MS.  Like the Blockbuster story above, CompUSA was a retailer whose very business model was under attack, and they had challenges with Notes.  Rather than hire a housekeeper to clean up their current mail system, they decided, at a time when they likely could not afford to, to go buy a new house (if I finish the metaphor, they also had a sub-prime loan).  Microsoft Online is just their latest attempt -- you don't even have to build the house yourself, you just move in.  What happens when we find the mold in the walls?

If you find yourself in the situation where Microsoft is trying to sell you a new house in the neighborhood known as "the cloud", let me know.  We've assembled the executive-level materials to show that IBM has a better idea -- solving your business problems.  Whether that involves cleaning up your current premises-based deployment, our own Lotus Notes Hosted offering, working with a business partner, outsourcing, or something else creative, I promise we can do better -- whether you are a current Notes customer or not.  More importantly, we will focus on collaboration as a strategic advantage, not just a way to try to negotiate your payment like that used-car salesman.

Link: ZDNet/Tom Foremski: Microsoft's cloud is more about Notes migration and less about a new IT architecture >

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