Lotus Gets Back To Its Roots

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"Somewhere along the line we lost touch with our roots." So said IBM Lotus General Manager Mike Rhodin last month when the company acquired Net Integration Technologies (Nitix) as part of an effort to refocus on long-neglected SMB markets and the solution providers that serve them.

IBM, Lotus' parent company, is in the midst of a broad effort to regain momentum in worldwide SMB IT markets that are expected to total $550 billion this year. And it was clear at the recent Lotusphere conference that Lotus will be a critical element of that initiative. "I think we are one of the spearheads," Rhodin said in a post-Lotusphere interview.

At Lotusphere, the company debuted its Foundations line of hardware/software server packages -- leveraging the Nitix products -- that will be sold primarily through the channel to companies with fewer than 500 employees. Plans were outlined to develop a new line of Software-as-a-Service applications called "Bluehouse" that IBM will rely on solution providers to sell to SMBs.

Also announced were new programs and incentives for channel partners, including a 25 percent rebate when selling migration/upgrade services and a $3,000 credit for using IBM's "Sales Connections" Web site to close deals.

"Historically, it's been hard for small companies to take advantage of what IBM [Lotus] has to offer," Rhodin said during his Lotusphere keynote speech. And he acknowledged the importance of the company's channel partners in reaching those SMB customers. All this should be good news to Lotus' 11,000-plus solution provider partners.

"I think it's long overdue," said Bob McCandless, CEO at Alphalogix, a Huntington Beach, Calif., solution provider. "It's about time Lotus got back to the SMB market and really engage there. I'm very on-board with the plan."

But others are skeptical the efforts are enough. "Lotus has been completely washed out of the SMB market," says Ron Herardian, chief systems architect for Global System Services, a Mountain View, Calif., specialist in collaborative applications that works with Lotus products. "Microsoft has been doing this for a decade. Lotus is late to the party."

Target, Microsoft

Microsoft is clearly the target of Lotus' initiative. Foundations is aimed squarely at the Microsoft Small Business Server, for example, and Lotus products such as Notes/Domino and Connections compete head-to-head with Microsoft's Outlook/Exchange and SharePoint.

Lotus executives, during and after Lotusphere, exhibited a fair amount of anti-Microsoft bravado. "I think we've let Microsoft run unfettered in this business for too long," Rhodin said in the interview.

"We believe the time is right to take the fight to Microsoft," echoed Timothy Kounadis, Lotus director of worldwide channel and SMB marketing, also in a post-Lotusphere discussion. At the show Bruce Morse, Lotus vice president of unified communications, said that in 2007, one-third of new customers for the Lotus Sametime unified communications application were Microsoft Exchange users.

Microsoft didn't sit still for all this. During Lotusphere week the company released a new version of its Transporter Suite for Lotus Domino, a set of tools for migrating from Lotus Notes and Domino to Microsoft products. And Microsoft said that a whole ecosystem of Microsoft partners had developed around doing just that.

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