The Boss loves Microsoft: Where does that leave Lotus? 2003

Ed BrillSenior Manager, MarketingManager - Lotus Competitive Project Office

STR114

A lot of ground to cover since Lotusphere 2002

Lotus ships pacesetting wave of major releases to rave reviewsMicrosoft updates strategiesEconomic conditions driving marketplace

System consolidationTotal cost of ownershipUser productivity

Lotus's market position has never been better!

Why are you here?

Current Lotus customer, looking for answers to "why" questionsMixed environment looking for reasons to standardize on Lotus softwareMicrosoft Exchange customer who wants to switch platformsFan of "Celebrity Deathmatch"tm

You are employed by a company based in Redmond, Washington, yet mysteriously have no company name on your Lotusphere 2003 badge

What is Microsoft telling your boss?

"Microsoft (Exchange/Outlook) - #1 in new users for Integrated Collaborative Environments" MS advertisement, eWeek, 21 October 2002

"'Customers could be moving their Lotus applications to WebSphere or DB2,' said Earnie Glazener, product manager with Microsoft's Exchange group. 'It's going to be a big change anyway, so we say, Doesn't it make more sense to change to .Net instead?'" Infoworld, "Lotus gears up for Notes/Domino 6 launch", September 27, 2002

"'Our strategy is an upgrade path, and IBM's is a rip-and-- replace,' says Jim Bernardo, product manager for the .Net enterprise server group at Microsoft." Network World, "IBM, Microsoft shift battle lines", September 30, 2002

(Paraphrased) The upgrade to Notes/Domino 6 is so expensive and complicated, why not move to Exchange instead?

So then let's start with the traditional battle...Domino vs. Exchange

Excellent progress in 2002Ship of Domino 6iNotes Web Access: huge year-to-year growthMove2Lotus programs with IBM ^ and Sun MicrosystemsAdoption rate of Exchange 2000 still <20%

Source: InternetNews.com, "Lotus Domino - Should You Upgrade or Migrate, Now or Later?",

October 25, 2002

Analysts concurGartner messaging Magic Quadrant: places IBM/Lotus as "leaders",

ahead of Microsoft on both "completeness of vision" and "ability to execute"*

IDC rates Lotus highest on ability to gain market share (IDC ICE market update, July 2002)

Customers agreeDozens of additional Move2Lotus successes

*Magic Quadrant for Messaging Servers, 2002 ; 7 October 2002 by Joyce Graff , Maurene Grey and Simon Hayward. The Magic Quadrant is copyrighted in October 2002 by Gartner, Inc. and is reused with permissiowhich permission should not be deemed to be an endorsement of any company or product depicted in the quadrant. The Magic Quadrant is Gartner, Inc.’s opinion and is an analytical representation of a marketplace aand for a specific time period. It measures vendors against Gartner defined criteria for a marketplace. The positioning of vendors within a Magic Quadrant is based on the complex interplay of many factors. Gartner donot advise enterprises to select only those firms in the “Leaders” quadrant. In some situations, firms in the Visionary, Challenger, or Niche Player quadrants may be the right matches for an enterprise's requirements. Well-informed vendor selection decisions should rely on more than a Magic Quadrant. Gartner research is intended to be one of many information sources including other published information and direct analyst interaction. Gartner, Inc. expressly disclaims all warranties, express or implied, of fitness of this research for a particular purpose.

IBM49.0%Microsoft

39.4%

5.4%Novell

6.2%

OtherSource: IDC,July 2002

Market share - Integrated Collaborative Environments, 2001

Gartner,January 2002:

"Lotus Notes-Domino is still very much alive, and

still leads in the groupware market."

