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Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

IBM's big win: Panasonic dumps Exchange, moves to LotusLive cloud services

By | January 14, 2010, 3:30am PST

Summary: IBM will tout a big cloud computing win. Consumer electronics giant Panasonic will migrate a total of 300,000 employees and partners off of Microsoft Exchange and other collaboration technologies to Big Blue’s LotusLive platform.

IBM on Thursday will tout a big cloud computing win. Consumer electronics giant Panasonic will migrate a total of 300,000 employees and partners off of Microsoft Exchange and other collaboration technologies to Big Blue’s LotusLive platform.

The migration, which will be detailed at IBM’s Lotusphere conference next week, will start with 100,000 employees and expand to more 300,000 workers, suppliers and partners over time.

IBM is hailing the move as “the largest enterprise cloud computing deployment in history.” Update: However, IBM’s deployment isn’t the largest cloud deployment in history. SuccessFactors landed a 420,000 seat deployment with Siemens and also nailed a 300,000 seat deployment with a large retailer.

There’s quite the dogfight in this space. Google is wooing IT executives to move from Exchange to its Google Apps platform for mail and calendar services. IBM’s LotusLive unit is trying to undercut Google in the enterprise. And Microsoft is duking it out with both Google and Big Blue.

This scrum means nice negotiating leverage for IT buyers.

Specifically, Panasonic will use IBM LotusLive for:

  • Web conferencing;
  • File sharing;
  • Instant messaging;
  • Project management;
  • Email;
  • Calendaring;
  • And contact management.

Update 2: Microsoft had a to-the-point response to the IBM news. In a blog post, Julia White, Director, Exchange Product Management, said:

These claims around Panasonic compel me to shed some light on the real facts.  Panasonic, which has just under 300,000 employees, was already using Notes worldwide, and fewer than 4% of their employees were using Exchange Server – most of them in North America. As with many recent IBM claims, this win is little more than keeping an existing customer. Then again, with a multi-year trend of declining Lotus market share, perhaps keeping an existing customer is a win.

Also: IBM beefs up Lotus Connections with enterprise microblogging

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Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

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Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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RE: IBM's big win: Panasonic dumps Exchange, moves to LotusLive cloud services
homeioy1401-24353655183691126463333317805426 4th Nov
exwhhc,good post!
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Good luck, Panasonic
LBiege 13th Jan 2010
Nice con job, IBM.
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Why the con job
Quebec-french 14th Jan 2010
IBM was there before MS and will be there long
after ms will eat root by the tip.

Everything is a cycle .... mid 80's IBM was
everywhere .. then MS screw they up on OS/2 warp
then now Lotus is back on track and get a kick in
the butt to ms ....

Its a con job its pay back that all
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Revisionist history ...
mwagner@... 14th Jan 2010
IBM screwed up OS/2 all by itself.

Gates was smart enough not to enter into an exclusive relationship with IBM when he first sold them DOS (a product he didn't even own at the time). When Microsoft developed Windows, IBM wanted a piece of the action so they decided to co-develop OS/2 with Microsoft.

By the time Microsoft started to work on the NT kernel, their intent was to build both Windows and OS/2 on top of the same NT kernel.

IBM didn't want the competition and decided to go it's own way. Shortly thereafter, Gerstner joined IBM and wanted to move them back into their core business - SERVICE. OS/2 became a stepchild. IBM screwed themselves on OS/2 and screwed their loyal customers (by not supporting OS/2 long-term - and that's why Panasonic needs to be leery.)

IBM doesn't like to have to sell it's customers Windows and it will do whatever it takes to steal business from MS.

You are correct though, it is all cyclical. Sooner or later someone will displace Microsoft just as Microsoft displaced Digital Research, and WordPerfect, and Lotus, and Ashton-Tate and who knows how many others.

In the end though, Microsoft will not be displaced by IBM. IBM has a different business model. Altogether.

Just as Apple sells a premium product for a premium price to consumers, IBM sells a premium product as a premium price to business.

