What's happening in Lotus land?

by Volker Weber

I am confused. There is a discussion going on at Ed's which is already 80+ comments long, and it is going back and forth between "doing things differently" and "you are doing great".

First the facts:

  1. Lotus has the only IBM software that users see. Notes, Sametime, Quickr, Portal, Connections. Users never get to see DB2, Tivoli, Websphere, Rational.
  2. IBM reported that Lotus lost 12% revenue year over year.
  3. Ed Brill says that Notes is winning, with no numbers to back it up, other than that numbers are "up" from 2004 to 2008.
  4. Lotus has a channel on Youtube. This is the most watched video and an IBM marketing manager finds it awesome:

Here is my confusion:

You can't win and lose at the same time. Yes, you can cook the statistics, but that does not change the fact that you are either losing or winning. You can try to "spin" bad news into good news, but that only works for a while until people realize they are being lied to.

The discussion is quite interesting in that some people demand Lotus should market to the end users, meaning "show the product". But corporate IBM never does that. And Lotus, being the only part of IBM that would actually need this kind of marketing, is only making clumsy attempts (see YouTube) to change that.

edbrill.com, a private web site, has turned into the only IBM channel that keeps pushing the Notes message. Yes, there are more Lotus blogs and quite a few good ones, but they are not effective. The official IBM/Lotus sites are boring corporate sites that fail to get any excitement across.

But what is the audience of edbrill.com? I may be wrong, but I think it is read by the Lotus faithful for encouragement and morale, and by a few Microserfs for amusement.

I can only admire Ed for what he is doing. But you need more than one man, or a dozen, to win this. If you want to break out of this cycle, you need to do something radically different. Something visible and dazzling.


Volker, totally agree. But it's interesting what Ed Brill said here -> See Ed Brill comment

"My team has a number of actions underway right now to change the game in the Notes/Domino space. You'll hear some very short term ones in the next three weeks."

Awaiting news.

Albert Buendia, 2009-04-30

Hi Volker,

I may be wrong but I think it's possible that Lotus lost 12% revenue due to changes in the market climate rather than losing out to the competition...less people renewing their maintenance (delaying costs) due to uncertainty and restricted budgets rather than rushing to chuck out Domino and get Exchange and Sharepoint.

As for marketing to users...it would be nice to think that IT departments listened to their users but in my experience that isn't the case. I can't imagine how much effort and cost would be required to create a buzz loud enough to change the messaging or collaboration strategy of any medium to large sized company based on end user wants. I only know I wouldn't want that job! To me all of the marketing should be around demonstrating reduced TCO with the productivity editors and some talk about green computing...running fewer bigger bits of tin which require less power and more importantly don't run a Windows OS. Show the market that with Lotus Notes/Domino you have choices when it comes to areas of your IT budget such as MS Office or server licensing.

Wayne Hoath, 2009-04-30

B2B marketing is a complex issue where you have to meet the needs and requirements of several participants: The purchaser (IT-Department), the actual user, the principal decision maker, the treasurer, even influencers without nominal power...

How much "sugar" each of them needs depends on both, your product and the target organisation.

However, where Volker and Nathan are perfectly right is that one group you can not absolutely not ignore when marketing an an end user product is ... the end user ;)

Lucius Bobikiewicz, 2009-04-30

Sorry, obviously it should read "...one group you can absolutely not ignore ..."

Lucius Bobikiewicz, 2009-04-30

Hear hear. Right on the button as usual.

Lars Berntrop-Bos, 2009-04-30

Wayne, there may be several reasons for the revenue decline. I did not try to explain it but just reiterated the fact as reported by IBM. If you read their financial statement on Edgar, you will see that IBM's total numbers are far better.

The reason I quoted the fact was that I think it is an indication that you cannot only continue doing what you have been doing so far.

Volker Weber, 2009-04-30

@Lucius - I like the sugar analogy and agree with you entirly that there are lots of people to please in order to make a sale - end users included. The problem I see is that end users are very seldom involved in the decision making process (that isn't how things should be but it is, at least in my experience, how they are). Small departmental solutions are sponsored from the ground up but large strategic ones come from the top down. The good news is that right now we have end user pleasing products so at least when they get what they are given they will be happy with it....well we hope they will!

@volker - Change is required for sure. I guess I am just not sure that spending marketing budgets on end users is going to deliver the results we all want to see.

Wayne Hoath, 2009-04-30

Regarding the Lotus number. This isn't the total story, but my understanding is that Lotus has a much higher proportion of non-North American revenue than most other IBM brands and divisions, hence has been hit much harder by the renewed strength of the dollar than the rest of the business.

However, just as I think that the 1Q09 Lotus figures appear weaker than they really are because of currency fluctuations, so were 3Q08 and 4Q08 figures made to look more optimistic because the dollar was weak.

