The Four Hundred--Domino, WebSphere, iSeries: Collaborative or Uncoordinated?

It's an often-asked question: outside of its loyal installed base, is anyone buying the IBM iSeries? Given the trends toward server consolidation, which more often than not means consolidating small AS/400s on large iSeries hardware, and a net loss in the overall number of boxes plugged in, what's keeping the Rochester assembly line from slowing to a crawl? The folks running IBM's Notes/Domino unit say they bring the meat and potatoes to the iSeries table.

Notes/Domino, which has seen sales dip a little, has nonetheless maintained its leadership position in the groupware and messaging market, according to a recent report from market researcher IDC, and in that market many millions of people are using it for e-mail, calendaring, scheduling, and sharing documents. Until 1998, none of these Notes/Domino users could spell OS/400; they were primarily Windows-aholics with some Unix added to the mix. Since then, AS/400 and now iSeries boxes have grown in use as a Domino platform, and now OS/400-based machines serve up an estimated 15 percent of the Notes/Domino user seats installed worldwide. Only a few years ago, OS/400 represented only 5 percent of installed seats. Of course, that doesn't mean those shops are new iSeries customers, but it demonstrates that Notes/Domino is important to the iSeries. What can be inferred from this growth is that many new Domino customers (which are already OS/400 shops) are buying the iSeries, and some new iSeries customers are buying Domino. IBM has not been explicit about how many iSeries-Domino customers or seats are actually new to the OS/400 platform. Windows-based Domino servers still drive the vast majority of Notes clients, however.

According to sources at IBM, the server consolidation story has been and continues to be the straw that stirs this potion. The return on investment that comes from a reduction of Intel-based server farms continues to win converts. Although no hard figures are cited, those who enthusiastically support Domino on the iSeries say that for every 20 customers who purchase an iSeries for the purpose of running Domino there are five who are new to the iSeries fold. These numbers aren't likely to instigate discussions of a second iSeries factory to keep up with demand, but going from zero to 15 percent market share in the sizeable Notes/Domino installed base is an indication that the iSeries has moved some hardware.

It's also a pretty good bet that the Notes/Domino installed base includes many iSeries shops that have traditionally run Domino on Wintel iron, because that's the history of Lotus and because change is slow to come. That type of change may become more urgent if IBM's iSeries sales channel can make the economic points of server consolidation stick in this target market. Organizations that are struggling with unruly Intel server farms and expensive Microsoft licensing practices are becoming increasingly disenchanted with each passing day. This is a great opportunity for the iSeries.

Jelan Heidelberg, IBM eServer Business Development Manager for Lotus, and eServer Marketing Manager for Lotus on all eServer platforms, says Domino continues to be one of the best success stories for the iSeries, particularly when moving outside of the OS/400 installed base. Several years ago, Heidelberg says, 25 percent of customers who bought an iSeries to run Domino were new iSeries customers. Heidelberg says that that trend continues, but she stopped short of claiming it was still at the same rate, saying the only evidence she has is purely anecdotal. Getting any sales-related figures out of IBM is like trying to pry open a bank vault with a paper clip.

Our own Guild Companies estimates show iSeries hardware sales amounting to just under $2 billion a year, and we reckon that Domino drives $300 million to $400 million dollars of that revenue these days. (It used to be about $500 million in Lotus-related OS/400 server sales in the late 1990s, we estimate, but IBM sold $3.5 billion in AS/400 iron back then.)

How close is that estimate? Apparently not bad. "Domino is going to drive hardware sales because it likes memory and disk," Heidelberg says. "And because end users are not good about keeping their mailboxes small, and Domino likes megahertz, it drives new processor sales. It might cause customers to upgrade to a new processor, rather than adding disk capacity to an older server. Add those things together and the number you have sounds about right."

All iSeries running OS/400 Enterprise Edition on Model 825, 870, and 890 servers are now packaged with a software bundle (on CD) that includes 100 licenses of Lotus SameTime and 100 licenses of Lotus QuickPlace. Both run on top of Domino. If the iSeries box goes to a company that does not have Domino on its systems, a restricted version of Domino can be installed as middleware so both SameTime and QuickPlace can run on top of Domino. The customer does not get a license to use Domino e-mail or to run applications on Domino.

