Notes-Exchange turf war heats up in M'sia

MALAYSIA--As Microsoft seeks to loosen IBM's grip on Malaysia's messaging market, Big Blue is protecting its turf by dangling various incentives before software resellers and consultants to dump Microsoft Exchange Server for IBM's Lotus Notes and Domino.

With Microsoft scoring several high-profile wins--including Petronas and Celcom--in luring Notes customers in Malaysia to Exchange Server, IBM is not taking the onslaught lying down, especially after Microsoft CEO Steve Ballmer threw down the gauntlet last year by declaring that IBM's Lotus Notes customer base is "ripe to be plucked".

IBM is offering a rebate of up to US$20,000 for its partners in Malaysia that successfully move customers from Exchange to Notes and Domino on the Linux platform. The "Migrate to the Penguin" initiative is an expansion of IBM's global Move2Lotus program which promises to hand out US$20 for each licensed Exchange user, with a maximum of US$20,000.

IBM software partners are also offered free education and certification to help them update their Lotus Notes and Domino skills to version 7. And to further entice customers to make the switch, Big Blue is offering a new "try before you buy" service where businesses can trial the software in a hosted environment.

According to Lee Kwee Heng, IBM Malaysia's country manager for Lotus software, IBM holds leads the messaging and collaboration market in Malaysia and endeavors to retain its customer base through innovation.

Lee said the new migration programs build on the momentum of Lotus Notes and Domino 7, and noted that the company has seen one of the fastest adoptions of a new version in Lotus Notes/Domino history. It contributed to a double-digit revenue growth for the Lotus portfolio in 2005, he added.

Ask about the response so far to these new initiatives in Malaysia, Lee did not provide specific figures but said there has been "positive response from business partners to customers".

"In the last two years, IBM has migrated nearly 3,000 customers [worldwide] from Microsoft Exchange and other e-mail and messaging platforms to Lotus Notes and Domino," he added. During that period, Lee said, major companies from Malaysia's securities and banking sector, government-linked organizations and large insurance companies have migrated from Exchange to Notes.

Microsoft claims migration, too
Microsoft's Malaysian office, however, also claimed to have clinched "significant wins" for Exchange in the telecommunications, oil and gas and government sectors over the past year or so.

Industry sources said Microsoft staged a major coup recently when Malaysia's national oil corporation Petronas decided to migrate to Exchange from Notes. Petronas, which has about 17,000 e-mail users, is perceived to be one of IBM's biggest Lotus Notes accounts in Malaysia.

According to Microsoft, a recent IDC survey covering 241 respondents in Malaysia showed that the company is garnering a lion's share of the messaging market.

Raveesh Gupta, Microsoft Malaysia's business group leader of the information worker division, said: "Based on the IDC Asia-Pacific Software Forecaster, until first half of 2005, Microsoft captured approximately 48 percent of the messaging market share with fast growth [recorded] on Exchange 2003."

"And since then, there have also been significant wins in the various telco, oil and gas and government sectors which are not reflected in [the IDC] report released in March 2006," Raveesh added.

The same report revealed that IBM Lotus Notes/Domino had a 12 percent share of e-mail servers used by the respondents, he said.

He pointed out that Malaysia's incumbent telco, Telekom Malaysia, has about 20,000 employees using Microsoft Exchange's push-mail function.

Raveesh said that Malaysia's mobile operator Celcom also improved its operational efficiencies since the company's mobile workforce migrated from Notes to Exchange 2003. "Celcom also generates revenue through their 'E-mail and Beyond' push-mail services with Microsoft Windows Mobile," he said.

According to the company executive, Microsoft Malaysia is working hard to ensure customers who are still running older versions of the mail platform including Exchange 5.5. and Exchange 2000, will not migrate to rival platforms.

Raveesh explained: "For those who are still on older versions, we are continuously working with them to stretch their IT investment further whilst also addressing security-related issues that may be on their current systems.

"We are helping them build better plans to look at more advanced messaging systems, namely Exchange 2003 or Exchange 2007," he added. Microsoft is confident that the launch of Exchange 2007, with its promise of unified communications and collaboration, will herald its domination not only in the Malaysian market, but across the region as well.

According to Raveesh, businesses are beginning to see the bigger picture of innovation provided by Microsoft's Unified Communications and Collaboration framework. "This an approach to unified communications which will break down today's silos of e-mail, instant messaging, mobile, voice over Internet Protocol, and audio-, video- and Web conferencing," he said.

According an IDC report released in July 2006, worldwide revenue generated by sales of integrated collaborative environments grew by 12.3 per cent to reach US$2.1 billion in 2005. The top two vendors, Microsoft and IBM, captured 92 per cent of total market revenues and generated double-digit revenue growth in 2005.

Lee Min Keong is a freelance IT writer based in Malaysia.