IBM unites the old world of email with the new world of enterprise social software

OVUM VIEW

Summary

The Lotus brand was retired at the annual IBM Connect conference last week. Ironically, this coincided with the thirty-year anniversary of the launch of the product that gave birth to the brand: Lotus 1-2-3, the first “killer app” for the IBM Personal Computer. The PC changed the way businesses thought about and used information technology (it was marketed to the business professional via consumer advertising), and IBM is now hoping to disrupt the market again by pitching its revamped SmartCloud portfolio directly against Microsoft Office 365 and Google Apps for Business. The theme of the first Lotusphere in 1993 was “working together,” and the IBM Connect conference carries this forward by combining the technical content liked by IT departments with the business insights that organizations need to accelerate their social business strategies.

New versions of IBM Notes and Domino show Microsoft the way forward

Ovum’s assessments of IBM’s collaboration portfolio over the last four years have put IBM ahead of the field in terms of technical capability, and the company’s enterprise social networking software has led the way in terms of estimated revenue for the last three years. However, despite IBM’s obvious technical prowess in this domain, the company’s share of the enterprise collaboration and messaging market has continued to decline as Notes and Domino customers switch to other offerings.

Conversations with Ovum’s enterprise clients suggest that the primary reason for this switch away from Lotus-branded products, particularly Notes and Domino, is due to a perceived lack of modernity and innovation. Although there have been many updates to Notes and Domino since its initial release, the current major version was launched back in August 2007 – a lifetime ago at the current rate of software evolution.

These perceptions could be dispelled this year, with the announcement of IBM Notes and Domino 9.0 Social Edition. This release, due to be launched in March 2013, will complete the “social messaging bridge” to IBM Connections, and this is a bridge that Ovum believes is essential to drive social business, increase operational efficacy, and improve organizational thinking and learning.

In contrast, Outlook 2013 (released on 29 January, 2013) still offers only minimal integration with SharePoint, and with no release date announced for a social messaging bridge between Outlook and Yammer, Microsoft is the company that now appears to be behind the innovation curve.

Of IBM’s Connections customers, 80% are not using Notes and Domino

IBM Connections, a Web 2.0-style business social software suite, continues to generate good revenues within the enterprise social networking market against stiff competition from the likes of Jive Software and Yammer (now part of the Microsoft Office Division). At the conference, IBM’s VP of Social Computing Software, Jeff Schick, provided partners and customers with a comprehensive insight into where Connections is being used (e.g. HSBC’s rollout of Connections to around 385,000 employees globally) and where it is heading (integrated document management, better mobile features, and integrations with Websphere Portal and Cognos – the company’s BI platform), but it was a statistic from IBM’s Mobile Enterprise Marketing Director, Ed Brill, that caught Ovum’s attention. He offered that 80% of Connections customers do not use Notes and Domino, which indicates that they are probably using Microsoft Exchange and Outlook.

Ovum “likes” what IBM is doing with its social business software

IBM is clearly doing a good job of integrating Exchange email and calendar information with Connections, and it is winning business as a result. In contrast, despite the initial potential of the Outlook Social Connector, Microsoft has failed to garner any real support for this technology in the enterprise social networking space, with vendor Harmon.ie providing a stop-gap solution for many enterprises today. If Microsoft fails to go beyond the cosmetic updates to Office that we have seen in recent releases, it will find companies such as IBM (which has just released its own web-based editors – IBM Docs) and Google increasingly encroaching on its territory, especially its cloud-based Office 365 offering. In the meantime, IBM’s next big challenge is to find a way to engage with the consumer persona of the connected employee, as this will help the company to shake off the negative connotations that continue to detract from its offerings.

APPENDIX

Author

Richard Edwards, Principal Analyst, Ovum Enterprise IT

richard.edwards@ovum.com

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