Google takes $200+ Million from Lotus Notes & MSFT
The Web 2.0 / Enterprise 2.0 train is gathering real steam. Last week the Economist ran an article entitled “Consumer technologies are invading corporate computing”. Here’s a quote:
Dave Girouard, the boss of Google’s small but growing enterprise division, says that “tens of thousands” of organisations have already signed up to use Google’s web-based tools in place of traditional in-house e-mail systems and other software.
“Tens of thousands”. Let’s assume that means that 20,000 companies signed up for Google’s web based email. Tens of thousands could be over 30K. In addition to that, a whole bunch of other companies signed up for web based email / collaboration tools from Zimbra and Joyent.
According to a recent article in MacWorld,Lotus Notes ($101) includes tools for instant messaging, presence awareness, RSS and blogging support. Users can group emails into conversations, and access a range of collaboration tools.
Of course, Google and open Internet tools provide all that and more. Joyent let’s you click on a person’s name and be instantly connected to them by a low cost VoIP line.
The Economist describes Arizona State University as an example of an organization that signed up with Google. There, head of IT Adrian Sannier connected 65,000 students. The students could voluntarily move to the new GMail based web system. Apparently they liked the web based email so much that they were moving over at the rate of 300 per hour.
So, let’s do the math:
Assume 20,000 companies switched to Web based email
Assume companies with only an average of 100 people
Assume Lotus Notes / Microsoft costs $101 per end user
20,000 X 100 X $101 = $202 Million
Update: Probably the biggest assumption in there is that the average company size is 100 people. From the outside looking in, it is hard to judge what the right number is for Google’s new service. The 65,000 potential users at Arizona State University indicates that an assumed average of 100 end users is not out of the realm of possibility.
Implications for Microsoft
Microsoft seems to have gotten the message. Windows Live, Office Live, tools such as Windows Live Writer and Excel Services indicate that having provided the dominant operating system for the personal computer, Microsoft is now trying to be relevant in the age of personal web services.
Implications for IBM / Lotus Notes / Domino
There are some further interesting things to note from this 20,000 companies figure. Today, according Ed Brill IBM has only 46,000 companies using Lotus Notes. Ed is “Business Unit Executive, Worldwide Lotus Messaging Sales, IBM Software Group”.
I say “only” because Google Apps for Your Domain started running in Beta in August 2006 and already (based on the assumptions above) they have 43% of IBM’s customer count. That probably doesn’t mean that Google has the same number of seats. In these early days, it is likely that not all those companies are as big as the average company using Lotus Notes. But 46,000 does not seem to be all that much when Google can get 20,000 in a matter of months.
Innovation in your organization
If you are the CEO of a large company, think about the value that has been created in the last two years by consumer tools such as FaceBook, MySpace, YouTube, Google. Think about the fact that that Technorati currently tracks over 63.2 million blogs.
Do you have that kind of dynamic innovation and end-user participation within your organization?
Can your IT department add all of these kinds of tools this quickly? Is your IT department focused keenly on making your company more competitive by constantly giving your people the best new tools? Or are they a bunch of risk adverse bureaucrats who are only interested in “not getting the blame”.
To further quote the Economist article:
For Mr Sannier, however, a bigger reason than money for switching from traditional software to web-based alternatives has to do with the pace and trajectory of technological change. Using the new Google service, for instance, students can share calendars, which they could not easily do before. Soon Google will integrate its online word processor and spreadsheet software into the service, so that students and teachers can share coursework. Eventually, Google may add blogs and wikis—it has bought firms with these technologies. Mr Sannier says it is “absolutely inconceivable” that he and his staff could roll out improvements at this speed in the traditional way—by buying software and installing it on the university’s own computers.
What About Security?
Some people will argue that using Google to power your corporate email is dangerous. Companies currently use FedEx and UPS to deliver their packages and companies like AT&T and Cisco to power their phones. Power comes from the local power company. Banks and Hedge Funds will billions at stake use out-sourced back office solutions such as GlobeOp to track and settle their trades.
Why should IT be any different? Why shouldn’t big companies fire their IT departments and out source the whole thing?
Again from the Economist:
“I have a staff of about 30 people dedicated to security,” says Mr Sannier. “Google has an army; all of their business fails if they are unable to preserve security and privacy.” Google’s Mr Girouard says a similar evolution in trust occurred when people reluctantly accepted that their money was safer in a bank than under a mattress.
But we have so many Existing Applications!?!
The short answer to this is “Existing Applications do not matter when new tools let you rebuild those applications in minutes without even having to code.”
