June 25, 2008
And what did all that marketing get them?
Via Duffbert, I just had an interesting read of the transcript from Unify Corp.'s 2008 year-end earnings call. Unify, as you may recall, is the company whose migration product from Notes to Microsoft, Composer, was aggressively marketed to SearchDomino subscribers from December 2007 until a few months ago. By our collective reckoning, their mailing went out at least four times to SearchDomino mailing lists.... could have been hundreds of thousands of impressions.In their earnings transcript, Unify's president, Todd Wille, discusses the success of Composer in the Notes environment (emphasis mine):
In 2008 we started to gain momentum with our Composer migration business. To recap, we closed eight deals for fiscal 2008, for bookings of $1.1 million, and as I said earlier, the eight deals were six pilots and two full-scale migration projects. ...So let's recap:
We have a total of eleven Composer customers to date. ...
Today we have eleven final proposals out to customers and of those six are pilots. ... Out of the six pilot deals we've won since January 1, Microsoft has paid for three of them.
- Eleven customers to-date, but eight deals in 2008. So they came into this year with all of three Composer for Notes customers.
- Closed eight deals -- two full migrations. Out of some 65,000 plus Notes customers (actively on maintenance with IBM or otherwise), the success rate is 8/65,000..
- Six of those were pilots. Three were paid for by Microsoft, which means that 50% of the time, customers couldn't be convinced to invest on their own. We don't know if those pilots will become actual migrations or not.
- They have proposals out for six more pilots and five final proposals (presumably, to five of the six pilot customers), meaning they have introduced the potential to up their customer count to 17.
- The six pilots and two full-scale deals generated US$1.1 million in revenue. That means the cost of the migration tool -- not the migration, just the tool and services for the tool -- is in the six-figure range.
This doesn't exactly seem like the groundswell of "everybody's migrating" that the competition likes to portray. Actually, very little empirical evidence supports that theory.
Putting all this in context of Microsoft's competitive effort is where it really gets interesting. See, Todd Wille goes on to say that
The Notes-compete initiative continues to be one of the top three corporate initiatives for Microsoft. ... over the last year, and continuing this upcoming fiscal year, they've got two, three or four key initiatives that really the whole company focuses on in addition to their normal goal setting. And one of those key initiatives is this whole Lotus Notes initiatives ... IBM identified as one of their major competitors, those two reasons have led this to be one of the key initiatives for them as a company last year and this going forward year. ... And it goes all the way to the top of Microsoft and all the way down, is that this initiative is important and it's funded and that bodes well for us.Ah yes, Notes Compete. Entering Microsoft's fiscal 2009, this must be what, the fourth year they are running Notes Compete. By my own estimation, Microsoft has put $50 million or more into this effort over the last four years. If we take into consideration investment in business partners, marketing, events, and MS-funded migration services, it's probably even more.
And yet, through it all, Notes revenue has grown for 13 of the last 14 quarters (and for Lotus as a brand, it's 14 of 14). The installed base of active Notes end-users grew by 10% from 2006 to 2007. IDC reported that IBM gained share while Microsoft lost share from 2005 to 2006 (their report on 2007 is still not out yet). The rate of customers deploying Notes/Domino 8 is faster, according to support calls and tracking surveys, than Notes/Domino 7. Meanwhile, IBM has picked up a bunch of new wins, too. We've got press releases in development, and some news is already out.
Have there been customers that have migrated, begun migrating, or attempted migrating from Notes to the Microsoft platform? Absolutely. Have they been successful? Some have. Have they been able to demonstrate any actual ROI, TCO benefit, or other positive impact on their company's bottom line for doing so? I still haven't seen that case study.
Location: Highland Park, IL USA
Nice analysis and number crunching, Ed... I hope it was worth it for SearchDomino, too. :)
on 6/25/2008 11:24:53 PM - http://www.groupwarenews.com
Fan-friggin-tastic! :o) I'd say something else but my smile is too big.
Reading this was certainly a great way to start my day. Thanks Ed!
Nice article.
One thing caught my eye:
"By my own estimation, Microsoft has put $50 million or more into this effort over the last four years"
Is that more than IBM spent on marketing for Lotus brand ?
---* Bill
{ Link }
on 6/26/2008 5:33:40 AM -
This is of slight interest ed. I had discussions with a company who were intending to migrate about 45,000 users to Exchange. They had a simple approach. New deployment and local access to an old and dying client.
Which leaves composer out in the cold somewhat.
