Lotus Abandons Domino on NetWare, Raises Ante for cc:Mail to Domino Migration

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cc:Mail to Domino Migration: The NetWare Challenge

by Ron Herardian
©1998 Global System Services Corporation

In a move following on the heals of cc:Mail layoffs, Lotus has discontinued support of Domino on the Novell NetWare platform. Dropping support of the NetWare Loadable Module (NLM) platform further alienates unsatisfied cc:Mail customers, many of whom are already migrating away from the effectively discontinued cc:Mail product line. Lotus' latest move could make GroupWise a more attractive alternative compared to Domino, but a boost for GroupWise could negatively impact sales of Microsoft Exchange more than those Domino.

According to GSS customer data, approximately 90% of cc:Mail customers host their cc:Mail databases on NetWare file servers. Lotus claims that only 60% of cc:Mail customers run on NetWare but the Lotus number does not distinguish between where cc:Mail Router and gateway software runs and where cc:Mail databases are stored.

Exchange Winning Over Domino

Based on GSS data, of cc:Mail customers that are migrating away from cc:Mail the majority are migrating to Exchange. The US Army, US Navy, GE, and Lockheed Martin, are examples. Most are migrating to Exchange as their primary messaging platform. Lotus officials have pointed out, however, that pockets of advanced groupware technology remain in many customer organizations.

Free Clients Weigh in the Mix

Microsoft's Outlook and Netscape's Navigator clients are free. Outlook is also a part of MS Office, Microsoft's second monopoly and Outlook has saturated the channel. The only way Lotus can compete with a flood of free competing products is to make their own client free or nearly free for cc:Mail customers. Lotus cannot compete with Microsoft for cc:Mail migration business while charging for the Notes client.

Lotus has to make Notes and Domino the most compelling choice for cc:Mail customers. According to GSS, what Lotus hasn't realized yet is that they are fighting the path of least resistance. Even where price is equal and Lotus offers superior groupware capabilities, Exchange can win cc:Mail migration business because migration to exchange is technically easier for customers who understand messaging much better than groupware. Lotus has resisted competing mainly on price in the past because the Domino messaging and groupware platform offers other advantages over competing products.

Lotus Gambles Late

Lotus aggressively pushed the cc:Mail to Domino migration message beginning in January of 1998 but Steve Layne who was behind the strategy left Lotus in July. Based on GSS customer data, Lotus' aggressive strategy significantly accelerated the rate at which cc:Mail customers left Lotus as a messaging vendor. In 1997, a GSS article predicted that it was already too late for Lotus to aggressively push cc:Mail to Domino migration. According to GSS, Lotus should have discontinued cc:Mail in 1996 before its competition tooled up and clearly identified the opportunity of preying upon the cc:Mail installed base. Currently, Microsoft, Novell, and Netscape are aggressively targeting cc:Mail customers.

Infrastructure is Key

The key issue in cc:Mail to Domino migration is network and server infrastructure. In the larger enterprises business applications drive hardware and infrastructure requirements. In recent years, however, customers with established hardware infrastructures have looked for ways to leverage their investments. Server products have tended to run on more hardware and OS platforms.

Choice of server platform is good for customers because it enables them to consolidate services not only on a single hardware and OS platform but also reuse existing technical expertise. Domino support of the NLM platform is good for cc:Mail customers because it enables them to provide multiple services through a common Novell infrastructure and through a more closely integrated administrative framework.

Customer Size Critical

Large enterprise customers are willing to run server platforms that meet the requirements of their business applications. Enterprise messaging customers also have the IT organizations in place to support server platforms such as NT and UNIX. For these customers there is a limited benefit in running Domino on NetWare especially because large systems tend to require infrastructure upgrades to deploy any new messaging system. In stark contrast, small and medium sized business can benefit significantly from running Domino on the NLM platform. Small and medium sized messaging customers might now find GroupWise and Netscape/iPlanet servers on the NLM platform more attractive.

Lotus Abandons Small Customers

Lotus' latest move is not so much an abandonment of NetWare or of cc:Mail but of small and medium sized messaging customers. The data suggest that Lotus' market focus is almost exclusively on large enterprise customers. This comes as no surprise over two years after the acquisition of Lotus by IBM. But the change in focus contradicts Lotus' strategy for its business partners, which have been systematically targeted towards small and medium-sized companies since 1997.

About GSS

Global System Services Corporation (GSS) is the leading provider of consulting and professional services for large-scale and distributed infrastructure systems such as email and messaging, directory services, groupware, and wireless solutions. GSS customers include Fortune 500 companies, large services providers and telecom companies, government agencies, major messaging product vendors, and innovative technology startups.

GSS provides a complementary suite of services including strategic technology consultation and competitive vendor and product analysis, product and system architecture and design, system development deployment, customization, and testing, technical support, email migration, and other IT services. GSS has been directly responsible for some of the largest global systems and solutions and counts as customers many of the largest companies in the world.

From its offices in the Silicon Valley California, GSS delivers services and solutions to customers worldwide through a network of mobile consultants and qualified GSS Affiliates. With industry certified professionals on staff, GSS is a Qualified Lotus Business Partner, a Certified Microsoft Solution Provider (MCSP), a Principal Partner in the Sun Partner Advantage program and a member of the Sun Software Partner Council, as well as a member of key industry organizations.

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©1995-2005 by Global System Services Corporation (GSS). Portions of this material are copyright ©1995-1999 by Ron Herardian