“But we have so many Existing Applications” is the final excuse given by IT when you suggest that it would be a good idea to move from internal systems to web based applications.
The Lotus Notes / Domino sales team talks about “millions of applications” built on their platform. Frankly I do not believe the high count because I spent almost 3 years working for Ernst & Young, which uses Lotus Notes, and I never once saw Lotus Notes used for anything other than email. At Ernst & Young, I also saw that all new development was being done on a Microsoft .Net platform.
The exact count existing applications will quickly be rendered irrelevant. The nature of business applications is going to change radically over the next few years with the advent of personal server tools.
The read / write web is evolving into the read / write / executable web. It will become as easy to assemble applications as it is to build a spreadsheet. Thus, the question will change. Instead of asking about existing applications, business users will start to ask how easy is it for them, as end users, to assemble their own custom applications.
Peter Rip puts it this way about building mash-up applications:
The author/user distinction doesn’t scale. You can’t possibly know what web services I might want to combine nor how. Only I do. I want to program the web. I don’t want you to do it for me any more than I want to go to a site that lists all known queries to search the web.
I couldn’t agree with Peter more. As an end user, I don’t want IT to create spreadsheets for me, and I do not want to have to rely on IT whenever I need a new business application.
As I have said earlier, I work now for a company callTeqlo, which has some powerful new technology focused directly at giving end users the tools to assemble their own applications. Peter Rip is one of our investors. Teqlo is focused on SMBs first. But Teqlo is an integral part of that Web 2.0 / Enterprise 2.0 train.
Rod, you know that I agree with the direction you’re going here, but you gotta be careful with numbers.
First, the assumption of “companies with *only* 100 people” is a bit generous.. in fact I’d risk saying that the majority of the Google Apps for Domain customers are far smaller - think Teqlo:-)
Second, for the same reason, 20K Google customers are certainly nowhere close to being 43% of IBM’s 46K customer base - we’re comparing apples and oranges here, in terms of number of users, which is what really matters.
That said, I’m on that train with you, we’re just all better off staying credible with numbers …
HAPPY NEW YEAR!
Hey Zoli,
Yeah, I agree that the $200M pretty big. It might very well be. And you are right to hone in on the key assumption, which is the average number of users. BTW, I had meant to write average not only.
Considering that the Arizona State University has 65,000 and, I believe I read, the University of San Jose is also a user, maybe an average of 100 is not out of the question.
I’ll write to Google and see if they would be willing to give a lowly blogger an exact number.
I’ll also amend the post to make sure people know it is based on the assumptions I have made.
- Rod
This story was picked up by one of my readers to illustrate the ignorance of the leading online professional media in the UK. In doing so, implied raised an interesting question: Whom are we protecting when we persist in using Notes?
Rod, I’ve found it entertaining the last few months reading your poorly crafted and obviously biased opinion pieces about Lotus Notes. It’s fine though, it is your blog and you are entitled to write whatever opinions you want. However, I don’t like blatant lies. “I spent almost 3 years working for Ernst & Young, which uses Lotus Notes, and I never once saw Lotus Notes used for anything other than email.” Well, I 100% know E&Y does use Lotus Notes for applications, and you’ve even posted your own screen shots of some of them in the past. If E&Y did not use Notes for apps, then you would have not have started your ridiculous “screen scraping migration” bit. I don’t know you personally, but my advice would be to stick to facts when you want to tell a story. If the facts are good enough, they will speak for themselves. Obviously in the case of your dislike for Notes, your facts do not, so you embellish at ever opportunity. I’m happy for you that your rants about Notes landed you a job at the Web 2.0 startup of your dreams, I just hope they are ok with the morals of the type of employee they have just hired.
Alan Lepofsky - IBM Lotus
Clearly E&Y don’t use Lotus Notes apps in the janitor’s department they just email when they need the toilets cleaning.
Alan,
It’s true. While I worked for EY, I never saw Notes used for anything other than email. Just before I left, EY’s knowledge team told me that they had plans to use Lotus Notes to try and do only one fifth of the intranet blogging system I described in both of the white papers included on this site. They had plans, but they never showed me an application.
I worked for the Financial Services Advisory group within EY. FSA had some text only “databases”, but the practice groups I worked in never used them.
A text only page is hardly “an application”. Maybe the Lotus Notes team call a single page of text “an application” just as you those same pages of text a “database”. To me, they are just a page of text that can easily be screen scrapped.
I wrote the screen scraping article precisely because someone told me that it would be “too difficult to pull all the information out of the existing Lotus Notes databases”. Once you dig through all the angry comments that article generated, it turns out that pulling that text only information is even easier than screen scraping.
