One week after IBM claimed Microsoft Small Business Server partners are flocking to Lotus solutions, Microsoft is counter punching. In an email to The VAR Guy, Microsoft defends its small business channel momentum and points out some alleged weaknesses in IBM’s small business efforts.
According to the email from Microsoft:
- IBM is entering a market where Microsoft is established and continues to invest — currently Microsoft is investing $6.5B in SMB market each year.
- Microsoft partners were front and center when Microsoft built the Small Business Server 2008. By the end of this fiscal year, we plan to train more than 25,000 partners through events and online tools–as of the November 2008 launch, more than 7,000 have been trained.
- According to IDC in their annual market share analysis of collaborative environments (i.e. messaging and collaboration), Microsoft market share has grown 5.6% from 2003 to 2007 to 52. During the same period, IBM market share has declined 5% to 37.7%.
- Microsoft growth has outperformed the market growth in all but 1 of the years IDC tracked, while IBM has underperformed the market growth in all but 1 of the years tracked. (IDC, Worldwide Collaborative Applications 2007 Vendor Shares: A Look at Revenue by Submarket, Mark Levitt, June 2008)
- UPDATE, June 29, 2009: Some new stats are in from IDC, and the research firm has requested that readers disregard the now antiquated IDC stats from above. According to the latest IDC report, in 2008 Microsoft had 28% of the revenue market share of collaborative applications worldwide. IDC said Microsoft’s revenue grew by 14.9% between 2008 and 2007. The data is based on the following report: Worldwide Collaborative Applications 2008 Vendor Shares: A Look at Revenue by Submarket, IDC, Mark Levitt, Robert P. Mahowald and Caroline Dangson, May 2009
The VAR Guy must concede: He hasn’t double-checked the IDC figures, which Microsoft supplied. But our resident blogger was pleased to see Microsoft engaging in the debate with IBM.
Big Blue triggered this debate last week, when the IBM claimed channel partners faced “waning demand for Microsoft products.”
It took Microsoft a few days to organize a response to IBM. But Microsoft’s reply was on-message. And channel partners can only benefit from the back-and-forth between Microsoft and IBM.
If you sense The VAR Guy is enjoying the debate, you’re correct.
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Is it just me, or is it odd that IBM claims that Lotus Foundations is attracting hundreds of partners per month, and Microsoft counters with 2 year old data? Lotus Foundations was only created in 2008, so what’s the point of providing 2007 data?
Lotus Foundations is IBM’s buy out of Nitix. It’s been around.
But Microsoft is providing non-Nitix data.
We have broken MS FUD in the past as well. Just search around on the blogosphere.
Ed: In Microsoft’s defense, it looks like IDC publishes data each June… so the latest data Microsoft offered was June 2008 based on 2007 figures.
Susan: Good point.
Bilal: Is everything Microsoft says FUD? The VAR Guy does take issue with many Microsoft claims — especially all those initially glowing sales claims about Windows Vista. But our resident blogger believes VARs (for the most part) remain loyal to Microsoft Small Business Server.
My own take on this is that IBM may well be getting a flock of business partners to Lotus Foundations but that those business partners will continue to quote MS solutions in addition to Lotus Foundations and we won’t know for a while whether Lotus Foundations is going to become a real thorn in the side of the MS SMB market.
It certainly has a lot going for it from what I have seen and (in the interest of full disclosure) my company has recently become a business partner.
Common-Lotus? Give me a break, you can gather all the partners you want but it doesn’t put installs in. Microsoft might want to worry but it’s not about Lotus but cloud options like Google Apps or open source options. Now consider the growth of the very small and independent co-working trends where they won’t be using much MS at all. So I go become a lotus partner today…I have no plans what so ever to get it installed and come to think of it, I’ve not had a client ask about it for years. Years! If users don’t remember it let alone want it then why should we care?
Rob@5: The VAR Guy generally agrees with your perspective. This isn’t a “Winner Take All” market. VARs that embrace IBM Lotus options aren’t necessarily fully abandoning Microsoft options.
JohnnyHeavens@6: Yes, yes, yes — you’re on the money regarding Microsoft’s larger cloud, Google Apps and Open Source concerns.
-TVG
Hi Everyone
Thanks to my Google Alerts I was able to see this discussion. I agree Microsoft’s biggest competitor is not Lotus or IBM, these dinosaurs have been around forever. Every WPC we here about IBM and so far nothing major. I haven’t even heard of this IBM solution until today, none of my clients are asking for it, nor in our HTG peer group are discussions forming.
Microsoft needs to focus on their partners and the offering, be aware of the competition out there and do what we are trained to do, focus on their strengths, not the weaknesses and be a positive force in the marketplace.
My business is a Microsoft Small Business Parnter, argue the fact of OpenSource and other technologies, our clients continue to invest in Microsoft solutions because of our Trusted IT Advisor stand and not a bunch of techies chasing after the Technie equivalent to the Sales Shiny light.
