Lotus adds value to messaging platform

At Lotus Sphere, towards the end of January, Lotus trotted out the most recent instalment from its long running Raven project adding further credence to the company’s claim that it has evolved over the last 18 months.

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By  Greg Wilson Published  February 27, 2001

Page 1|~||~||~|At Lotus Sphere, towards the end of January, Lotus trotted out the most recent instalment from its long running Raven project; the Discovery Server. The discovery engine delivers the backend search functionality to the vendor’s workplace portal interface — K-Station— released at the tail end of 2000. More significantly Discovery Server has filled out Lotus’ knowledge management portfolio, adding further credence to the company’s claim that it has, over the last 18 months, evolved from the one product company of yesteryear.

At the IBM hosted E-business University event held in Dubai, the solutions message was clear — it’s just not about peddling the company’s flagship product, Notes/Domino, it’s about adding value to the messaging platform, either through greater collaboration functionality of Same Time or Quick Place; knowledge management products or e-learning.

With analysts warning that the messaging market will draw closer to saturation point over the next three years, the pressure for Lotus to protect its installed base, deepen the use of its technologies and extend the reach of its software beyond the enterprise is critical to the future of the company.

According to Meta Group’s programme director of web & collaboration strategy services, Joaquin Potel, Lotus has arguably its best technologies ever, but it still has to execute on the potential of its software portfolio. “Everything is Web enabled, everything is ready to plug & play. [Lotus is] delivering on this collaboration strategy. But [Lotus] must learn to articulate this collaborative commerce story that is critical for Lotus,” predicts Potel.

The need to execute on a strong product portfolio wasn’t far from the minds of IBM’s software executives at the recent EBU. “There isn’t saturation in the market, there is growth there. It’s a question of execution,” said Mauritzio Carli, vice president of IBM’s EMEA Software Group. “There has to be hyper-growth in the knowledge management and e-learning,” he adds.

In the eyes of Lotus’ management, the campaign to expand the installed messaging base has already been handed its first break. According to Lotus’ worldwide technical advocate, Mike Dudding, Microsoft has fumbled the ball by dropping ‘Lotus killer,’ functionality from Exchange 2000. Within six months of delivering Exchange 2000 Microsoft has dropped support for Web Store, Officer Designer and the locally hosted Web Store, in favour of the next generation database development project, codenamed Yukon. “All the Lotus killer functionality Microsoft has talked about hasn’t materialised,” Dudding told delegates at EBU. “We have this year and next year to make our targets and crush the competition. They have no collaboration strategy and the real value lies in more than messaging.”

Potel agrees that Lotus has the edge over Microsoft in the messaging arena. Microsoft’s groupware strategy had been relatively straightforward, based around Exchange 2000, Web Store, and its portal server development project Tahoe. But, the software titan’s strategy has descended into a confusing muddle. Microsoft’s groupware position, “is really confusing and what is worse it is moving away from the current Web Store repository to SQL Server, that can potentially be very painful,” warns Potel. “[This] doesn’t necessarily have to be a problem. But the reality is that this product has been in the market for around six months, and [Microsoft is] dropping it. The question is should companies spend time developing applications on top of Web Store, if this is going to change?,” he adds.

Haider Salloum, product marketing manager for Microsoft’s local business enterprise division, says that companies can still develop applications based on the Web Store. With Yukon not due to emerge for another 18 months at least, “Web Store is the best place to store unstructured data,” says Salloum. “Yukon will store both structure and unstructured data. Butnot everybody will want to use Yukon when it arrives... There will be a migration path for different companies,” he adds.

||**||Page 2|~||~||~|Recent developments in Microsoft’s Redmond HQ may offer Lotus a competitive advantage for now, but the Exchange 2000 platform is a substantial improvement on version 5.5 — a product that Microsoft had already managed to take significant market share with, regardless of Lotus’ claims of technical superiority.

With Microsoft always a latent threat to Lotus’ installed base of 78 million Notes/Domino seats, the need to break out of the enterprise and play in the e-commerce space before other contenders for the ‘collaboration crown’ emerge is urgent, says Potel. Heading out in the market and just populating its installed base with Same Time, Quick Place or its knowledge management technologies, isn’t going to be enough to preserve Lotus’ position in the long term. By breaking from the enterprise Lotus will be able to position its collaboration technologies as customer relationship management (CRM) tools, engaging web visitors of both B2B/B2C sites.

Now all Lotus has to do is convince businesses it can play outside the firewall — and key to that could be ending the marketing feud with rival Microsoft. “The problem with Lotus is that they have to stop comparing themselves against Microsoft,” says Potel.

“Microsoft only plays outside the firewall when it’s in a Microsoft shop. But the fact is there is this huge Java space and nobody doing collaboration. Why doesn’t [Lotus] go out and populate that market? Lotus has the right technology now. But I’m not as optimistic about its marketing and ability to execute,” he adds.

Lotus’ marketing position is also going to be key if the vendor is going to successfully develop a business for its knowledge management portfolio. During Raven’s development stage, there were a number of confusing messages from Lotus. With the delivery of K-Station and Discovery Server, much of the confusion has been brushed away. However, whether Lotus can turn its knowledge management projects into the hyper-growth area demanded by Carli is going to prove a challenge. “The only problem with knowledge management is that it’s still a concept that is difficult to sell,” comments Potel.

“For large corporations these are going to be very expensive projects. We think that the [service costs] for these projects could easily be two to four times the cost of licenses to basically help companies make Discovery Server really work,” he adds.

Alongside Lotus’ push on knowledge management, the vendor is also expecting big things from its e-learning product, Learning Space, which will be bundled with copies of R5. With more businesses embarking on aggressive e-business projects requiring significant business reengineering and education, the market of e-learning tools is set to explode — or so Lotus says. “E-learning could be a great piece of software to add value to the pure transaction,” says Potel. “E-learning isn’t just something for human resources departments… it’s going to be an issue of e-commerce initiatives adding value.”

However, once again if Lotus is going to add value to online transactions, either through collaboration, knowledge management or e-learning it’s going to have to start thinking about markets outside the firewall. “This area is going to be hot. But we see a lot of players emerging into this market and again our concern with Lotus and IBM is are they going to be able execute and make a story outside the firewall,” says Potel.

With Lotus looking increasingly to new market areas, Lotus’ local operation has still to build a business for its collaboration technologies. Another challenge for Lotus locally is whether it can deploy co-existence strategy to build a business for Same Time and Quick Place in sites traditionally locked down by a rival vendor. “Our products have a value outside of traditional messaging… in some accounts we must use a co-existence strategy,” says Mike Dudding. “We’ve already got a lot of success stories in this area,” adds Dudding.

Up until now there has been a low awareness to the Lotus’ co-existence story, with many potential customers assuming that these collaboration technologies needed large investments in either Notes/Domino. “We have to get the co-existence story out there, and show customers that they don’t have to necessarily migrate to take advantage of our collaboration technologies,” says Dudding.

Perhaps judgement on the local office’s capability to execute on the new products and strategy has to wait until the full impact of closer integration with the ‘mothership’ — IBM— is known. At the time of going to press it wasn’t clear whether Lotus would retain their separate office, or channel in the region, nor what shape or form closer integration would take.
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