As Enterprise 2.0 moves forward, you and the rest of the Lotus Notes team are going to have to compete in a heterogeneous IT environment. There will be blogging platforms, wikis, and tools such as Excel Services.
When the Lotus Notes team goes into a place like EY and tells them that Lotus Notes is capable of doing everything, you eventually create situations where people like me are forced to work against Lotus Notes, rather than with Lotus Notes.
Finally, Alan, I was a Lotus Notes end user. When I dared to suggest that there was a way to leave Lotus Notes, or that my experience with Lotus Notes was not positive, or finally that I only saw Lotus Notes being used for email, IBM and the Lotus Notes community resorted to insulting me, and questioning my morals.
In a world where more and more people are blogging, you, IBM and the Lotus Notes community are going to have to deal with more people who complain about your product, or who describe ways in which the product was used that do not meet with your expectations. Positive engagement is the best way to deal with these people, not personal attacks.
- Rod
Rod, sorry but I did not resort to personal attacks when you suggested there was a way to leave Notes. If you recall, I actualy tried to help you with some of your concerns via email. I did question your morals when you knowingly misrepresented E&Ys use of Notes to help further your anti-Notes agenda. If you think I am wrong, fine. I look very forward to the “heterogeneous IT environment”, our cusomers will benefit greatly from this.
“While I worked for EY, I never saw Notes used for anything other than email.”
Really? I can see multiple applications on your workspace in this picture: http://www.innovationcreators.com/images/LotusNotesTheAsbestosofEnterpriseIT_9AC5/image06.png
But it’s a shame you’re no longer there. I’d just direct you to catalog.nsf on any one of your servers to get a list of apps at E&Y. I know there’s a number of them. I worked on some of them nearly a decade ago. Well in advance of Web 2.0.
By the way, your blog still won’t remember my personal info.
Hi Nathan,
I’ll try and fix that “remember personal info” problem.
OK… so let’s look at that image. Perhaps I am wrong. As far as I remember, those boxes link to email or text only pages.
The Taxonomy was a text directory of text pages. The address book was an email address book. The archive on local was my email. I do not know what the Wizard thing was, but I think it was also just a page with some old policies in text.
Lotus Notes databases with only text in them are not what I would call applications. These text only pages were out of date. Further, the people I worked with did not know how to edit the text pages and therefore did not update them.
If you say that (almost a decade ago) you helped EY to build interactive applications on top of Lotus Notes, then I am sure you did. However, that was a while ago. And a firm like EY has high turn over - mainly because people learn so much that they can move on to great jobs outside the firm.
While at EY, I only used a very limited set of internal EY applications. There was a web based learning tool, expenses were done in a stand alone windows client application. It has since been replaced with something built on dot net. Travel was booked through a web site.
I used a desk top application called Notes Medic Pro to help when Notes stalled or crashed.
We could have used a lot of customized applications. It would have been great to have a Basecamp style project management tool. It would have been great to have blogging and wiki tools, sales tracking and relationship management tools like SalesForce and social networking integration like Outlook provides for LinkedIn. We did not have anything like any of those tools on Lotus Notes or otherwise.
- Rod
“I do not know what the Wizard thing was, but I think it was also just a page with some old policies in text.”
“We did not have anything like any of those tools on Lotus Notes or otherwise.”
If you didn’t even know what one of the custom systems (I’ll refrain from calling it an application, since you’re quite right that a simple repository of text is not an application. Then again, that’s what a wiki is, isn’t it?) was for, how can you make the assertion that E&Y didn’t have project management tools built on Notes? Clearly you are not familiar with the extent of the platform’s use in the company, if you didn’t even know what the Wizard system was for.
That’s not an indictment. You yourself say “While at EY, I only used a very limited set of internal EY applications.” That would suggest that you are not familiar with the entirety of the applications in use in a fairly large organization. So how is it that you’re in a position to speak on E&Y’s use of the Notes/Domino platform? I just don’t get it.
Nathan, it looks like Rod was in a small group at E&Y and didn’t make as much use of Notes. James Dellow explains a bit more in his blog:
http://chieftech.blogspot.com/2007/01/my-experience-of-lotus-notes-at-ernst.html
You mention Google “has an army” of people working on security. That might be true. And perhaps Google can protect all of its users from the rest of the world.
But who protects Google users from Google? After all, we have to pay for the soup Google dishes without charge. That cost is our information.
What Google does with that information should give us pause to think about handing everything over to them or others offering free/cheap web-based services.
“I’m happy for you that your rants about Notes landed you a job at the Web 2.0 startup of your dreams, I just hope they are ok with the morals of the type of employee they have just hired.”
