IBM Says Microsoft ‘Grossly Exaggerated’ Exchange Sales Data
September 28, 2009 Alex Woodie
IBM is once again talking up its Lotus Notes/Domino platform and how it’s doing against Microsoft in the war for collaboration software supremacy. In the latest volley, IBM executives say they are tired of the “hot wind” blowing out of Microsoft headquarters, and say that Notes/Domino is actually “winning” over the Exchange and SharePoint products–a claim that contradicts analyst figures. However, IBM says the analyst figures are tainted because Microsoft doesn’t honestly report sales figures.
Divergent viewpoints are nothing new in the ongoing war between Microsoft and its Exchange and SharePoint products on the one hand, and IBM and its Lotus Notes and Domino products on the other. For every claim by one company, there is a counterclaim by the other–and so on and so forth–to the point that one wonders whether IBM and Microsoft spend more time and money worrying about public perceptions than actually researching, developing, selling, and supporting software that people want to use.
Of course, the IT media and analyst communities are great enablers in this ongoing duel. We love a good fight–even if it’s Goliath versus Goliath–and all the associated baggage that comes with “Microsoft versus IBM.” Just the same, there is a duty to parse the claims, analyze the numbers, and try to separate fact from fiction. Unfortunately, it’s hard to do in this case.
First, let’s look at IBM’s numbers. Last week, IBM claimed that 15,421 companies since 2008 “have chosen IBM over Microsoft” when it comes to the software running their email and collaboration systems. IBM also did a little strategic name-dropping when it said that list includes Global 100 companies such as BASF, Chrysler, Coca-Cola, Colgate-Palmolive, General Motors, GlaxoSmithKline, and Phillips Electronics. What’s more, IBM says some of the companies on this list–including U.S. Bank, PNC Bank and Continental Tire–are completely ditching their Microsoft products in favor of Lotus.
That five-digit number certainly looks impressive. However, the elephant in the room is the fact that many companies run products from both companies, which means that both Microsoft and IBM count them as customers. If only three of those 15,421 companies are going whole-hog IBM, that’s not anything to be proud of.
Now, let’s look at IBM’s words. “IBM collaboration software is winning against Microsoft worldwide,” says Bob Picciano, general manager of IBM Lotus. “We’ve expanded our customer and partner base significantly, and our footprint within companies with both environments.”
Those words don’t jibe with reality, at least how IDC sees reality. According to the latest IDC figures released this month, Microsoft still dominates this field, with 50.2 percent of the market in 2008, a 0.5 percent increase from 2007. IBM is number two, with 35.8 percent of the market, a 0.2 percent decline from 2007. Both vendors grew their businesses in this market, but Microsoft grew its faster, at 11.3 percent from 2007 to 2008, compared to IBM’s 9.5 percent. In all metrics, Microsoft beat IBM.
The embarrassing part for IBM is that the company referenced this very IDC report in its announcement, which carries the misleading title (at least from the perspective of IDC’s numbers) “IBM Lotus Gains in Global Collaboration Against Microsoft.”
Asked to comment on the discrepancies, IBM says it only referenced the report to show the total size of the market, which IDC says is $3.1 billion. The company also went on to explain how IDC’s figures are not accurate reflections of reality.
“The winning that is currently taking place would not be completely included in that report,” Picciano says via email. “IBM also disputes the way Microsoft reports its seat share. We consider their claims to be grossly exaggerated. We also name many accounts that IBM has grown in or maintain are being falsely portrayed by Microsoft as their accounts. Unfortunately, some of these Microsoft claims may make their way into market reports or market perceptions. We are naming customer accounts to correct these misperceptions.”
The fight between Microsoft and IBM has been heated for a long time, but now it appears ready to reach new levels of animosity.
For years, Microsoft has relentlessly pounded the fact that it’s the number one developer of e-mail and collaboration software, and it hasn’t been shy about rubbing IBM’s nose in that fact. Earlier this year, Microsoft COO Kevin Turner claimed that Microsoft has eliminated nearly half of IBM’s market share by replacing 13 million Lotus seats over the years, leaving just 15 million Notes seats left–the potential spoils for Microsoft’s business partners to pillage at their leisure.
Microsoft, which has a knack for turning healthy competition into something more closely resembling genocidal warfare, has even gone so far as to say that entire countries have been rid of Lotus software. How charming.
These statements, as you might expect, have gotten under the skin of Lotus GM Picciano, who called Microsoft’s claims “ridiculous and fabricated” in a recent interview with Computerworld. He went on to say that such statements amount to nothing but “hot wind” blowing out of Redmond, Washington, where Microsoft is based (and which, curiously, did have an unusually warm summer this year.)
Unfortunately for IBM, it looks like there’s an equal amount of hot wind blowing out of IBM’s headquarters in Armonk, New York, these days.
Earlier this year, there were some problems in how IBM interpreted a Gartner survey. Big Blue’s initial press release on the topic said Gartner gave it a 40 percent share of the worldwide market for collaboration software, compared to 48 percent for Microsoft. However, IBM had misconstrued the Gartner study, which actually said that IBM had 40 percent of the deliveries of email and collaboration software seats delivered in 2007, not the total global installed base, which is a different number. IBM later changed its press release, but apparently it kept its unique approach to interpreting market share figures and what the definition of “winning” is.
While battling Microsoft dominance is a calling in its own right, perhaps IBM should cool its heels a bit and stick with trying to write good software. Nobody’s going to out-market the Redmond machine, which has the best PR money can buy. Yes, anecdotal evidence says IBM is gaining traction with the version 8.5 release of the Notes/Domino platform, which seems to be well-received by the marketplace. If Microsoft is fudging its numbers, then IDC, Gartner, and other analyst groups should look more closely at how they tally these results.
But IBM isn’t going to win the public relations war with claims that Microsoft is “cheating” (which shouldn’t even be in the power IT businessman’s lexicon; it’s simply assumed you cheat). Instead, IBM should ignore the chest-thumpers in Redmond, try to build on the momentum of Notes/Domino 8.5, and write better software than Microsoft, which is all that will matter in the end.