Enterprise Strength

Unsurpassed ReliabilityAvailability/ScalabiltyConsistent Architecture

Unmatched Security

No successful virus attacksFull path encryption capabilitiesLocal data protection

Customer FlexibilityEight server platformsRich clients or browsersBest-in-class mobilityCustomizable

True CollaborationRapid development & deploymentOpen & "integrat-able"Evolving with the market

Domino key differentiators Outpacing the competition with Domino 6

New administration and management features extend Domino's lead:

Centralized directory optionServer-based rules and RBLs to control spamStreaming replication/network compressionSmart UpgradeFull parity web-administrationPolicy-based managementServer fault recoveryMulti-lingual serversOptional Tivoli Analyzer autonomic system management and repair

Domino 6 addresses key market requirementsPassword managementRoaming user supportSingle copy templateFront-end/back-end configuration

ReliabilityClustering requires shared disk, no "hot site" config.Clustering model recommends <1500 users per server or active/passive configuration

No individual mailbox backup and recoveryNo remote web administration (requires ESM access)

ScalabilityShared data store is a single point of failure - "Achilles heel" (MEC 2002)

Limited by Exchange architecture -- MS HQ deployment only 3000 users per server

SecurityPKI requires two additional servers; few usersAPI open to "Outlook Transmitted Diseases"No concept of an execution control list20+ security bulletins for Exchange 2000

Mobility20-80% more bandwidth requiredDoesn't do true replicationNo offline browser supportPST files "cost you valuable employee productivity and can put you at increased legal risk" (MSD2D)

ApplicationsNo dedicated tools for appsDistributed public folders difficult to syncNo deployment modelWrite separate for web and Outlook

Exchange 2000 Considerations Comments on Exchange 2000"Question: Why is a Microsoft Exchange manager like a voodoo doll? Answer: Somebody is always needling him about a problem." (SearchWin2000, "Top 10 Exchange Management Headaches", March 2002)

"Exchange 2000 is so tightly integrated with Active Directory (AD) that you can't simply copy Exchange directories from the old server to the new server as you can in Exchange 5.5. The best way to approach...retrofitting an Exchange 2000 server is as a disaster-recovery operation." (Exchange & Outlook Update newsletter, July 2002)

"Over the years, few disaster recovery situations have given me as many problems as recovering an Exchange Server."(Brian Posey, MSD2D newsletter, December 2002)

"For three months, the office had been using Exchange for its e-mail server. The kicker is that more downtime occurred in those three months than it did during the five years Lotus Notes was used, an IT manager there said." (SearchWindowsManagability, "Top 10 Security Headaches", February 2002)

Network World 11/99: "Microsoft says it finally has the platform to support collaborative and knowledge management applications on Exchange. "PC Magazine 09/2000: "Taking aim at the collaboration and Internet features in Domino and Notes, Exchange 2000 includes significant enhancements in these areas. Most notable is the new Web Storage System, which lets developers build complex workflow applications that integrate a rich variety of Internet standard and Microsoft components."

WebStorageSystem

Collaborative apps/ public

folders

Workflow

IM/ e-meetings

Hostedmail &collab

e-mail/ calendar

Microsoft Exchange 2000 as first announced

E2K

Gartner, September 2002:"Microsoft has recognized that its ambitions for Exchange as a comprehensive platform for collaboration are a hindrance, rather than a strength."META, October 2002:"The notion that this is a collaboration and groupware platform has gone by the wayside."

e-mail/ calendar

Microsoft Exchange 2003

Remember, "Titanium" was not even announced as of a year agoThe expected 2003 deliverable was "Kodiak", based on a SQL architecture (MEC2001, Paul Flessner keynote)How has MS three-year licensing renewal term affectedtheir product plans?

Microsoft Exchange 2003

!