"Most of the customers who buy the Model 825s and up are buying the enterprise editions because they need the 5250 emulation," Heidelberg says. "The number of those registering their intent to use all the free software that comes with the box is not very high. I would like to get the message out: 'Hey, guys, this is free. Go try it!' "

As much as iSeries and Domino fans want to paint a happy face on that combo, it's not turning the desert into an oasis. Yes, Notes/Domino 6, now a year old, is better than R5, where close to 80 percent of the Domino installed base resides. And the recent 6.5 version shows the way toward bringing collaborative computing to small and midsized businesses. But there's a bit of a conflict going on that could be responsible for iSeries growth.

The friction has a great deal to do with WebSphere and IBM's plans to blend Notes/Domino and WebSphere over the course of the next five years or so. Domino users, for the most part pleased with their platform, are skeptical--actually, they're more than skeptical; they're mad that the WebSphere Java 2 Enterprise Edition (J2EE) environment is running roughshod over them. And where does WebSphere have the most trouble running? On the iSeries. The iSeries installed base has not exactly embraced WebSphere, and the Domino installed base--whether it loves OS/400, Unix, or Windows--looks at WebSphere as if it were five miles of bad road.

IBM's Software Group and its Lotus division have been pushing Java since the R5 introduction, and it is clearly moving forward, but not without the Notes/Domino users pushing back. So Lotus has gone into its reassurance mode. "If I look out three years from now, or for the foreseeable future," Heidelberg says, "there will continue to be both platforms (Domino and WebSphere). Lotus will preserve customer investments and make sure they are compatible. There are 105 million users out there. Lotus is not going to cut them off. It will be a very-well-thought-out vision. Customers will have the option to continue using Domino and to gradually move applications and data in an orderly fashion."

As it stands today, Lotus has two different but complimentary suites of products. Those built on Domino are SameTime and QuickPlace. IBM has recently renamed these products Lotus Instant Messaging and Web Conferencing Lotus TeamWorks respectively, but the old names are more widely used in the field, not to mention much less cumbersome.

Then there are the new WorkPlace products, built on WebSphere, DB2, and WebSphere Portal. WorkPlace 1.0 was released for Windows 2000 and AIX in the second quarter of 2003, but has yet to be made available on the iSeries. At this point it can be best described as light-function messaging.

The big story going forward is the development of the Lotus Workplace strategy. When the curtain rises at Lotusphere in January, we'll be seeing Workplace 1.1, which contains the architecture to use portal framework. As 2004 rolls on, expect to see team collaboration products built on the portal architecture. If Workplace 1.1 is not generally available by the time Lotusphere kicks off, it should come sometime later in the first quarter. Workplace 1.1, by the way, will run on the iSeries, and it will come with a restricted-use license for WebSphere portal. That means that if someone wants to build application integration portals, the restricted-use license won't cut it. That job will require WebSphere Portal Server. In a portal it would, for instance, be possible to access a Domino application.

Heidelberg says a little further down the road users will be implementing Workplace while continuing to use Domino. And the gradually the two will come together. "If a customer has SameTime today," she says, "in the long run that customer will be entitled to have that same kind of functionality in Workplace. Customers are paying for user capability, not for whatever backend that user is attached to."

When Workplace 1.1 becomes available to iSeries users, you'll hear more about the merging of Domino and WebSphere with a product called WebSphere Studio for Domino. It will allow you to plug in to the WebSphere Studio to develop Domino applications. Domino Rapid Application Development is one of the strengths of that platform. That strength, in theory, is coming to the WebSphere portal side. By the way, the responsibility for portal design and development is moving to Lotus. Although WebSphere Portal is still branded as WebSphere--and it will continue to be branded that way--it is controlled by the Lotus division.

It would seem as though the strategy for bringing WebSphere and Domino together is in the hands of Lotus. How they convince the Domino installed base that this is a good idea and how the iSeries fits into this picture is still not clear.