IBM Talks Up Notes/Domino Numbers

January 19, 2009 Timothy Prickett Morgan

With the annual Lotusphere trade show dedicated to the Notes/Domino and related software kicking off yesterday and running until the end of this week, you can expect IBM to be talking quite a bit about Lotus products this week.

IBM already let the cat out of the bag about Notes/Domino 8.5, which was announced two weeks ago with very little fan-fare (that was being saved up for the Lotusphere show, presumably), including support for Apple‘s Mac OS X operating system for the client and server sides of the Notes/Domino combo. The Lotus support for the Mac operating system would have been big news at the Macworld trade show, which was the occasion for the Notes/Domino 8.5 launch, had it not been for all of the concern about the health of Apple chief executive officer and founder, Steve Jobs, and his not attending the show.

Last week, as it was revving up for Lotusphere, IBM wanted to talk some numbers. The company said that in the past 15 months ending in September 2008 (just before the bottom in the U.S. economy dropped out for real), the company had added more than 12,000 new Notes/Domino customers and had boosted the worldwide installed base of Notes clients (in their various forms) by 5 million seats to over 145 million seats. IBM said that more than half of the top 100 countries on the globe are Notes/Domino users, and more than half of the top 100 companies in the United States are as well. (This includes, of course, IBM itself.) IBM’s share of groupware installations at the largest banks, electronics makers, insurance companies, pharmaceutical makers, and telecom companies is above 80 percent, the company said.

Trying to kick a little sand in the eyes of Microsoft, IBM’s main rival for this corporate groupware business, Big Blue cited the latest installed base data from Gartner, which shows IBM having a 40 percent share of groupware seats and a growing share compared to Microsoft’s 48 percent, a share that is shrinking. A decade ago, IBM had about 42 million seats, so the growth has been pretty good. And moreover, the Notes installed base has grown despite predictions that Microsoft would crush IBM. In 2004, Radicati Group estimated that Microsoft had 115 million Outlook/Exchange seats out there in the corporations of the world, compared to IBM’s 83 million Notes/Domino seats; the market researcher was projecting that by 2009, Microsoft would have 200 million seats compared to IBM’s 103 million. IBM has beat that projection, and has done so by embracing various Web technologies and sticking to its knitting.

While Lotus has had its ups and downs as a revenue and profit generator for Big Blue–the situation was not so good five years ago–the division has helped push billions of many dollars in hardware, software, and services in the 14 years IBM has owned the software stack. Lotus has more than paid IBM back the $3.2 billion it spent to acquire it in 1995. That’s for sure.

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