Dominos Falling for Lotus Notes?

Editor’s note: IBM’s Lotus Software division, under pressure by customers to clarify its product road map for Domino, on May 8 announced plans to continue to support and enhance the existing collaboration platform while offering separate paths for customers who wish to embrace Java, Web services and other IBM technologies.

PDF Download Doug Brady is happy with IBM’s Lotus Notes software.

Brady is technical services partner at Plante & Moran, the 11th largest CPA firm in the U.S. Last fall, his company was getting ready to jettison its Novell GroupWise messaging software in favor of Microsoft Outlook and Exchange.

But Plante wanted to find a way to automate the workflows, like generating client financial statements that it had done manually in GroupWise. The firm did prototypes on Microsoft Exchange, Notes, and workflow software from Ultimus.

“The Notes one was done in 40% of the time required for the others, and it met all of the requirements,” says Brady. And just as importantly, the Notes solution could be done with a single set of software.

So, just 60 days away from its planned Exchange migration, Plante & Moran pulled the plug on Microsoft and went with Notes and Domino. Brady says he expects to see a full return on investment in Domino within one year.

Lotus needs more customers like Brady. While its business is growing, Lotus now trails Microsoft in overall share of the corporate e-mail market. A study last December by the Palo Alto, Calif.-based Radicati Group now gives Microsoft’s Exchange a 44% share of corporate messaging seats worldwide, versus 40% for Lotus.

While recent market research by Lotus found 74% of its customers were not seriously considering a move in the next 12 to 18 months, the company’s share of new business is dwindling. A study by Ferris Research found that new Exchange seats outnumbered new Notes seats almost two to one last year. And as of late, “that ratio hasn’t really changed,” says David Ferris, president and analyst.

“The issue, as it’s always been, is that Lotus offers more functionality, but that’s not required by everyone,” says Sara Radicati, president and CEO of The Radicati Group. But it’s the Swiss Army Knife nature of Notes that is its greatest strength.

Detractors say Lotus has maintained its market share mostly through fear of change and inertia. The fear of having to migrate thousands of individual Notes applications to another platform kept many companies from even considering migration to Microsoft’s Exchange or other mail-server products.

But fear and inertia have cut both ways for Lotus. A sizeable number of customers balked at moving to the last major upgrade of Notes, Domino Release 5, despite a significant set of new features—mostly because of reports of major migration hassles.

Now, mixed signals from IBM officials about the direction of Notes and Domino development—with conflicting announcements about support for Java 2 Enterprise Edition and plans to replace Domino’s data store with IBM’s DB2 database—have made the company’s plan about as clear as mud. Competitors are seizing on IBM’s lack of clarity to lure away Lotus customers.

“IBM is migrating Lotus apps to WebSphere,” says Eric Blankenburg, director of engineering for consulting firm Avanade. “Customers are very concerned because IBM hasn’t clarified the story.”

At least the second half of that statement is true. Ed Brill, senior manager of messaging products at Lotus, insists IBM won’t force users to migrate to WebSphere. “What’s in Domino 6, and then what’s in Domino 7 or whatever we call it, will be additive to what we’ve got today; there’s no replacement of anything.”

IBM is developing a separate, “next-generation” version of Domino based on Java 2 Enterprise Edition and IBM’s DB2 relational database. Domino 6 and its successors will provide better connections to WebSphere for customers who want to leverage Web services.

So, in theory—unless IBM changes its plans yet again—Lotus customers will be able to have their cake and eat it too. Doug Brady won’t have to throw away his Swiss Army Knife solution in exchange for a truckload of new tools and development hassles.

Of course, that’s just a theory.