Microsoft sells software to OEMs who turn around and sell their products to consumers and to business.

Like it or not, IBM is currently dependent upon Micorsoft to meet the needs of many of its customers but IBM simply cannot compete in the desktop software space - and Microsoft cannot compete in the IBM space.
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Good example of revisionist history
hawks5999 14th Jan 2010
Microsoft co-developed OS/2 with IBM and then
walked away taking the knowledge from the
partnership to create the NT kernel. It was as
close to robbery as you could get.
And you are mad to compare IBM to Apple in any
way. IBM does not sell premium software, they
sell premium services and is not at all
dependent on Microsoft for delivery. IBM
refuses to play in a commodity hardware market
(and therefore Lenovo has all client computing
business and is getting more and more into the
server computing business). Did you miss the
part of the article where LotusLive undercuts
Google by $14/user/year. How can you call that
a premium product.
Microsoft realizes all of this and will be
forced by the market to reinvent itself as a
service company over the next 3-7 years. All
hardware is currently commoditized and all
software from the OS up is going toward
commoditization as well. Services are the only
thing that will get a premium paid in many of
our lifetimes.
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The NT 3 kernel was already under ...
mwagner@... 14th Jan 2010
... development when IBM walked away from their partnership with Microsoft. IBM owns all the OS/2 intellectual property. NT 3 was going to be the codebase for IBM OS/2 3.0 right along with Windows NT 3.0 but IBM wouldn't hear of it. IBM severed the contract - not Microsoft.

I always find it amusing that Apple people are incensesd whenever others observe that Apple and IBM (and Microsoft) share some of the same business practices even though they cater to widely different audiences.

Each has their niche and each is served very well (and they serve their customers very well) in that niche.

Many IBM customers rely on Microsoft for their desktop OS and that sticks in IBMs craw (to use and old phrase) but IBM has been unsuccessful in pushing their customers onto desktop AIX or desktop Linux. That's why this LotusLive contract with Panasonic is SUCH A BIG DEAL.

If IBM can use this deal to leverage other enterprise customers away from Exchange, just maybe IBM can make some inroads against Microsoft on the personal productivity side of enterprise machine room. If they can also displace MS Office as a result, then so much the better for IBM.

IBM couldn't care less if Google takes the consumer side of the market. For IBM, the money is in the enterprise machine room.
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One important detail missing.
Lester Young 14th Jan 2010
The falling-out over the OS/3 project was over Microsoft's insistence on making it run Windows applications natively through the Win32 API. That was an extremely short-sighted move on Microsoft's part that imported the classic Windows headaches to the NT platform. IBM wanted no part of that. Looking at the years Microsoft had to spend untangling the mess that arose from that decision, I have to agree with IBM.
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The license sales model is the biggest drawback to Microsoft products right now, and competition from the cloud is likely to force a change.
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Microsoft can compete with IBM
zdnet-gregc 14th Jan 2010
But only indirectly through third party system integrators. Those people do compete directly with IBM and Microsoft should bend over backwards to support them.
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... support those system integrators. That is the reason why Microsoft has been so successful in the enterprise machine room.

Windows licenses may pay the ligtht bill but even for Microsoft, the enterprise machine room is where the profits are.
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Wrong history
davidr69 14th Jan 2010
This is not what actually happened. First of all, IBM's core business was not service; it was hardware. Yes, they supplied the OS on S/36, S/38, AS/400, S/390, etc. and the DB on those platforms, and they provided support for those platforms. Remember how IBM ran Amdahl to the ground?

IBM got into the software business a bit late. Yes, they had clueless executives, but I recall an IBM-MS joint presentation where the IBM rep pitched the OS/2 future and then just disappeared, leaving Bill Gates to continue the presentation with the same message. Instead, Bill took it in a different direction and pushed Windows. IBM was arrogant and stupid, and that's what really happened. On top of that, they had the worst marketing. Remember the OS/2 billboard? "OS/2; it'll obliterate your software!" People thought it was a virus. Sure, IBM bought Lotus in the 90's, and that's when they got serious about software.

