IBM's Latest SaaS Move Takes Lotus Notes to Cloud

The new hosted edition of the flagship offering provides a new opportunity for channel partners to target the retail, manufacturing and insurance verticals. Offering Notes as a service is a natural extension of IBM's business, executives say.

October 23, 2008

Al Senia

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Widening its embrace of Software-as-a-Service (SaaS), IBM has launched a hosted version of its venerable Lotus Notes enterprise messaging offering, potentially giving its partners and customers new flexibility but also pushing IBM into greater competition with existing online groupware vendors.

Dubbed Lotus Notes Hosted Messaging, the new edition of Lotus' flagship office application marks the continuing growth of enterprise applications available in the "cloud", the concept of hosted software being increasingly embraced by the channel and popularized by vendors like Salesforce.com and AdventNet, with its smaller Zoho Office Suite. More recently, Google also leaped into the fray with Google Apps for businesses.

For IBM Lotus, offering Notes as a service is "a natural extension of the portfolio; we've seen Salesforce.com (NASDAQ: CRM) and Google (NASDAQ: GOOG) in SaaS and the cloud, and it seems to be a natural way for us to extend our business," said John Dunderdale, Lotus' vice president of worldwide sales.

It also may prove advantageous for IBM, since SaaS-based offerings continue growing in popularity among channel partners. More businesses are seeking to offload the expense of installing and maintaining on-site software. Priced at "under $10" per user per month, Lotus Notes Hosted Messaging will be stored on a server at an IBM datacenter managed by a dedicated services team. It is available with two service-level agreement (SLA) options, spam- and virus-filtering, and backup and restore services.

The move also signals yet another stage in IBM's increasingly aggressive marketing behind Notes. Last month, it enabled iPhone access to Lotus Notes.

Lotus Notes Hosted Messaging is aimed at retail, global manufacturing and insurance companies with 1,000 to 10,000 users. IBM (NYSE: IBM) also said it would tailor software and service plans for smaller and larger companies.

"That 1,000 to 10,000 figure is just an initial guideline," Dunderdale said. "Once you get past a certain number of users, then strategic outsourcing may be more appropriate."

The service "will have appeal for underserved users in large enterprises or new departments of large enterprises and small and medium-sized companies that don't want to have the responsibility of maintaining the infrastructure or want to add users on the fly," he added.

IBM is moving strongly into the cloud, and has a computing infrastructure in the cloud that consists of two datacenters, one in its Research Triangle Park, Raleigh, N.C., and the other in Tokyo. Big Blue also offers Sametime Unyte, a Web-based conferencing application.

Earlier this month, IBM launched an initiative that offers a mix of on-premises and cloud computing applications to help its channel partners offer those services to customers. IBM also opened up an early version of Bluehouse, a social networking and collaboration cloud service designed to connect people from different businesses.

Industry watchers reacted positively to IBM's latest SaaS move.

IBM is "offering this as a hosted service on the cloud, and they've got Sametime Unyte, their Web conferencing system. What they're doing is a full-court press," said Laura DiDio, principal at analyst firm ITIC "You get antispam, antivirus filtering, or backup and restore, and each mailbox has a gigabyte of capacity. It's very competitive."

Better yet, the service has the IBM name behind it and is hosted in IBM datacenters, "so a customer sees reliability. It's a brand you can trust," DiDio said. "People in the small and medium business market are very risk-averse."

However, IBM needs to be even more competitive to be successful in the small-to-midsized business market, "where Microsoft has done so well," DiDio added. "They might even want to do some special promotions and offer the service at $5 a pop for a limited time in selected markets.".

 (This article was adapted from InternetNews.com.)

TAGS: cloud computing,IBM,SaaS,Lotus Notes,managed services

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