Composer is a tool for companies who think that the IC locked up in the Domino products is worth protecting (and paying for). Not all companies think that way.
I'd guess that MS is not just counting the number of sales of Composer but also counting the overall awareness of willingness to engage those who might consider moving.
It's all a game in the end.
We had Unify in for a demo and pilot of one of our databases. I must admit, the Composer product is absolutely brilliant. Their .NET framework for using Lotus Notes objects is amazing. They basically took the Notes LotusScript API and wrote the whole thing in C#. It is really a great way for your Domino team to learn .NET.
I liked the people we worked with from Unify. Of all of the Microsoft teams sent to estimate our migration, Unify had some guys that could actually talk "Lotus Notes." If we would have been forced to go the .NET route (thank goodness we were not), I would have felt very comfortable in their hands.
That being said, we found out some interesting things working with Unify. Their product is meant for Lotus Notes shops that have relatively simple client applications. Already existing web applications do not translate well. I'm not sure how many shops still exist that are client-only with no web applications.
I'm sure there are plenty of reasons that Unify might not be getting the conversions.
1) Companies are choosing full-service consulting companies to convert (not migrate) their existing apps from scratch
2) The companies actually picked Lotus Notes over Exchange (our case)
3) IT shops might just say (wrongly) that all Notes apps can be ported to Sharepoint
4) It is really hard to get buy in from the customer for a migration like this. The customer gets absolutely nothing out of the migration except for a new ASP.NET web interface.
I also agree with Ed. Where's the ROI with .NET applications? I jokingly created an app in three hours with requirements from the .NET team. They are currently on hours 1000-1500 and are they are probably halfway done. Granted, their web-app was more slick than my three hour application but I completed the requirements. If both teams presented to their projects to the CEO with actual costs... I wonder which platform he/she would pick in the end.
@4 is it more? no. The Lotus brand marketing budget is in excess of that per annum.
on 6/26/2008 9:49:29 AM -
The interesting point about the Unify product is they started as a Java development shop and their application was about moving Domino apps to Java/J2EE. I understand their customers asked if instead of Java, they could do move Notes to .Net instead.
if a Notes app moves to Java, is that as evil as moving to a .Net platform? :)
on 6/26/2008 10:22:38 AM - http://www.navasoata-unified.com
mmm Bookings of $1.1 Million... I wonder what the cost was? Why wasn't it able to stand on it's own without MS$$? Also, what would have been the effect of keeping Notes or upgrading? What was the delta? These VP's and Director's have to remember it's the companies money they are spending and need to define a quantifiable reason as to how this new thing helps the company. Would the stockholders be happy? Little thinking is going on with these MS changes....
on 6/26/2008 10:37:04 AM -
@6 Re: "IT shops might just say (wrongly) that all Notes apps can be ported to Sharepoint" Which Notes apps can't be ported to Sharepoint? Mainly, are there obvious "cannots", right out of the gate? (I've been tasked with researching this very thing, and am interested in any information I can gather.)
@10
I wish I had that answer myself. But we have had more than one Microsoft consultant team look at our inventory and show us what makes a good ASP.NET application versus doing one completely in SharePoint. From our discussions, it seemed the consulting groups would pick ASP.NET if application contained anything like: heavy validation, roles and security on the same form, Workflow, cross-database functionality, scheduled processes, even mail-in functionality.
We have Sharepoint in house. All of the "applications" that I have used have been one flat form. Granted... it's really cool that the user can do all of this by themselves but they have been terribly unsecure, ugly, and almost unusable. Granted... if I got to maintain them they wouldn't look that way ;-)
Once again... Sharepoint and ASP.NET applications can be customized but at what cost? I've never seen anything in .NET done for less than 100 hours when I can do the same thing in 20 minutes.
on 6/26/2008 12:27:13 PM -
Ed, I'm glad you're now an expert on Microsoft initiatives and spending... :-) Pretty soon, the company won't need me...
on 6/26/2008 1:01:12 PM -
@11 Thank you, Tom.
That's good to see but, this is for the applications. Migrating mail (from any platform to any platform) is far less complicated and far less costly.
And the mail is the "face" of Lotus Notes. That's by far its biggest application. No one begged for years about the ugliness of their TPS ({ Link } ) database lacked the user friendliness of other systems; they complained about the mail.
Once the mail is migrated, then Domino as an application platform is often relegated to platform of last resort.
on 6/26/2008 1:09:12 PM -
@10, Karen, you should also talk to Quest...last November, they bought a little company called Proposion that is doing very interesting things around migrating Notes apps to SharePoint.