Other comments on Exchange 2003"The idea with Titanium is to address the issues our customers have with the current code base." Jim Bernardo, Microsoft ("Microsoft maps Exchange's future", IDG News Service, July 2002)

"We haven't found a single customer who wants to run Exchange 2000 with Windows .net." Gary Tugwell, Microsoft

("Microsoft admits Exchange users face delays with Windows .net ", CW360, July 26, 2002)

" 'Titanium doesn't offer anything that Domino doesn't already have,' said Steve Bryant, an infrastructure architect at Fayetteville, Ga.-based Pro Exchange, whose bread and butter happens to be migrating Domino shops to Exchange." ("Domino: Should I stay or should I go?", SearchDomino, December 2002)

"Microsoft appears to be herding customers to its most recent product releases, an action that seems to be designed to keep Microsoft revenues growing." (Exchange & Outlook Administrator newsletter, July 2002)

Ferris Research: "Don't bother migrating from Notes/Domino to Exchange"

"Microsoft's recent disclosures about the next version of Exchange... and the next version of SharePoint Portal Server remove any incentive for Lotus Notes/Domino customers to migrate to Exchange."

"[W]hy would any Notes/Domino shop migrate away from their current platform? They have a complete collaborative environment in a single server..."

"[A]t this point, there seems little point in migrating from Notes/Domino to Exchange."

Move2Lotus successful migrations from Exchange to Domino

Significant interest from Exchange customersEnd of support for Exchange 5.5 coming December, 2003 (source:

Microsoft website)No direct migration from Exchange 5.5 to "Titanium" supported

(source: Exchange & Outlook Update)Exchange 2000 will not run on Windows.NET server

(source: ZDNet UK, October 2002)Ferris Research indicates upgrade to Exchange 2000 averages

US$400 per userWondering about cost/benefit of future upgrades

("Titanium"/"Kodiak")

Channel programs offer comprehensive solutionsm ^ and Sun Microsystems both have Move2Lotus

offeringsOver 500 Move2Lotus business partnersOngoing organizational focus for Lotus

Swedish Defense Forces:SecurityRange of functionalityEase of useEase of maintenanceCollaborative capability and expertise

Plante Moran:

Customer reasons for moving to Lotus

"Lotus Notes was chose over Exchange because of several factors. Rapid application development was a key, because we wanted the financial reporting system to go live the same day the new mail system went live....We needed a solution today, not next year." Brady estimates that going with a Notes solution saved them over 40% in terms of sheer development hours" -- Doug Brady, Partner

More customer reasons for moving to Lotus

Tata Tele Services (moved from Exchange)Scalability, reliabilitySecurityReplication to support a distributed architectureChoice of operating systems

Kaiser Permanente (consolidating four+ systems to Domino)Choice of server operating systems, reliability/scalabilityMaturity of Domino product lineClear, less risky product migration approach with fewer

dependencies than ExchangeSuperior security and support for mobile and roaming users

Over 200 Move2Lotus successes so far; more in progress!

ITALY

GREECE

AUSTRIA

FRANCE

SPAIN

PORTUGAL

GERMANY

SWITZERLAND

BELGIUM

UNITEDKINGDOM

IRELAND

SWEDENFINLAND

DENMARK

LUXEMBOURG

HOLLAND

The strategy works...My Personal 2002 Domino vs. Exchange Scorecard

20 - 3 - 3

Won

Loss

Still in process

SearchDomino webcast: over

800 registered

participants

Summarizing Domino vs. Exchange for the boss

Lotus Domino continues to be #1Lotus Domino continues to be the best-in-class technologyTotal cost of ownership is the key metric, not "free"Microsoft's zig-zagging collaboration strategy does not offer advantages to Notes/Domino customersBased on current information, several rip-and-replace migrations will be required to follow Microsoft into the future

What a difference a year makes -- Notes vs. Outlook

Many migration discussions still begin at the clientbut the boss is much happier now!

