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Is IBM Eating Outsourcers Cake With New Notes Hosted Offering?

September 18th, 2008 by Corey Davis

Notes 8 LogoIt was announced today that IBM will be offering a Notes/Domino hosting solution targeted at the SMB market (1,000 – 10,000 seats). aimed at organizations with 1,000 – 10,000 seats.   Bob Picciano, Lotus Software general manager, also stated that the solution would be available to smaller organizations clearly referring to SMB accounts.  Personally, I find it unlikely that IBM will see many wins in the 10,000 seat range with this offering and believe that the sweet spot is the SMB market.  My immediate reaction to this was wondering how this would affect those IBM Business Partners that specialize in managing Domino infrastructures on an outsourced basis.  The affect on large enterprise outsourced agreements are unlikely to be affected, but many outsourcers these days are grappling with the same economy economic issues as everyone else.  To counter this they have turned to outsource contracts in the SMB market, the very market I believe that IBM is targeting with this offering (and if they aren’t they should be!).

Obviously I do not expect that IBM will actively seek out existing customers that are under contract with one of these firms because that is not how they operate.  To my knowledge they have never done this even though IBM Global Services exists in the outsourced enterprise space.

My concern with this is how these moves affect the Business Partner community and how those affects filter down to the community in general.  While IBM/Lotus has generally been very gracious to side-step efforts that would affect the BP’s, I perceive IBM making slow moves that encroach on the BP’s more than they have previously.  This hosting solution is a prime example.  Another is the inclusion of functionality in Notes that mimics existing third-party solutions.  The more IBM encroaches on the BP’s the less they will be willing invest in furthering their Notes/Domino solutions.  The less third-party tools available the less useful and desirable the Domino platform will be to organizations.

I am not against this offering nor am I bashing IBM for making this offering available.  I am simply concerned that if IBM continues to step on BP’s toes that these moves may hurt the community as a whole.

What do you think?

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Posted in Domino, 2,180 views, 4 Comments
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4 Responses

  1. Ray Bilyk Says:

    My former employer always thought that IBM/Lotus did this in the education/training space. I never knew one way or the other…

    It will be interesting to see how this plays out…

  2. Graham Dodge Says:

    Since when has the SMB market covered 1,000 – 10,000 seats? Even the examples on the Wikipedia link you provided max out at 500 seats.

  3. Corey Davis Says:

    Graham — thanks for pointing that out. I was actually referring to the low end of the scale (1,000 – 2,000 seats) but failed to make that clear. I have revised my opening paragraph and hope that it makes more sense now.

    As for the definition on SMB, you are correct that it is generally considered to be in the 500 employee range although it does vary from industry to industry with some defining it as high as 1,500 employees. Here is the link I should have used rather than the Wikipedia one: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf

    This will teach me to make a quick, late afternoon post! :-)

  4. Jerry Carter Says:

    Hey Corey,

    My first thought was back when IBM started rolling out their low cost web development services for SMB. Turns out their definition of SMB was more on the scale indicated above – too big for most of the clients I and many other small BPs were worried about.

    I think many organizations in the 1000-5000 range probably have in house dedicated data services already. We have fewer than 30 people and we ourselves do – granted, we’re in the biz, but still… strong servers aren’t rocket science (no disrespect to my man Mike).

    IBM has typically targeted the higher bandwidth customers where a single engagement can bring mucho dinero and it’s not uncommon to see a small legion of IBMers deployed to the customer site. My guess is they are going after this same “low hanging fruit” and maybe a few other apples and grapes that might like to take advantage of it.

    All in all, it seems more like rounding out their offerings than trying to step on BP toes – unless the BP in question is really rather large itself.

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