@11, Tom, I'd respectfully suggest that in a lot of cases, partners like Unify, Quest, Colligo, Casahl, Binary Tree, and many, many others have sometimes far more interesting solutions for migrating Notes apps to SharePoint (or ASP.NET or other things) than we do. And, just to be clear, SharePoint is not the right destination for every Notes app, though it may be a good target for many...
on 6/26/2008 1:14:04 PM - http://www.vanessabrooks.com
@10 The answer of course is it depends.
But the ansewr lies in what your apps do for you and how they do it.
Nothing in this world will equal a Domino app because there are few products if any that are as all encompassing in their functionality.
An important idea to keep in ind, one which I posted about here: { Link } is the ability to retain records, emails and data in a native way so they are always accessible in the future.
With Microsoft's rewrite every 3-5 years of their underlying code it makes it hard to look up something from a system 4 versions earlier. Compared to Domino where the apps and data are just as accessible now as they were back in 93.
@10 (Karen): I don't want to pull this too far off track, but the big gaping hole is security. Until SQL Server gets row-level security there is no good way (out of the box) to effectively secure data in SharePoint. If you are using Readers and Authors fields, or your app's security is heavily role-based, SharePoint is not a god fit.
@11 - You're absolutely right. For any moderately complicated Notes app (meaning it uses more than one form and more than 2 - 3 views), I'd go with a native ASP.Net app before I tried shoehorning it into SharePoint. Sure there are people who can make it work within SharePoint, but to me it's a lot more effort than it's worth. To be honest, I have no idea why anyone would even bother.
Don't even get me started on mail-in database functionality in a Microsoft world.
@14 - I beg to differ. The Notes container being ugly and a lack of design capabilities made all Notes apps ugly and the source of many user complaints. I'll admit my experience in Notes/Domino is with SMB's but in those environments Domino is typically the *only* application server. If they were to migrate to anything else it would have to offer the same capabilities in the same footprint.
on 6/26/2008 5:39:59 PM -
@10 - Also keep in mind that "Migrating to Sharepoint" isn't just migrating to Sharepoint. You're usually migrating to Sharepoint + Exchange + SQL Server + ....
I got in a discussion once with somebody about an application I was building on Domino. The guy (very pro-MS, and a good friend of mine) said "Well, you could use IIS for this piece, Exchange for this functionality, SQL Server for this piece, ..."
My response: "Or I could just use Domino." :-)
@17 - Do tell... I was wondering recently how you set up the equivalent of a mail-in DB in the MS world. *Stupidly* simple in Domino.
@14 - When we did our Lotus Notes inventory... I found some of the ugliest R3 applications. I looked in the log thinking these apps probably haven't been touched since 1999. I was so wrong.
People were still using these ugly (they made me cringe) applications because they were useful.
I'm still waiting for the .NET/Sharepoint team to see it and say... "We can make that better. Just give us 2500 hours"
on 6/27/2008 8:36:58 AM -
@7 Ed, you often talk about comparing apples with oranges. So if you take the Websphere component out of the marketing budget and stick to the Lotus products which are being targeted here (MS spends millions more marketing against other Lotus products), would the answer be the same???
@20 What WebSphere component?
I was asked about the Lotus brand.
That means Lotus Notes/Domino, Sametime, Connections, Quickr.
I can't disclose the number but if you think about it this way... we have 850 developers working on Notes/Domino products (that's a publicly disclosed number). As with many organizations, the marketing budget is larger than the development budget. The development budget covers salaries for 850 people...
I have no idea what you mean by "MS spends millions more marketing against other Lotus products." Could you please provide examples?
It really gets old having to defend against the "Lotus marketing sucks" mentality, because while it's never enough to meet the expectations in the market, it's a heck of a lot of good work.
on 6/27/2008 9:32:18 AM -
@21 - Ed, your fellow IBMers in the IBM i brand have been dealing with that same "marketing sucks" mentality for years as well. It's equally frustrating for them.
Quite honestly with some people it will never be enough, not until they're seeing TV ads for Notes & Domino during CSI, or 24 or whatever else, regardless of whether or not it would make any difference.
Maybe some of them feel that they're tired of (in their minds) being the marketing outlet for the product, who knows.
It also matters the geography. I think the US lags in terms of visibility of Lotus vs say Europe & Asia. So if folks in the US don't see what they think should be there (which usually means "bring back Dennis Leary") they complain, all under the guise of being passionate about the product.
