Analyst: Lotus Notes 8 no threat to Outlook

Industry observers have noted Lotus Notes' new and improved features but doubt it will succeed in luring Outlook users from Microsoft

It is unlikely that IBM's latest email client, Lotus Notes 8, will make a dent in Microsoft Outlook's hegemony.

According to Dion Wiggins, director of strategic development at Strat-etech Consulting, Microsoft's dominance of the office-productivity software market is part of the reason for users' reluctance to adopt Lotus Notes as their email client. The Microsoft Office suite bundles Outlook along with its popular word processor, Word, and allows the user to edit email messages with it.

And, although Lotus Notes 8 offers an alternative to Word and includes the OpenOffice.org interface, which allows the user to perform word processing tasks from within the client, including working on Microsoft Office documents, Wiggins is unsure if this is enough to sway Microsoft Outlook users.

"While [the OpenOffice function is] useful, it really depends on the previously installed software. OpenOffice and Microsoft Office are not 100 percent compatible and there are discrepancies between systems," Wiggins said in an email interview.

A Microsoft spokesperson said: "There is a big difference between opening a document and seeing the document just the creator intended... when someone claims you can open an Office document, there is a wide spectrum in quality of rendering the document."

Therefore, a company might need to weigh the cost of migrating to another system, which can be considerable if a company is well-entrenched in one, said Wiggins.

According to Gartner's Market Share: Enterprise E-Mail and Calendaring Software, Worldwide report, both Microsoft and IBM grew their market shares by 10.6 percent in 2006. However, Microsoft still maintains its lead with a 47.8 percent market share, compared to IBM's 42.3 percent.

In January this year, Microsoft launched a set of tools aimed at smoothing the migration of data from Lotus to its own platform, aiming to capture greater market share.

Lotus Notes 8 also sees a considerable update to its previous interface and functions. After a three-year design process, IBM has integrated Lotus' IM client, Sametime, as well as an RSS-feed reader and the OpenOffice document editor.

"We've found that people are far less productive when they have to shuttle between applications, so we've put all the applications that people usually use, like IM, a word processor and calendaring function into one space," said Marty Moore, interaction designer for Lotus software at IBM.

IBM has added a new feature that allows user-built "widgets", which are based on the open-source framework Eclipse, to be placed within the Lotus Notes interface.

"There is a vibrant community of developers building applications in Eclipse, and a user will be able to put third-party applications within Lotus Notes so that more can be done within Notes," said Moore.

Hai Hong Huang, a software research analyst at Gartner, agreed that Lotus Notes 8 will be well received because of third-party applications. "Lotus Notes 8 should significantly improve customer satisfaction in the Lotus customer base — the composite application-development improvements potentially open up rich new possibilities for users," he said.

However, Huang added that Lotus Notes is unlikely to overtake Microsoft, which has a larger share of the small and medium-sized business (SMB) market: "Lotus' base is still concentrated in very large accounts and IBM has not done enough to expand its presence in the larger market — organisations with less than 10,000 people.

"On the other hand, Microsoft experienced double-digit revenue growth for Outlook/Exchange in the past several years mainly because of growth in the SMB segments," Huang added.

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