Stuart Crawford
Calgary, Canada
http://stuart.calgarybloggers.ca
Var Guy
The power of social media is amazing. The fact that Microsoft is responding to claims by IBM that resellers are “flocking” to their new Lotus Foundation product suite just validates that the power of social media is real and even major corporations feel the need to respond. But that is about where the reality ends in this debate.
I have the privilege of working with hundreds of VAR’s in the channel through the HTG peer group program. All over North America, and around the world, and I gotta say – there is no debate about Foundations vs SBS. Sure partners are always complaining about the Microsoft licensing scheme and some of the quirks associated with SBS migrations etc. But I have not heard of one partner who has actually implemented Foundations for a customer. Have they signed up as business partners – sure they have – just like they signed up for Microsoft’s SBSC program over the years. Partners like to sign up for stuff, but that does not translate to action at all. Even among Microsoft partners, most don’t do much business. I know a few years ago a partner who signed his dog up as a reseller at Microsoft just to prove the point that it means nothing.
So the real question is – what is selling? Well it is all pretty slow in the SMB space. What are partners really installing for customers? While SBS is a pretty bland and boring solution – old dependable news – partners know it works. That is where they actually trust their customers businesses to. I don’t see them even considering actually using any other solution in the real world. They may talk about it, but it isn’t really happening. Maybe I live in a cave, but SBS owns this segment of the market from all accounts I see every day. Is there room for another solution – of course – but it will be some time before SBS is unseated as the product of choice in the 5-50 segment. It just works, and partners know it and trust it. So while there may be lots of talk about other solutions, at the end of the day the one that is being installed is SBS. That is the real measure of success – not what is floating in the social media sites or in backroom discussion – what is actually running SMB businesses today. Microsoft still owns the space and will for some time to come. The new version of SBS is fantastic and is the product we choose to implement for our SMB clients.
Arlin Sorensen
CEO – Heartland Technology Solutions
Arlin: You raise some great points. Among the best: Sometimes “boring” and “it just works” are exactly what channel partners want.
Stuart: The VAR Guy was waiting for the voice of Canada’s small business VARs to weigh in. Good to have your two cents on the site, as always.
Speaking as another Canadian VAR, I would agree with the points made by both Stuart and Arlin and that in our SMB client base, ZERO are asking for any server solutions other than Microsoft solutions. There are a lot of alternatives being discussed in education and health, but not SMB. And, even there, most have migrated some of their solutions away from Unix/Linux based to Microsoft based.
It’s interesting that many people like to see Microsoft as that “big bad company” and so they impute bad motives to everything MS says and does. What’s even more interesting (for someone who’s been around as long as me), is that this was exactly what used to be said about IBM. Big company – big target. But step aside and let a healthy dose of reality pervail … Microsoft makes solutions that small businesses buy. That may well change in the future, but that’s the reality of today. Anything else is pure opinion and conjecture.
As to Lotus Foundations? First time I’ve heard of it, and I get flooded with new solutions every week. Guess I’m not on IBM’s hit list yet, but how many other VARs are like me?
Brad Kowerchuk
President – Bralin Technology Solutions
Brad: Thanks for adding your voice to the conversation. The VAR Guy will keep an eye on Bralin Technology Solutions going forward.
And to your point about Open Source: Our resident blogger is still waiting to see a true open source alternative that’s widely considered a head-on rival against Small Business Server. No doubt, Linux and LAMP have server momentum — but not really in the classic small business market.
Lots of comments, mostly opinion, a few assumptions and very little fact. As a five year VAR of Nitix and now Lotus Foundations, if a VAR is waiting for a customer to ask about a solution by product name, how much of a trusted advisor are you?
The Lotus Foundations Appliance includes everything required to run a small business or non-profit organization in the box. That includes backup with hot swappable hard drives. The entire OS in Flash (updated via a 3 minute download)
Dual WAN ports for automatic network failover. Combined with built in Dynamic DNS with a private multi-DNS server network for customers, an ISP failure is automatically detected and the backup ISP is on line automatically. No separate router required or maual effort required. Lotus Notes replication allows you to continue to work remotely with no VPN required or even off-line.
Lotus Notes is an application development environment. There is an entire world of apps hosted on Notes and the databases it can replicate to client systems. It isn’t Outlook and Exchange. It is different. But get some facts.
Five years ago we put our small business on the forerunner to Lotus Foundations and found it much easier to manage than SBS (which we removed to make way for the appliance then known as the Net Integrator running Nitix).
With the autonomics built into Lotus Foundations, deploying a new service like ftp is a single click. That starts the service, opens a hole in the firewall and registers the DNS name. Add user access to ftp with another click.
It’s not for everyone, but it works well for a number of organizations in the under 100 user environment and when you start pricing all of the features versus a Windows-based system, you’ll spend less to acquire a Lotus Foundations Appliance and spend less to maintain it.
I am a Lotus Foundations provider. I started as a Net Integration partner and loved the ease of deployment. I was a huge fan of MS SBS until I tried out the “different” server. Oddly enough I can have an entire company up and running with email and everything else equivalent to Active Directory plus backp in an hour or less. Try doing that with SBS. Our company is running the product and love it. Now that I can also run VMware I can run virtually any application and have better security without use of an external firewall, router, antivirus and spam filtering, it is all built right in. All in all it is a great deal and a great system.
