Lotusphere: The pre-show analysis

IBM‘s Lotus Software division goes into Monday’s annual Lotusphere conference in Orlando riding high after a stunning leap in sales in the company’s most recent quarter.

Last week it reported revenues were up 30 per cent over the same period in 2005. By comparison, sales were up in single digits in the previous three quarters of 2006.

With Lotus about to launch Notes 8.0 later this year and set to announce new products at the conference, has the troubled collaboration and messaging products brand turned the corner in its battle with Microsoft, or was this just a one-month wonder?

At least one industry analyst was impressed by the numbers. “Wow,” wrote Forrester Research’s Erica Driver in an e-mail interview. “This is a huge increase.” Until the release of the numbers, she was predicting Lotus would – embarrassingly — have even slower growth in 2006 than it did the year before.

Still, both Driver and Gartner analyst Matthew Cain said customers they talk to still express confusion about the division’s strategy and product roadmap, making this year’s Lotusphere more important than ever. Since introducing collaboration products and strategy branded IBM Workplace several years ago, customers and partners have been wondering how much to invest in Lotus products.

In interviews, company executives admitted some damage has been done and that slowly the Workplace brand has been shifted away from the spotlight.

“They have made progress in some ways,” said Driver. “Some Lotus customers I speak to feel better, but there are plenty who don’t. And then there are the moves that are confusing. The (Lotus) branding direction hasn’t been cleared up.”

Lotus partners in Canada praised the company’s efforts to help them directly, such as passing on leads and making joint sales pitches. But they give failing grades to the marketing department, which they say has made the Lotus name all but invisible publicly.

“I’m not even sure what they’re advertising half the time,” said Bruce Grant, president of Metalogics Consulting, a Mississauga, Ont. Lotus consulting firm.

“They stopped pushing Domino (the Lotus mail server) for the past four years,” said John Zarei, co-founder of Point Alliance Inc., a Toronto Lotus integrator which also sells a Notes content management application it builds. “The last time I saw an ad for Domino, I don’t remember. So people lose faith. It’s hard for us to sell IBM products.”

Lotus executives know expectations are high for this year’s Lotusphere, where the revamped Notes 8.0 beta will debut. Based on the open source Eclipse architecture so it can be adapted to Windows, Unix and Linux versions, Notes 8.0 (dubbed Hannover) will feature an overhauled interface and include a set of office productivity tools (including a word processor and spreadsheet) which support the Open Document Format (ODF) standard.

Other features and new products have been cloaked in secrecy, although officials will talk generally about new things coming — some taken from Workplace — if not time frames. Doug Heintzman, director of Lotus strategy, said the conference will hear about the company’s experiments in what he calls “social computing technologies.” These include a set of desktop tools so a user can assemble groups of people with shared interests, and the ability to categorize and attach metadata to documents that others can see, which he called “social bookmarking,” as well as the ability to create composite applications through sophisticated mashups.

Attendees will also learn about Project Geneva, a content repository technology that will allow users to build team rooms quickly.

“This is very much a renaissance,” he said of the new products coming out. “We think there are a number of very important shifts in the marketplace and some new technologies, especially in the social computing area, that are going to make a big impact, and we’re well placed.”

“Some of the announcements will propel us past the competition in some areas,” predicted Tom Papagiannopoulos, the Lotus brand executive for Canada.

The stakes are high. “If you look at the e-mail market, the momentum is on the Microsoft side,” said Gartner’s Cain, “particularly after the release of Exchange 2007. The challenge for IBM at Lotusphere is to catapult Lotus back into the minds of the IT community as a thought leader in the collaboration space.”

“(This) is a crucial year for Lotus,” he said. “This their opportunity to try and establish clarity in the market around Domino, to re-establish leadership in the collaboration space, and articulate the business value of the direction they’re taking Domino, particularly towards this composite application development.”

What analysts and partners want to hear is clarity on Lotus’ strategy. Heintzman, who admitted criticism on the division’s stragegy is “fair,” promised Lotusphere 2007 will be “a watershed” in the clarity of Lotus’ vision.

“It’ll be a coming out party to where we’re going.”

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including ITBusiness.ca. Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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