I hired Rod not because of any rants but because he wasn’t reluctant to consider alternatives that not only offer the potential for ROI but also a better user experience. Insofar as morals are concerned, I’m more than comfortable with Rod’s.
To all the IBM’ers on the line here, tell me this, do you flame all Rods equally? In other words, do you lash out at Rod Smith when he suggests QEDWiki could be a better solution for a problem than Notes? Granted, he’s pretty saavy and not likely say those words verbatim but we all know what he means…
Jeff, if you can find someplace where Rod Smith suggested that QEDWiki is a better solution for a problem than Notes, then absolutely I would reach out to Rod Smith about it. QEDWiki is just one of many capability projects at IBM, some of which get productized and some don’t. FWIW DominoWiki is a wiki-based application that runs atop the Domino server (server component of Notes), so the capabilities are there in the Notes technology base.
The problem with the kind of postings we’ve seen from Mr. Boothby is that he apparently has very little experience with Lotus Notes applications, yet feels himself qualified to criticize Notes time and time again.
In this particular thread, Rod admits that he has never seen nor used a real Notes application. Yet for three months, he has posted numerous times about how easy it would be to migrate Notes applications to something else, how it is the “asbestos of the IT world”, how IBM is on the wrong track by updating Notes to run on Eclipse. He wondered why the attacks were so personal, yet this new information makes it much more understandable. Rod took his own personal experience as an end-user of Notes in one part of one organization (which we’ve learned through James Dellow was the part of that organization that used Notes the least) and projected it on the entire market, using highly inflammatory words and graphics (such as the train atop this posting). I’m sure you’d agree that this is a bit of an intellectual stretch.
Who certifies someone as qualified to criticize Notes? Just curious because according to your logic one has to be experienced in some IBM approved, or maybe just Ed Brill approved way.
If Rod’s lack of qualification is so obvious, then why do you care what he writes? Surely those individuals who understand the market and make the decisions about Notes implementations will also see through Rod’s supposed lack of qualifications and appropriately discount the posts, would you not agree? If this be the case, then why devote such considerable energy to attacking him for writing about it?
Whatever the underlying facts in this debate are, the fact that a small group of IBM employees has taken it upon themselves to launch into Rod with such vitriol reflects poorly on IBM’s brand, and that you are running point reflects poorly on you personally and professionally. Just let it go, any victory you believe can be had in this will be Pyrrhic at best.
Ed, I know you are very good at what you do but even you can admit that there will be leakage from Notes, whether it be actual conversions or opportunities not making the pipeline. My advice to you, unsolicited, would be to leave open the possibility that these things Rod writes about may be of value to you in the future. Insofar as Rod Smith is concerned, he’s not out there talking to hundreds of CIOs about using Notes AND qedwiki, that much is certain. If you believe that qedwiki and Notes are the perfect companions for one another then you need to start hammering that message out because in no way is that my impression.
PS- The SL and IBM post you wrote recently was really interesting. I’m still trying to sort out SL but as I commented to someone else recently, with a young child in my house I have little time left over from First Life to entertain a Second.
I could not agree more. Google Documents and Spreadsheets has all the characterisitics of a disruptive technology.
* Much lower cost - free v.s $100’s of dollars
* Less functionality in the traditional sense… BUT more functionality in ways that are important for a small but growing and important market segment - the collaboration and web-centric features will be the future of how we use documents and communicate
I am currently using Google Spreadsheets and Docs for a bunch of things, including tracking gifts and thank you notes for my wedding with my fiance. While Google spreadsheets does not do everything Excel does (pivot tables, charts), it does “enough” (to be dangerous), and the collaboration functionality is very cool and more importantly… quite USEFUL.
http://mikevolpe.blogspot.com/2007/01/disruption-is-beginning.html
There needs to be a clear distinction drawn between SaaS applictions like Google Apps for Domains and rolling your own applications. They are not the same thing. And each user rolling their own application almost runs contrary to the SaaS-approach, which is built upon the idea of collaboration and multiple users using the same application making it easy to share data between users.
There needs to be a clear distinction drawn between SaaS applictions like Google Apps for Domains and rolling your own applications. They are not the same thing. And each user rolling their own application almost runs contrary to the SaaS-approach, which is built upon the idea of collaboration and multiple users using the same application making it easy to share data between users.
There needs to be a clear distinction drawn between SaaS applictions like Google Apps for Domains and rolling your own applications. They are not the same thing. And each user rolling their own application almost runs contrary to the SaaS-approach, which is built upon the idea of collaboration and multiple users using the same application making it easy to share data between users.
