Leadership By Numbers

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What are analysts and Microsofties saying about IBM's press releases from last week ? The search engines have picked up the releases, and this new face to Lotus has created some controversy. Even Quickr is being cited outside the core tech sources.It's not just about IBM's press releases, either. Product announcements for mobile devices are much more likely to contain content about Lotus Domino connectivity (e.g., the Nokia E75).

200+ Microsoft Partners Per Month Flocking to Sell IBM Lotus Foundations Appliance was a tidal wave that washes the "Lotus is just Notes" banner out to sea. A second wave followed, shortly after, with the next announcement of Companies Choosing Lotus Collaboration to Work Smarter and Lower Costs.

Harry Brelsford, adds some back story, explaining why loyal Microsoft partners would be buying into the Lotus Foundations program:

. . . many Microsoft partners privately express to me that the Microsoft Program has gone 80/20. That is, the focus is on select elite upper-caste SMB partners and their peers (typically upper-middle class males -- this is the top 20%) that bring in 80% of the licensing revenue. Engaging in an 80/20 strategy is fraught with issues including creating opportunities for your competitors.

The VAR Guy weighs in with an acknowledgement that he "has heard rumors that Windows Small Business Server 2008 suffers from a difficult upgrade path," and that "IBM, Cisco Systems, and a growing list of technology vendors smell blood in the water." And, The SBS Diva, suggests that "regarding the slowing sales.... it's the economy stupid."

Not everyone is so sanguine in reading press releases. Stephen Arnold is suspicious about the numbers, and even thinks that fees may have been waived to induce Business Partners. So, there is going to be an undercurrent that doesn't realize that in order to be in the Lotus Foundations program, a unit has to be purchased. They are not being given away.

Laurie McCabe, a Partner at Hurwitz & Associates, summarizes the announcement with her own experience:

I think IBM is doing it right. I've had several demos at different IBM events, and Foundations makes good on its pledge to provide small businesses with an easy to use, turnkey collaboration solution--really! Foundations offers file storage, advanced backup and recovery, connectivity and security, collaboration and email and application services in one integrated package. Some of the things that set it apart include:

• Automated installation and configuration; it discovers and maps the network for you, and auto-configures firewall and VPN, so you can deploy it in 30 minutes or less.
• Automatic data backups, and full system recovery if a disaster should occur.
• Symphony office productivity tools are bundled with, so you don't need to buy Microsoft Office software.
• Under the covers, you get the reliability and cost benefits of Linux and open source technologies (Foundations is priced less than Microsoft SBS servers), but you don't have to know a thing about Linux or these technologies to run it.
• It has the collaboration power of Lotus Notes and Domino, tailored for small businesses, with Notes clients for Windows, Mac, and Linux.

As important, IBM has factored in what's often the biggest hurdle to getting momentum for new product: inertia. Outlook users can continue to use Outlook with Domino Access for Microsoft Outlook. And, IBM added VMware virtualization to Foundations, so you can also run Windows applications on it. Customers don't have to give up things they already use--Outlook and Windows apps, such as Intuit QuickBooks. And, I almost forgot--you can also get a 30-day free trial, and it's black and yellow, like a bumble bee.

The small business technology market and the channel partners that serve them are at a turning point. Many businesses are tired of dealing with the cost and complexity of Microsoft products and licensing, and channel partners are deciding that they need another option for serving customers that don't want to deal with these hassles. This time, IBM is in the right place, at the right time, with the right solution, to give them a true alternative.

From Redmond, the Microsoft message seems out of sorts with what is currently being said by independent analysts. Bob Muglia, president of Microsoft's key server and tools division, argued to Bank of America Merrill Lynch analysts that Exchange is cheaper than Domino, which he saw as "long in the tooth." Yet, the Forrester Research analysts are defining the ND8 class of Lotus and Domino as presenting a "way cooler" implementation. IBM's approach to collaboration is looking pretty visionary.

We are in the midst of an industry shift away from the Microsoft desktop-to-server platform. Linux is starting to emerge on consumer devices (e.g., ARM processors for the hardware in smartphones and netbooks; the software is Ubuntu, Moblin, or Android). Lotus should have a strong association with this direction. After all, Lotus Notes, Domino and Sametime have supported Linux for years. Oddly, the synergy has been mostly confined to a corporate environment.

Domino Linux seems to have been principally about running a cheaper data center, rather than winning new converts. This argument can work both ways.  It's possible for Microsoft to steal Linux away from Domino, by touting Linux clients as building-blocks for re-architecting a cheaper messaging platform. Right now, the latest Gnome release includes a mapi implementation for the Evolution client, so that Ubuntu, for instance, can connect up to an Microsoft Exchange server with a free, open-source mail client.

Fedora 11 is readying it's next release, and it will be supporting Openchange to provide "a portable Open Source implementation of Microsoft Exchange Server and Exchange protocols." It's interesting, and it won't happen overnight, but just as the Samba has created Windows compatible file servers, it's fair to expect the same for email through the open libmapi protocol. If Domino were to include the open libmapi protocol (or its capability), then the advantage would be for Domino.

For those that work within the IBM Lotus framework, the returns on their investment is paying back big dividends. The flexibility of implementation, the pricing structures, and the base technology are being recognized as best-in-class. The Business Partner program has expanded and analysts are giving Lotus a thumbs up. IBM/Lotus is definitely attracting attention. If Lotus ties up some concerns with the low-cost Linux client, and continues to support consumer devices, they are going to continue drawing a crowd.