More IBM stupidity? OS/2 for the PowerPC. The number of customers who bought it? I quote: "in the single digits." WorkPlace OS - where did that go? Project Monterey? IBM didn't listen to customers and EVENTUALLY began focusing the lucrative services sector.
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DEC?
springerj 14th Jan 2010
I thought MS stole NT from DEC??
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MS stole NT from DEC??
Woned B. Fooldagan Updated - 29th Jan 2010
Well, not exactly, but they did hire Dave Cutler from DEC, who was the the equivalent of chief scientist on the NT kernel in 1988 for NT 1.0. Dave was/is a VMS guru and one of the foremost OS minds in the world. I commercially tested NT 1.0 on DEC Alphas (the only hardware it ran on at that time) vis a vis OS/2 on Intel hardware for Automatic Data Processing, in 1989-1990. It was a phenominal departure from anything anyone had ever seen and was cohesive and smooth especially compared to OS/2s clunky and quirky workplace shell. Microsoft tried mightily to convince IBM that the OS/2 kernel and architecture was not solid enough to use as the foundation for future of their OS refinement and development. IBM, being the marketeers they were, and continuing to be stung by the colossal failure of their PS/2 hardware fiasco, wanted something to sell NOW. MS was telling them it would take another 12 to 18 months to finish development on NT kernel. They could not be persuaded to step back from OS/2. IBM did all they could to scuttle NT. They marched into the sunset pushing OS/2 and you know how that worked out.
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@mwagner
Axsimulate 14th Jan 2010
Speaking of revisionist history. Go watch Triump of the Nerds. Bill Gates himself explains what happened between them and IBM in an interview. And according to Bill Gates, they dumped IBM, not the other way around as you claim.
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IBM is a dinosaur ready for the trash barrel and until they get it thru their ultra-thick skulls that cloud computing is a farce and gimmick, they will continue on their free-fall from computer market. IBM, just doesnt get it, probably will never get it. Best reason they have fallen off of their high horse and are scraping the bottom of the sewer track for business.
the list of stuff that IBM does is huge
I would not kick them out yet ... you could be suprise .

they also said that apple was done too ....look now .
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Marketplace
bigpicture 14th Jan 2010
It is the marketplace that speaks to business success, and
between MS, IBM, and Google. MS seems to be the only one
loosing financial ground, laying off employees etc. in this
"recession?"
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Marketplace
Woned B. Fooldagan 29th Jan 2010
Layoffs mean nothing. Most layoffs are for the purpose of impressing analysts that management is doing something.
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Random anonymous, meaningless insult
DonRupertBitByte 14th Jan 2010
A random poster lobbing unfounded accusations about something he/she doesn't/is paid not to like is so common these days...
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Simple as that. Not tied to the MS platform and Notes servers can run more mailboxes with less cost than Exchange.

Notes Rocks and Exchange is a POS. Simple as that.
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How is that true?
pcguy777 14th Jan 2010
Disk Space is so cheap.. what does your comment even mean in the new low cost world of massive disk storage?

waiting....

If you want to declare war on MS Exchange your gunna need way way more ammo than just name calling kid.
0 Votes
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Sure
itguy08 14th Jan 2010
More mailboxes served per server.
More mail transferred per server.
Better mail file management (discreet files vs a hopped up Access database). This leads to less corruption and easier restores.
Better and free clustering.
Choice of platforms to run it on.
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Sources please?
de-void-21165590650301806002836337787023 14th Jan 2010
Or are you just expressing personal opinion?
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Lotus Nuts user
ElvisHasLeft 14th Jan 2010
Having been forced (by a corporate IT VP who was in love with IBM) to use Lotus Notes for the last ten years I can tell you why itguy08 loves Notes. It is still one of the worst written piece of software in the history of computers. 99% of my computer problems in the office can be solved by closing Lotus Notes. I heard v8 would be better but it's actually taken a step backward. At least Windows is doing a better job of boxing it in it's own space so it no longer blue screens me.
0 Votes
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Need better IT guyus
itguy08 14th Jan 2010
If your issues can be traced to Notes you need better IT people.