Hi Jeff. Nice to “virtually” speak with you. I am sorry you feel that I have unjustly attacked Rod, or was unbalanced in my judgement. That was not my intent. Actually, I think I’ve been quite civil for the most part during the months of Rod’s Notes bashing, when as he himself points out now, he hardly uses the product. I’ve even had emails with Rod offering help. As I pointed out, opinions are great, everyone has one, and this is Rod’s blog so he is entitled to offer up his own. However, misrepresenting the use of Lotus Notes at E&Y was an area I was not willing to let go. Were my comments too harsh, I guess you and Rod think so, so I will offer my apology. I’ve never met either of you, so it is not personal. As Ed pointed out, yes we are critical of people equally. I’ve had many “discussions” inside IBM with people when they are biased to one solution over another. My job is to look at the big picture, and that includes products from not just Lotus, not just IBM, but also our “competitors”. You mention reflecting poorly on one’s brand… rather than trying to put the nail in the coffin for Notes time and time again without merit or substance, don’t you think it would have been a good idea for Telqo to embrace Notes 8 and provide yourself a huge customer based with whom to work with?
My trackback is misbehaving,
so herewith a link…
http://theotherthomasotter.wordpress.com/2007/01/08/passion-and-the-enterprise/
Ho Rod, I wonder how your speculation with regard to the impact of Web 2.0 technology (and Google in particular) reconciles with the 30% increase in revenue for last year that the Lotus Software Division of IBM recently announced.
Given that the majority of Lotus’s revenue stream is derived from the Lotus Notes platform, perhaps there might be a small flaw in your assumptions.
I personally use Lotus Notes as well as Google and Microsoft and a number of other collaboration tools, so perhaps your assumption that so many organizations are swapping one vendor for another is not strictly valid.
A text only page is hardly “an application”. Maybe the Lotus Notes team call a single page of text “an application”
Rod, IMO this quote does not reflect you in a good light. This shows a complete lack of understanding of the Notes platform and it’s capabilities. It also finds you making a fairly petty retort to what was said before. Of course the Lotus Notes team don’t call a single page of text an application; nobody who has any idea of what the Domino platform is capable of would!
The fact that you only experienced such minor use of Notes’ capabilities should not reflect badly on the product, just how that particular organisation made use of it.
Web 2.0 applications similar to those you are writing about on this blog can all be created using the domino platform. There is no need to even use the Notes Client you appear to detest so badly, if you don’t want to. Domino Web Access (formerly iNotes) makes it possible to use your mail file from the browser, and all applications can be built to have a web side to them.
Domino gives you the option to create applications for web only, web and notes client, or client only. Plus integration with other technologies is also possible through XML, web services, LotusScript agents, etc. These facts don’t come across in your posts which appear to focus entirely on putting down the Notes Client; and I think it’s probably this that annoyed the Notes community so much.
I don’t think anybody wants to get into a petty squabble, just introduce you more to what Notes and Domino can do so as to allow for a more balanced and fairer comparison with the products you are discussing.
(You also mention Joyent allowing you to click on a person to start a voip call - I believe this can be done in Lotus Sametime 7.5 too, straight from the Notes client).
Hi all,
I need list of companies using Lotus notes…Can any one help me to lead it…..
Regards,
Karthik
Firstly why are nearly all companies using lotus notes still on version 6.5 or below? Is it because they are just waiting to switch to Outlook sometime soon? How many companies are on Outlook 2000?
Secondly I used to work at two companies that used lotus notes and am yet to speak to anyone there that did not HATE lotus notes. The first scrapped Notes in 2000, the second still uses it. The general comments I get from Notes users are “It looks like it was invented as a uni project that wasn’t finished”; “The calendar interface is terrible you cant simply click and adjust meetings like in Outlook”; “it did not process a meeting invite from another company using outlook ‘(so if someone changes the time/date of a meeting, you click accept update - and lotus notes deletes that update email and does nothing to your calendar….making it pretty embarrassing turning up at the wrong time!!! This is pretty important when most companies use Outlook)’”. “Why oh why do you need to replicate to get emails???!!! Outlook does the same job and does not make it as painful as Notes!!!”
Now we all know there are nearly always problems with software - but I don’t hear the same kind of moans with Outlook.
Also I’ve seen quite a few companies using the .nsf databases for intranet and content management - and to be fair it gives a terrible user experience! Maybe its the companies setting it up - but considering i’m yet to see one setup well…..says something about the product!
Simply said - Lotus notes and Sametime 6.5 - It looks and feels out-dated!