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Au contraire: Exchange's lead over Notes actually 'getting bigger and bigger,' says Gartner

Demonstrating market momentum is key, apparently, to securing the confidence of CIOs

By Eric Lai
January 15, 2009 12:00 PM ET

Computerworld - While IBM argued today that its Lotus Notes collaboration software was turning the tide against the market leader, Microsoft Corp.'s Exchange, a Gartner Inc. analyst said that's not the case.

"I don't believe that in either revenue or user seat share, that IBM is closing the gap [with Microsoft]," Tom Austin, a Gartner analyst, told Computerworld today. "The gap is getting bigger and bigger."

IBM did not immediately respond to a request for comment.

In a press release put out ahead of its annual Lotusphere user and developer conference next week, IBM said it had 145 million Notes licensees worldwide, up 4% from the 140 million licensees it claimed last year.

Early versions of the press release also included this statement: "While market share estimates vary, Gartner Dataquest's most recent report from 2008 indicates a 40% share worldwide for Lotus Notes, compared to Microsoft's 48% for Exchange, a narrowing gap."

Austin, a Gartner group vice president and research fellow who conducted that research, said the statistic was for 2007 shipments of Notes vs. Exchange only. It is far different than the percentage of people actually using either software today, the installed base.

Based on that measurement, "Microsoft Exchange has at least three times the users of Notes with enterprises with 500 or more users," Austin said. IBM may be adding Notes users, but its share of the installed base "is getting smaller," he said.

Later versions of the IBM press release have that statement and the Gartner statistic deleted.

The battle between Microsoft and IBM over supremacy of the collaboration market remains heated, even though most third-party observers such as Gartner, IDC and Ferris Research say that Exchange has the lead.

Demonstrating market momentum is key, apparently, to securing the confidence of CIOs who spend millions of dollars annually on large e-mail systems for hundreds of thousands of users.

Case in point is IBM's claim of 145 million Notes licenses, which Austin said doesn't correlate with the number of actual active Notes users.

"How many of those licenses were shoved into an order to make the salesman happy?" asked Austin, who added that not just IBM but "Microsoft and everyone else does this."

Austin did agree with IBM's statement indicating migrations from Notes to Exchange have slowed down.

Part of the reason for that was the economic downturn, which has slowed down massive, expensive migration projects such as those involving e-mail and collaboration tools.

Austin also gives Notes 8 credit for the decline in migrations from Notes to Exchange. Launched by IBM in August 2007, Notes 8 features a much-improved user interface.

"Notes 8 has staunched some of the anxiety IBM inflicted on itself when it was pushing Workplace as a Notes replacement, causing its user base to freak," he said. "They can honestly say that Notes 8 today is almost as good as Outlook."

However, Austin thinks IBM won't be able to start winning large companies back until it starts to "carpet-bomb" corporate end users with marketing and free copies of Notes the way Microsoft did when it was building up Outlook in the late 1990s.

"Mere mortals, not IT people, are going to have more and more say, but IBM adamantly refuses to do anything that would piss off IT buyers and senior executives," Austin said.

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