The only complaint we have is that 8.5 is a little slow to load but that's because unlike Office (and Outlook) it doesn't pre-load with the OS.
0 Votes
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Different perspectives
motomotosannn@... 14th Jan 2010
I can see Notes being favored by IT personnel,
though, from the end user perspectives the
interface and experience on Outlook is far
superior than Notes. I can bet you Panasonic's end
users (business users) will miss Outlook A LOT!
0 Votes
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[nt]
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Notes Lite or no Notes for me
hawks5999 14th Jan 2010
I feel your pain. Notes is only usable with the
lite (notes.exe -sa or nlnotes.exe) client.
Otherwise it's so slow as to be unusable.
0 Votes
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Srsly?
scottz29 14th Jan 2010
I have worked in a few organizations that ran Lotus Notes, and I have to say that is the worst piece of software I have ever had the displeasure of using.

Wow.
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I must agree.
magallanes 14th Jan 2010
but exchange is the same sh*t.

One of the problem with exchange is it relies on Microsoft technology (windows server) and it s*ck.
0 Votes
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sick?
pcguy777 14th Jan 2010
As in thats totally "sick" dood !!!! What a rad set of wheels ! (as in super cool?)

slang anybody?
0 Votes
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GroupWise?
mikefarinha 14th Jan 2010
While I haven't used Lotus Notes, I have to ask... have you used GroupWise?

Here where I work we use GroupWise and I feel like I'm living in the world of Windows 95.
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RE: GroupWise
gigabot71 14th Jan 2010
Agreed. The only thing worse than Notes is GroupWise. The one place I
had the unfortunate experience of using it was where the IT director was
(inexplicably) a Novell fan. We ended up with Netware and Groupwise.
Novell is a company living in another century. Like using horses and
buggies on the freeway.
0 Votes
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Recently having to use Notes and using GW in the
past gives one an appreciation for Outlook and
Exchange despite how it's users howl. Now when
someone complains to me about Outlook I tell them
to spend an hour with Notes and their heart will
warm with a new love for Outlook.
0 Votes
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Gwise and Notes
brighteyes459@... 14th Jan 2010
I have supported Notes as a IT tech and it is a
nightmare! We just moved from Gwise to Outlook
and while Gwise is better to use than Notes,
Outlook is so very much easier and better to use
than the both of them.

Why go to these difficult programs? If they want
to cut costs, there are free programs out there
that work well. I guess for a big business they
need to have their e-mail management local
however, there must be something else out there?
??

I prefer OpenOffice to Google apps, that is just
me. Google calendar is what I used while we used
Gwise, and it is very good.

Tough to be the people who have to use Notes and
Gwise.... :-b
0 Votes
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Groupwise Rules!
Cyclops116 14th Jan 2010
As an tech and IT Manager I have to say GroupWise server is far superior to Exchange! It's more secure and the back end user mailbox database structure blow away Exchanges single file for all user design! The server hardware needed is also much lower than for Exchange.
I ran 150 users on a Compaq desktop PIII 600 with 512MB for a couple years before they let me buy a real server! Server 2003 wouldn't have been able to start let alone run Exchange on a system like that.
The User end is a bit Windows 3.1, but some of the features it has like actually being able to recall messages from other mailboxes saved my a$$ on more than one occasion.
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Agree ..
pjamieson@... 25th Jan 2010
The neat thing about GW is the fact that you can run it on many OS's
GW back-end can be run on Windows sever, Linux and Netware. Try that with Exchange !
There is also a Outlook client that can be used with GW if you feel so inclined.
The main reason we run GW is that it is not killed by viruses like Exchange is ..
When I worked for a major bank 3yrs ago, our Exchange server was down at least every other month to clear/clean it up due to all the virus crap that it would attract !!
It is not always the most popular piece of software that is the best to have ..
Exchange attracts viruses like a light attracts moths !
And No ... GW has it's issues too .. just not as many as an Exchange server
0 Votes
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notes
rparker009 14th Jan 2010
Is one of the worst email systems out there.
0 Votes
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Notes email is the worst
zdnet-gregc 14th Jan 2010
I have not used Notes since the early 2000's. But unless it has made huge strides in usability since then, I would have to agree.
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Nice point of reference
fsjjunkie Updated - 14th Jan 2010
That's like making a judgement on today MS offering based on your experience with Outlook/Exchange 5.5 or 2000.
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Notes BLOWS!!!!!!!!!!!!!
idjut 15th Jan 2010
being a corporate user for 30 years and have supported and used Exchange for 12, a recent corporate buy out has me using Lotus Notes the past 3 years and I can guarantee you and will bet my salary that Notes is definately the WORST POS software on the planet! It's like grieving for a lost family member everytime you open up the damn app. I shudder with fear on what will happen today with my emails!
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panasonic doesn't know pain yet
archangel9999 14th Jan 2010
Lotus is horrible! One of me clients uses it and it's nothing but problems - it's a POS

