News

Microsoft Disputes IBM's Claims in Panasonic Deal

• By Kurt Mackie
• January 19, 2010

IBM's hosted e-mail agreement with Panasonic, announced on Thursday, drew swift ire from Microsoft.

Panasonic plans to connect its employees and partners worldwide with IBM's hosted LotusLive e-mail and collaboration services. In addition, Panasonic will migrate its employees off using Microsoft Exchange Server. That latter detail likely prodded Microsoft to cry foul.

Julia White, director of Exchange product management, disputed IBM's contentions in two blog posts on Friday. Less than four percent of Panasonic's employees had been using Exchange, she claimed. Moreover, the deal wasn't a new customer win but was just an extension of an existing contract. She added that IBM, instead of gaining on its competition, has been experiencing "a multi-year trend of declining Lotus market share."

An IBM spokesperson said that White was wrong on the four percent figure. He didn't cite a number, but just said that the number of Panasonic employees using Exchange was "higher" than four percent. Panasonic was contacted on Friday for clarification, but company officials had not responded by press time.

White also disputed the number of Panasonic employees that might access IBM's service, which IBM estimated to range between 100,000 to 300,000 users. The upper range of those numbers derive from Panasonic's partial acquisition of Sanyo's operations, according to Robert Mahowald, director of SaaS and cloud services at IDC, a consulting firm.

"Panasonic took a 51 percent stake in Sanyo that's going through approval right now," said Mahowald, who added that he talked with Panasonic's CIO about the deal. "So with the users from Sanyo, the number ramps up to 300,000 or so."

Mahowald added that Panasonic was purely focused on meeting its business requirements in making the deal, and that included completely outsourcing all of its Lotus-based collaboration infrastructure. Half of those applications will go to a private cloud environment in an IBM datacenter and the other half will be "part of a more committed LotusLive cloud delivery," Mahowald said. Access to one part of the cloud or the other will depend on the business rules that Panasonic sets up.

Panasonic's CIO was quite happy to outsource the Lotus applications, Mahowald said.

"SaaS is mainstream, especially for steady-state applications where the requirements are well known and the business value is well known," he added. "And companies like IBM have a great deal of proven proficiency in delivering it."

About 20 percent of the business market will use software-as-a-service (SaaS) for e-mail by the end of 2012, according to a prediction made in April by analyst firm Gartner.

"In many ways, e-mail is the 'litmus test' for the SaaS model, disrupting a pre-existing set on on-premises-related businesses," stated Matt Cain, a research vice president at Gartner, in a prepared statement. "We can expect similar third-party dynamics to occur in adjacent collaboration spaces, such as instant messaging and virtual workspaces."

Microsoft has tended to issue strongly worded reactions to IBM's SaaS announcements. For instance, IBM's unveiling of its LotusLive offerings in January of last year caused White to claim that IBM was desperate to prove that its Notes e-mail solution wasn't "dying."

The death of Lotus Notes remains to be seen, but Microsoft is offering some incentives to IT professionals in the interim. On Friday, White described a limited offer of free training for Lotus pros who want to gain skills on Microsoft products, such as Exchange, Office, Office Communications Server and SharePoint. Jobs working with Lotus products are shrinking, she contended, so Microsoft is offering free training to the first 500 Lotus professionals that respond to the offer.