So is -12% an indication of a major problem for Lotus? I'd say not at this stage, but neither were sales as strong as perhaps the figures for 2008 suggested...

Stuart McIntyre, 2009-04-30


I agree, there is probably no large organization where the end user has any formal role in those decision making processes.

But there is also no way the CIO can stick to a technology when the secretaries of the board members or fellow directors complain about it day to day - and that's why I think end user marketing is necessary here.

Anyway, I think the signals Ed Brill is sending out are quite clear and I am quite optimistic about the future direction of this product.

Lucius Bobikiewicz, 2009-04-30

I know I've beaten this poor dead horse until there's nothing but a hole where he used to be, but medium and large companies are NOT the majority. They're easier to make money from because you only have to sell to one XX,000-seat company versus XXX,000 50-seat companies. It's a much lower cost to make the one big sale even though the barrier is several orders of magnitude higher, but I still think it's the wrong thing to focus on.

Charles Robinson, 2009-04-30

I read edbrill.com and it amuses me a lot.

Ingo Seifert, 2009-04-30

@Stuart... I don't think IBM ever loses money on exchange rates. I know the exchange rate IBM uses for Australia is is permanently pegged in the mid sixties when the actual rate fluctuates around the seventies, eighties and nineties. So all that the strengthening US dollar does is remove the excess profits that IBM Head Office have been ripping out of IBM operations in other countries for the last few years and bring things back to reality.

Graham Dodge, 2009-04-30

> The reason I quoted the fact was that I think it is an indication that you cannot
> only continue doing what you have been doing so far.

Well, maybe IBM should listen to the favorite quote of my wife: "If what you're doing doesn't work out as expected, it doesn't help to do more of the same thing. Better try something different."
It's really sad for IBM that edbrill.com is the last bastion of hope for the lost. And if memory serves me well it was you who introduced Ed to blogging in the first place. So what could IBM learn from that? Maybe that they should put more interest in people who actually live outside the box instead of pretending to think outside of it.
I wouldn't go as far as to suggest to hire back some guys who left IBM and who know how to do marketing and had a feel for the customer base (back in the OS/2 days) but it might be something worth thinking about.
I've been a real Notes/Domino fan way back. And then IBM really lost me. I may not be representative but I fear I am. IBM lost touch with the base of their users and at the end of the day that means with their buyers. It's about time they get back in touch.

Stefan Rubner, 2009-05-01

IBM knew how to do marketing in the OS/2 days??? Just like today with Notes, I was deeply involved in using OS/2 -- from where I was standing, it was poor marketing that saw a superior product loose out to an inferior one.

Colin Williams, 2009-05-01

Over the next little bit, I'd like to see IBM put 100% of whatever they have for marketing Lotus at the CIO, CEO level. This is where I have seen mindshare all but evaporate, and it is at this level time and time again I hear 'we have a new CIO.....' and the rest is history.

Adam Osborne, 2009-05-01

I'd just like to see SOME Lotus advertising in this part of the world. Yes yes, we're a small market but there simply aren't enough internal advocates to go around.

Colin Williams, 2009-05-01

I'm a bit surprised to hear you guys talk about Lotus advertising; I didn't think their products existed any more! Ever since Vobis stopped flogging Amipro years ago, I don't recall having seen a yellow box, or an advertisement for one, anywhere.

In fact, the current issue of LanLine has a "Marktuebersicht" on messaging systems. The print version I glanced through last Wednesday does not once mention the words Lotus Notes. I assume their editor simply forgot the product existed a long time ago...

Jan-Piet Mens, 2009-05-01

If I look at the speed IBM is currently able to move Notes and Domino forward it may be better to keep it as it is and suck every penny out of the installed base.

Henning Heinz, 2009-05-01

@Jan-Piet: I don't know anything about the editor's focus, but I know that they lost their test oriented freelance author about the topic (me)... ;-)

Peter Meuser, 2009-05-01

The first 30 seconds of that video has too many catchphrases. I had to stop when the voice said: "I want to stay ahead of paradigm shifts". Bleghh.

Andy Reimer, 2009-05-01

@Andy: you mean to say you didn't find the video "awesome" ? :-)

Jan-Piet Mens, 2009-05-01

Hi all,

somewhere deep down in a long forgotten drawer of mine there is a Lotus Notes 4.x standalone installation CD (or was it floppies?)

Discontinuing the Standalone client is the moment when IBM got it wrong.

With Microsoft the natural development its like this:
Outlook Express (free) -> Outlook -> Exchange

And with IBM just not. Its a marketing nightmare.

Jan Mantkowski

Jan Mantkowski, 2009-05-04

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