Panasonic went for it because IBM offered it for next to nothing to log a "win" - hopefully they have stiff SLAs but it will still be painful
0 Votes
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Even worse than that...
Woned B. Fooldagan 29th Jan 2010
The usual scenario that IBM has survived on, is that they routinely circumvent technical decision managers and go straight to the executive staff to ply with dinners, golf, and vacations. Then the rube exec mandates his minions work with Notes. It NEVER changes. Ever.
Im sure a lot of these decisions are due to cost. Not what's actually more mature as a product. In other words MS, Office is way over priced. Our company is even debating a switch to open office.
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Who sets the price the consumer or developer?
andrej770 Updated - 13th Jan 2010
I don't always understand when people say something is over priced. Who sets the price, the consumer or the developer? It's so typical of todays "give me" consumers to cry that something is overpriced just because they don't want to have to pay for it. The price of office is just fine for me. I get exactly what I pay for. I think MS should do office the way they do Windows 7. Only give you certain features with certain versions all the way down to, you have to pay to bold or underline. Then the complainers can choose which cheap version they want to buy. It's a cheesy idea, but so is always complaining about something being overpriced when you have no control over the price nor have any idea of the cost. Just my humble opinion. Agreement not required!
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Er.. Microsoft already does that..
Wolfie2K3 14th Jan 2010
Microsoft Office is broken down into several tiers - you've got the basic edition (Starter) going up to the full on Ultimate edition with everything and the kitchen sink. And there are already several steps in between.

Need only Word, Excel and Outlook - get Office Basic. Need PowerPoint - get the Small Business edition. Need more - Get Pro or Ultimate.
0 Votes
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Market dictates price
Norm_z 14th Jan 2010
The market sets the price.

Vendors develop products/services at a certain cost. They need to recoup the costs and make some profit for shareholders and pay taxes.

Consumers need to shop around and find the products/services that best meet their needs at the lowest cost. Not everybodies needs are the same.

Vendors in a competitive market keep innovating to find ways to reduce costs so they can sell at lower costs or make higher margins.
0 Votes
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Market dictates price
arcrews@... 14th Jan 2010
Very well put.
0 Votes
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Nope. Not at all.
itguy08 14th Jan 2010
Say you're locked into Exchange....

Had a conversation on licensing with our MS rep (we're not an exchange shop) - this year all renewals are going up xx% but Exchange is going up xx+yy%....

No market dictation of the prices. Just take it or bear the cost of conversion.

No matter who the vendor you are at their whim, not yours.
0 Votes
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nt
0 Votes
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... unless it's a monopoly, of couse.
springerj 14th Jan 2010
Fortunately, the MS monopolies are finally beginning to break down.
Im amazed it's taken so long.
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RE: IBM's big win: Panasonic dumps Exchange, moves to LotusLive cloud services
homeioy1401-24353655183691126463333317805426 4th Nov
exwhhc,good post!

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