Daniel Bombard
Systems Admin
Yuma Office Equipment
David, Daniel: The VAR Guy thanks you for offering an in-depth view on Lotus Foundations. Please keep our readers posted as you evaluate additional deployments. Our resident blogger doesn’t claim to have your hands-on expertise…
Ok – here in Australia, the only news of the IBM offering we are hearing right now is coming from the US. Clients are after a Microsoft solution. love it or not, the clients KNOW that they can build their business on Microsoft product. It’s easier to help the clients with something they already have some idea about than breaking them into something new.
Wayne: Thanks for the view from down under. The VAR Guy was in Australia in October 2008, where he learned Australia is the number one country for Microsoft Small Business Server, in terms of per capita deployments (or some metric like that…).
Still, you need to be educating customers about the solutions you recommend — regardless of the supplying vendor. If somebody builds a better mouse trap, would you keep selling the old mouse trap?
Not saying that’s the case with Microsoft vs. IBM/Lotus. Just food for thought.
How can you compare a server to a true appliance? The Lotus Foundations box has no keyboard, no monitor, no mouse and it is truly plug it in and turn it on appliance for SMB. This is like comparing a iphone to an old rotary dial phone. Simply put… the days of deploying servers in small businesses are coming to an end quickly and there are going to be two type of small business partners – those that adopt appliances and SAS and those that are no longer in business.
Trust me on this… if I’m pitching a Lotus Foundations box going up against another partner pitching a SBS server I will not loose. I have way more margin to play with on Lotus Foundations. For those that are just learning of Lotus Foundations in this thread… suggest you get up to speed fast, this is a game changer.
Michael: Small Business Server certainly has a loyal VAR following, but The VAR Guy must concede … he’s impressed to see Lotus Foundations solutions providers offering such upbeat statements about IBM’s strategy.
So where do you put their Line of Business (LoB) Apps? All the things that Lotus Foundations does have been around in ’single box linux’ servers for years (some have even included Asterisk for phone capabilities), and yet Linux is still not the premier platform for SMBs. All this debate misses the one fundamental aspect of SMBs, they often have LoB applications that must be addressed and the majority of these apps run on Windows. Good or bad, that is simply the fact of the matter. If you have to run Windows for your LoB applications, then it just keeps your environment easier to support if it is all Windows. Getting support from the LoB vendors certainly will be easier (which SMBs REALLY care about). To really gain market share, Lotus Foundations needs to have a complementary community that includes application developers that can deliver leading applications that SMBs want to run (and in the end make money with). Without this, it won’t matter if Lotus Foundations is technically better. The SMB client only cares that their OVERALL IT infrastructure helps them to generate profits.
I am both a loyal Microsoft Gold Partner and an IBM Advanced Business Partner, who exclusively sells SBS2008 running on IBM System X hardware. Both companies have been great partners to me, and I would never hope to say something that denigrates the investments of time and treasure these guys make in my business.
Having said that, I have never sold Lotus Foundations but remain curious about it. I’m surprised that my fellow HTG’ers are unfamiliar, as our HTG sponsor (IBM) had it on display during our January meeting. Like I said, I’m not selling it but it is a very compelling offering that I certainly wouldn’t dismiss.
I have no idea if IBM is having much traction with this product or not, nor do I really know how well SBS 2008 is doing…but I do respect both Microsoft and IBM and will continue to watch and learn about Foundations. I appreciate the VarGuy’s apparently-unbiased coverage that provides a great place to learn. Thanks, VarGuy!
Erik Thorsell
Success Computer Consulting – Minneapolis, MN
This post is in response to Cameron Gracie’s on the ability to run Line of Business (“LoB”)applications. Until earlier this year, we would deploy a Windows server next to the Lotus Foundation Appliance for those LoB apps that required it. If this was an organization that already had a Windows server, we would move all of the WAN firewall, infrastructure (DHCP, DNS, ftp, VPN tunnel termination, domain and user management), file sharing and backup tasks to the Lotus Foundations Appliance and leave only the LoB app on the Windows server after making it a member server in the domain hosted by the Appliance. For many LoB apps, they don’t want you on the SBS server anyway.
Since about April of this year, IBM has offered a VMWare solution that runs in a virtual machine on the Lotus Foundations Appliance. Depending on the application, this may be all that is required. It really depends on the requirements of the application and the user activity on the server as well as the host processor, memory and disk space. If you just need to host terminal server to provide RDC for a few remote clients and QuickBooks for a few staff members, they should run just fine in that environment. Put shared data on the Lotus Foundation network file shares and it will be backed up to the integrated intelligent disk backup (idb) that uses hot-swappable hard drives so you can store copies of critical data off-site to avoid losing all your data in the event of a catastrophe (fire, flood, theft, hardware failure …).
Eric@21: The VAR Guy certainly has some biases. But he always tries to disclose those biases so that readers can make informed decisions about his coverage, perspectives, etc.