Notes 6 has shipped with dramatic usability, compatibility, and productivity improvements

"If you work for a company that already relies on Notes--or one that's thinking of switching--run, don't walk to your IT staff to tell them about Notes 6.0.... Its group-scheduling skills handily beat Microsoft's" CNET, December 2002(88% favorable user recommendations)

Open source community offers exciting add-in Notes capabilitiesMicrosoft moves affected the discussion

Shipped their own Outlook to Notes connector in December, 2002Honest assessment of current Outlook product

OpenNTF.Org's Notes 6 mail template

BoF:511: Tuesday 6:15 PM

Honest assessment of Outlook today (MS Exchange Conference, session TBR200)

"Outlook's current client/server model assumes perfect networks""Online mode is chatty and fragile""Top goals: .... Fewer hiccups and spurious error messages"

Imitation is the sincerest form of flatteryOutlook to Notes connector

"Microsoft's move validates the option of running Outlook as a client for Domino" -- Gartner, "Microsoft Supports IBM Lotus Domino With Outlook", December 26, 2002

"Outlook 2002 can't replicate the functionality of Lotus Notes" -- Simon Marks, MS Office product manager (Source: InternetWeek, "Microsoft debuts Outlook 2002 plug-in for Domino server", December 22, 2002)

Outlook 11 planned features (MEC TBR 200)Cached modeRPC over HTTP, network compressionBigger local file support

Microsoft's contribution to the Notes/Outlook discussion This just in....

Microsoft TechNet tip of the week (V5#1), January 7, 2003:"As you know, the .pst file that Outlook uses for storage on the local PC has a 2GB limit. The same limit applies to offline folder stores (.ost files). When the file exceeds that size, you can no longer use it in Outlook.""You can recover at least some of the data by using the PST2GB tool provided by Microsoft Product Support Services (PSS).... to remove part of the file. The utility deletes several megabytes of data, and the deleted data isn't recoverable, but you can usually restore the remaining data. ""To help prevent this problem, Microsoft Office 2000 Service Release 1/1a (SR1/1a) updates Outlook 2000 so that you receive a warning message when a .pst or .ost file is approaching 2GB."

Summarizing Notes vs. Outlook for the boss

Notes 6 meets our user productivity requirementsOur users are capable of using business productivity tools that are different than what they use at homeOutlook is usable in a Lotus Domino environment -- even MS supports thisOutlook has some weaknesses compared to Notes today, and MS is trying to catch up in the future TCO is an important factor in this discussion; not just license costs, but also user productivity

See STR110: "Selling Notes/Domino 6 Internally" for more

Lotus vs. MS in real-time collaboration

At bat: Exchange 2000 Conferencing ServerSingle digit market share (IDC, July 2002)Fixed function chat (no presence/embedding)Requires Windows 2000/Exchange 2000; IP multicasting onlySP3 in 2Q03, maintenance mode planned afterwards

On deck: "Greenwich"Scheduled ship Q2/Q3 2003Requires Windows.NET 2003 server and new Messenger 5.0 clientDesign focus is IM and ad-hoc meetings, not scheduled or broadcast

multi-party meetingsPricing/packaging still to be announced; analysts caution against

making any assumptions

Lotus Sametime key benefits

Offers three core collaborative functions:AwarenessConversationWeb Conferencing

Multiple device supportPerson to process communication (bots)APIs and embeddable presenceAvailable on premise or on-demandOsterman Research, September 2002:

#1 in market73% of enterprise standardization decisions

Sametime can even integrate with Microsoft Office and Outlook

Combine awareness within Microsoft's Outlook.

See another person's presence & chat from the in-box, contacts area and calendar.

Coming: Buddies for Microsoft Word and Excel

www.instant-tech.com (Beacon award winner: Rising Star)

Microsoft SharePoint family

Microsoft SharePoint Team ServicesBasic team collaboration in Office XP ProfessionalFeatures are competitive with Notes document library templateFor scalability, requires SQL ServerSince functionality is so limited, the boss should be wary of

considering SPTS as a competitor to solutions like Lotus Quickplace

Microsoft SharePoint Portal ServerBasic document management, searchLimited scalability, availability servicesVersion 2.0 being rewritten on SQL Server 2000 (moving away from

Exchange store)Today, not a viable competitor to Websphere Portal line

Gartner: "IBM Lotus Software has over 15 years of experience in the team collaboration support market. It remains one of the leading vendors in the team collaboration support market, with a proven track record, mature product offerings and large installed base."

