On Message with Ben Gross

Buying Market Share for Notes

March 31st, 2006

IBM announced a new effort yesterday to win customers away from Microsoft Exchange.

Dubbed Migrate to the Penguin, the new program offers rebates of up to $20,000 to IBM Business Partners and IBM Software Resellers who move customers from Microsoft Exchange to Lotus Notes and Domino on Linux collaboration offerings.

IBM says that in the last two years, it has migrated nearly 3,000 customers from Microsoft Exchange and other email and messaging platforms to Lotus Notes and Domino, and that revenues from it Linux-based email and other collaboration software offerings are growing at more than 200 percent annually. In addition, the company plans to spend $300 million of its $632 million annual advertising its Linux-based offerings.

For its part, Microsoft announced plans earlier this month to spend $500 million effort to win corporate customers away from IBM.

Despite the continued presence of Groupwise, the remains of HP Openmail, and various other Unix-based mail systems, the corporate market has been divided between IBM and Microsoft for several years, and at least in the U.S., the total available market has been saturated, meaning that the only way for either company to grow is to win customers from the other.

While that planned $800 million in ad spending will be welcome in the media industry, it’s interesting to speculate on how much better the world of email might be if that money were spent on actually improving technology and services. Who knows — $500 million might even have been enough to ensure Vista shipped on time.

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