January 21, 2009
By

Richard Adhikari

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Channel partners could play a role in determining who comes out on top in an escalating battle in the enterprise between Microsoft (NASDAQ:MSFT) and IBM's (NYSE:IBM) Notes/Domino platform.

IBM contends more enterprises are replacing Microsoft applications with the Notes/Domino platform. However, Microsoft executives deny this, claiming Notes/Domino users are switching to the company's application suite. As the battle intensifies, VARs and other channel partners active in the enterprise could emerge as important trusted advisors in the rivalry.

At IBM's annual Lotusphere conference in Orlando, Fla. this week, the vendor announced that Notes licenses now total 145 million worldwide. This includes more than 12,000 new organizations that bought their first Notes/Domino licenses over the past 15 months ending in the third quarter of 2008, according to an IBM statement.

Nick Shelness, former chief technology officer at Lotus and currently a senior analyst at Ferris Research, said that both companies are battling for dominance in the market. However, he doubts claims of customers switching over from either vendor to the other.

"These environments are very sticky to use, and there's a huge cost involved in the migration, especially going from Notes to Exchange and SharePoint, because people have lots of Notes applications, and re-implementing them for SharePoint and .NET is expensive," he said. Microsoft Exchange uses the .NET framework.

According to IBM, more than half the global Fortune 100 firms now use Lotus Notes and Domino. They include more than 80 percent of the largest banks, as well as consumer product, electronics, insurance, pharmaceutical and telecommunications companies.

IBM Claims New Customers

In addition, several companies have standardized on Lotus Notes and migrated their existing Microsoft Exchange environments to the latest versions of Notes/Domino 8, according to IBM. These include Bank of New York Mellon (NYSE: BK), Manulife (NYSE: MFC), and Sherwin Williams (NYSE: SHW), IBM said in its statement.

New purchasers of Lotus Notes include the Coca-Cola Co. (NYSE: KO), Southern California Edison, and hotel chain operator Global Hyatt.

However, Microsoft disputes IBM's claims. "More than 10 million people have switched from Lotus Notes to Microsoft Exchange since July 2006, including Coca-Cola Enterprises (NYSE: CCE), Blockbuster (NYSE: BBI), Aviva, Eddie Bauer (NASDAQ: EBHI), Ingersoll Rand (NYSE: IR), and Bombardier," a Microsoft spokesperson  said in response via e-mail.

Coca-Cola Enterprises is a subsidiary of The Coca-Cola Co., so both vendors' claims are technically correct.

The Microsoft spokesperson said Coca-Cola Enterprises migrated 70,000 employees from Lotus Notes and Domino to Microsoft Online Services, including Exchange Online and SharePoint Online. The spokesperson also claimed that Ingersoll Rand migrated 19,000 seats from Lotus Notes to Microsoft Online Services.

"IBM customers continue to choose Exchange and SharePoint, which deliver communications and collaboration technologies both on premises and as a hosted service," the spokesperson said.

Shelness also pointed out that both vendors are not comparing apples to apples, as they are not pitching one product directly against another.

Social Networking Impact

IBM's claims are an extension of its increasingly aggressive marketing of Lotus Notes and Domino against Microsoft's products. Earlier this month, IBM unveiled Lotus Notes 8.5 for the Mac at Macworld 2009. In October, IBM launched a hosted version of Notes. In September, it unveiled Notes Ultralite for the iPhone.

According to IBM, social computing features such as integration with the Lotus Connections enterprise social networking technology, for which Microsoft does not offer an alternative, and connectivity with the Apple (NASDAQ: AAPL) Macintosh platform are also helping drive acceptance of the Notes/Domino platform.

The Microsoft spokesperson disputed IBM's claim about enterprise social networking technology. "SharePoint owns 34 percent of the corporate social software market," the spokesperson said. "As part of Microsoft's investments in collaboration, Microsoft has done tremendous work around things like social computing, and integrating presence and Web 2.0 technologies like wikis and blogs with social computing

(This article was adapted from InternetNews.com.)

TAGS: Microsoft, Lotus Notes, Domino, IBM, SharePoint

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