News on the Microsoft® integration front

Reminders:Office and Notes are working together on Windows desktop at the

vast majority of Notes customersTwo best practices sessions on Notes/Office integration

Windows remains the most prevalent server platformMicrosoft is showing Windows.NET Server in the Lotusphere

product showcaseDomino 6 integrates with Active Directory and single sign-on

New thoughts:Outlook Connector for DominoBP solutions around .NET integration (see BP113)Interested in your feedback throughout LS on what else would help

with your environment

Putting next gen in context for the boss

#1 point -- Customer controlLotus's future is customer-controlled migration, not "rip and replace"As Jeanette Horan outlined, you will decide how to leverage Lotus's

current and future technologies

Bringing Lotus collaboration into the mainstreamOpen application framework for the futureIntegration and bridge technology to leverage Domino investmentNew offerings to address the entirety of your messaging needsMust see the next gen RAD tool (session AD308)

Web services and contextual collaboration are where it's at$1 billion investment over the next three years

So, let's look at the overall story

Lotus delivers best in class collaborative solutions todayLotus's next gen roadmap offers open flexibility with the right tools and capabilities for contextual collaboration

"Microsoft has burdened its users with the challenge of living through several years of less-than-mature implementation of its software infrastructure." -- Gartner, March 2002

"Microsoft has no clear leadership or vision when it comes to architecting a comprehensive collaboration strategy or environment." -- Giga, October 2002

"IBM is much further ahead in that they have articulated the vision and are building products" -- Matt Cain, META, quoted in Network World, September 2002

Resources to help you!

ON www.lotus.com/compareDomino vs. Exchange PDFFerris TCO report on Notes/Domino 6Ferris "Don't bother migrating to Exchange"Webcasts on why and how to Move2LotusPerspectives on specific competitive topics, such as

Data storageScalabilityDesktop client capabilities

ON searchdomino.techtarget.comSpecial report Exchange vs. Domino

Your Lotus/IBM team have access to additional resources, including the Move2Lotus team (see them here at LS03, too!)

Other sessions of interest

Monday, 5 PM STR108: Messaging Solutions and the Future of Notes/Domino

Dolphin N Hemi D/E

Monday 5 PM BP105: The integrated desktop, creating peaceful coexistence between Notes and MS Office

Swan Osprey

Tuesday, 10:30 AM

ID109: Out-integrating Microsoft software

Y&B Grand Harbor V-VIII

Tuesday, 12:15 PM

STR110: Selling Notes/Domino 6 internally

Dolphin S Hemi I&II

Tuesday, 12:15 PM

STR111: Driving down the cost of your Domino infrastructure/TCO

Swan Ballroom 1-4

Wednesday, 8:30 AM

BP113: Best practices for integrating Domino into .NET

Swan Mockingbird

Wednesday, 8:30 AM

ID104: Migrating from Microsoft Exchange

Y&B Grand Harbor South

Still more sessions of interest

Wednesday, 12:15 PM ID303: Increasing productivity with Lotus Notes 6

Dolphin S Hemi I&II

Wednesday, 2:30 PM BP115: Coming together: Advanced integration of Notes 6 and Microsoft Office

Swan Osprey

Wednesday, 4:30 PM BP109: Bringing it all together, the sequel

Swan 5/6

Thursday, 10:30 AM BP202: Winning against the competition in Advanced Collaboration

Swan Pelican

Tuesday, 6:15 PM BOF: OpenNTF Y&B Saybrook

Thank you!

Contact me at:ed_brill@us.ibm.com

Visit my Lotus.com weblogwww.lotus.com/weblog