I frankly can't remember the last time I saw a Microsoft ad on TV. So clearly it isn't just that. I do know that I'd be pretty happy to see some IBM Lotus mention during one of the PGA Tour broadcasts though. : )
For me it all comes down to mind share, and convincing decision makers and IT professionals that IBM Lotus has a great story to tell, is a good technology investment, and then telling their friends & colleagues about it.
@22 there -was- IBM Lotus mention during the Masters recently...
{ Link }
I agree with Ed. I'm typically a major whiner about IBM marketing but I think we're comparing apples and oranges.
Microsoft has always been the company that is constantly knocking on your door offering freebies and assistance. They reach out to all levels of development (CIO to developers).
IBM is obviously a bit more conservative. Except for Lotusphere and a few other local venues... I have only once met an IBM/Lotus person.
We are never going to change their philosophies. Does one philosophy work over another? I don't know. In the short term I would say Microsoft is winning the RAD development war. Too many of my teammates and friends have switched from Lotus to Microsoft products. In the long run... it might work for us (the Notes developers and community). Many overblown .NET projects are seen as failures and users are reverting back to the systems that work (and the developers who actually listen to them).
Let's let IBM keep doing what they do and we'll keep fighting the good fight with quality applications and 99.9%server up-time (if you're one of those dreadful admins).
on 6/27/2008 1:48:55 PM -
@23 - HA! I missed that. Good call.
on 6/27/2008 2:49:48 PM -
@23 - Ed, I went to that link, and clicked on the link to view the video:
{ Link }
If the video that plays there is what was on during the Masters then it had no mention of Lotus at all. All logos, text, etc. were IBM-solo (even the video player).
Am I looking in the wrong place?
Erik, IBM uses only one brand for television advertising -- IBM. But the product in that ad is Lotus Connections.
on 6/27/2008 4:02:48 PM -
@12 - Jim are you assuming that they ever did need you?
In my experience, the technical decision comes down Domino/Notes, the emotional decision comes down to Outlook. I have constantly asked what does Outlook give you technically over Notes? Not suprising the answer is nothing. I am sure Jim will say Blah Blah Blah, but can I hear one technical advantage? Nope! Is there a cost advantage to Outlook (keep in mind without an EA you have to purchase it or purchase Office), nope, unless you signed a bad EA with SA.
on 6/27/2008 5:59:29 PM -
I must admit Ed, IBM has managed to confuse the hell out of me and a whole load of bloggers who believe that Websphere Portal flies under the Lotus Software brand.
{ Link }
If I got that wrong, my apologies. Must be that rock I live under :-)
@29 it is part of the Lotus family, but it's not the context of how I answered the question. And even if it was considered as part of the question, my answer remains the same.
on 6/29/2008 8:04:56 PM -
@27 - Yeah, I got that it was Lotus Connections. But when you said "IBM Lotus" was mentioned I was thinking that the word "Lotus" would be said, or at least shown, somewhere in the ad. I'm a little disappointed that it wasn't.
Don't get me wrong - it's great that there was a Masters ad for something from IBM besides Blades. I was just thinking that it would have been nice to see (literally see) Lotus software or hear/see specific mention of the Lotus brand.
@23 - citing that video as a "mention" of Lotus really shows how bad things have got! Pushing the IBM super-brand doesn't count as Lotus marketing unless "LOTUS" is written in big letters and clearly spoken on the soundtrack. Sure, it's IBM marketing, but it's not Lotus marketing.
At the moment the branding doesn't stack up: there's the friendly yellow/orange Lotus-branded Lotusphere, the website has had a makeover to make it a little less sterile, but then that video is just boring old IBM grey blue ... where's the yellow? Where's the orange? Where's the word "Lotus" for ****'s sake?!
(Yeah, I know, another "Lotus marketing sucks" comment that you can ignore because obviously there's no truth in it)
Julian,
Perhaps, just maybe, the target audience for the commercial didn't need to get bogged down in the product name or brand associated with it. This is actually quite common for mainstream media marketing across software -- Microsoft's "people ready" doesn't mention Office, SharePoint, etc., SAP's ads never mention product names, Oracle occasionally mentions "e-business suite" or something generic like that.
I personally don't love the ad because of the content, but in terms of IBM showing that we're in this space, it does that.
Ed - I see what you're saying. I was just pointing out that citing as a shining example of Lotus marketing a video that doesn't promote or even mention Lotus, shows what a sorry state Lotus marketing is in.
Duffbert on 6/25/2008 10:48:15 PM - http://www.duffbert.com