Lotus reads past the Unified Message

Steve Lewis, general manager of messaging and collaboration at Lotus Development, is fired up over his company's speed to market with unified messaging capabilities for its Domino collaboration product. With Lotus delivering functionality in terms of voice messaging and wireless access while arch rival Microsoft delivers only promises surrounding next year's release of Exchange 2000, Lewis sees a chance to regain momentum in the hotly contested groupware market.

"At a time when the market has commoditized messaging, our ability to deliver on unified messaging and wireless access is part of a larger transformation in the way people engage in collaborative computing," Lewis says. "The trend is to look beyond messaging and focus on higher-value applications."

Recent announcements by Lotus - including a partnership with Applied Voice Technology to provide voice and fax messaging for Domino and provision for wireless access to Domino via devices using the Wireless Access Protocol (WAP) - have put the IBM division ahead in the race to build collaborative software that integrates with a variety of access points. Just how much Lotus will benefit by being first to market is an open question, though, with analysts saying the window of opportunity in the unified messaging business could stay open for a while.

"Unified messaging is not yet a driver for deployment," says Mark Levitt, research director for collaborative computing at International Data Corp. in Framingham, Mass. "The convergence of standards is making it possible to deliver it to the masses, and its availability as a hosted service makes it easier to test and deploy, but the vendors are ahead of what their customers have been asking for."

Even Lewis admits that unified messaging is not yet driving massive volume, but he insists it will be "pervasive" in one to two years. With the next version of Exchange expected 30 to 90 days after the scheduled release of Windows 2000 in February and inevitable lags between release and implementation, Lewis says he's got plenty of time to leverage his leadership - as much as two years, by his optimistic reckoning.

Whatever benefits accrue to market leadership on unified messaging, Lotus is poised to reap them.

"Their execution and their timing has been superb," says James Kobielus, an analyst at the Burton Group. "They have been making a lot of different announcements of really concrete things to do with Domino, building new functionality for the enterprise and service provider market, shipping real products just six months after their last release - and six months ahead of Microsoft. It's very impressive."

At its late-October user group show in Berlin, Lotus unveiled both new functionalities and the partnerships it will use to deliver them to its massive customer base. "Customers don't want to buy and integrate, so we can supply them via the VAR [value-added reseller] or other vendors they already use," Lewis says.

One example: a turnkey product built on Lotus' collaborative infrastructure and AVT's voice and fax products to run on a Compaq Computer server that will be available through Compaq resellers this month. In addition to the unified messaging alliance with AVT and embracing the WAP standard, Lotus has announced enhancements for Domino for knowledge management and solutions aimed at Linux users and application service provider (ASP) customers.

Every advantage counts in the competitive marketplace for collaborative software, which messaging products from Lotus, Microsoft and, to a lesser extent, Novell have dominated. Lotus still has a larger installed base than Microsoft, but Exchange has been growing faster than Domino.

According to IDC, there are roughly 36 million Lotus users worldwide and roughly 29 million Exchange users, but the Microsoft product added 8.1 million new users in the first half of this year vs. 7.4 million new users for Lotus. The two leaders continued to put some distance between themselves and Novell, which added 2.7 million users to reach a total of 17 million users.

"Going forward, all three of the big vendors recognize that there will be diminishing returns in messaging for the enterprise, in part because almost everyone has standardized already on Domino, Exchange or GroupWise," Kobielus says. "Lotus has the lead in unified messaging, but all three vendors are barking up that tree."

That means any advantage Lotus currently enjoys will be short-lived. "In the near future, all three will have similar architectures back at the server, with functionality that is highly modularizable" Kobielus says.

No wonder Lotus' Lewis wants to focus on what's happening now, insisting that the market is already clamoring for groupware solutions far beyond messaging. "The demand is there in all four major areas of collaborative enterprise: messaging and collaboration, Web applications, knowledge management and distance learning," Lewis says. "By design or luck, we have hit the market just as it is about to expand rapidly."

Lewis says major companies are discussing what comes after messaging with him, and that there will be forthcoming announcements from very large companies.

"A number of companies that are now using other people's technology have chosen to move along this path," he says. "A number of the largest Exchange deployments have come to us and said, 'We're looking at alternative strategies.' These are significant organizations that have gone down the Exchange route and are now saying they'll be in trouble if they don't move past messaging."

Users don't have to drop Exchange to enjoy Lotus, Lewis says. "Microsoft has a credible product in Exchange, but it's messaging-oriented, and the new class of collaborative products need more than messaging," he says. "Some people are happy with them, but it's tactical, not strategic. People can't afford to wait to build with Microsoft, and we complement them damn well."

Microsoft did not respond to phone calls.

While Lotus can take some comfort from Microsoft's legendary expanding deadlines for product releases, IDC analyst Levitt points out that Microsoft knows how to play the delay game to its own advantage. "Look at Active Directory," Levitt says. "It was promised years ago and they're still schlepping along, but it has certainly delayed the deployment of competing directories. Vaporware can keep markets from developing."

As the unified messaging market develops, the messaging vendors will have to worry about more than each other. Competition from ASPs, telecoms and large enterprise companies that provide portal services could be a real threat, Lewis says. For the moment, though, Lotus is enjoying the view from the head of the pack.