InformationWeek: The Business Value of Technology

Lotus Notes is no longer the only choice.
Microsoft, Netscape, and HP are right behind, while the Internet casts a long shadow.

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By Stephanie Stahl and John Swenson
Issue date: March 4, 1996

Groupware is maturing. Lotus Notes, the revolutionary software that has been synonymous with groupware since its introduction in 1989, faces an array of credible competition for the first time.

Microsoft will roll out its long-a waited Exchange Server next month, Novell is preparing its GroupWise XTD system for delivery later this year, and Netscape Communications is further integrating its World Wide Web browser with CollabraShareconferencing software. Even Hewlett-Packard is joining the fray with an aggressive groupware strategy.

Amid this competitive frenzy, all the suppliers are looking over their shoulders at the Internet. Only a few months ago, the spectacular growth of the Web and Web-based corporate intranets had some analysts predicting the demise of Notes. Now Lotus and other groupware vendors are rushing to integrate their products with the Net. "The notion that a proprietary network can exist in the Internet era is gone," says Larry Moore, VP of inter-enterprise applications at Lotus.

Last week, AT&T demonstrated just how big a shadow the Net has cast on groupware. The carrier pulled the plug on its seven-month-old Network Notes service, which let companies use Lotus Notes across AT&T's vast public network. AT&T cited a lack of corporate demand for a service based on a proprietary network at a time of surging corporate interest in the Internet.

"There are a growing number of Web-centric solutions these days," says Helen O'Connor, VP and director of telecommunications at First Albany Corp., an investment firm in Albany, N.Y., and an early Network Notes user. "Maybe if [AT&T] had been one year earlier, Network Notes would have been more attractive."

Nevertheless, the Internet is unlikely to kill groupware. On the contrary: Gartner Group Inc., an IT advisory firm in Stamford, Conn., expects the reach of groupware-messaging applications to grow from 55 million seats today to 80 million by the year 2000. First Albany's research arm forecasts spending on groupware to hit $4 billion by 1997, up from $1.3 billion in 1994.

Spurring that growth is the desire by users to collaborate within and across corporate walls. Groupware lets users work tog ether on documents, schedule meetings, route electronic forms, access shared public folders, and send E-mail.

Notes, which is the most robust groupware application and runs on most major operating systems, has long had the market to itself. Notes 4, released in January, raised the bar even higher with a more intuitive interface, integrated cc:Mail client-server messaging, field-level replication, and better application development capabilities.

One company vying for a piece of the action is Hewlett-Packard, which plans to combine its OpenMail messaging server with a Web server, most likely licensed from Netscape. The integrated platform will add information sharing, workflow, electronic forms, Web browsing, and other groupware functions to OpenMail's E-mail and calendaring functions. It's expected this summer.

HP intends to follow up in November with its own groupware client to help users take advantage of these services. The software will run on Microsoft Windows, Unix, and the Ap ple Macintosh.

"We are developing a unique client that will capture 80% of the features [of Notes]," claims Raul Mujica, marketing manager for enterprise messaging at HP. Mujica also says HP plans to put a Java-based development layer on top of its OpenMail interface to give users a more robust application development environment.

HP's plan marks a shift in strategy. The company formed an alliance with Lotus in 1994 with the intention of marketing Notes as its own groupware standard, but that relationship has soured. "We consider Lotus more of a competitor than a partner now," says an HP executive who requested anonymity.

But analysts fear HP is too late. "OpenMail is a great, scalable mail system, but they are so far behind the eight ball," says Mike Rothman, an analyst with the Meta Group in Reston, Va. Rothman and others expect Lotus, which was acquired by IBM last year, and Microsoft to dominate the groupware battle.

After numerous delays , Microsoft's groupware platform, Exchange, finally is ready for prime time. While it's not truly comparable to Notes, several large companies are betting on the Windows NT-based platform. British pharmaceuticals maker Glaxo Wellcome is migrating 35,500 employees from a variety of E-mail systems to Exchange. Glaxo hopes the switch will help create a flatter organizational structure that will ease communication and collaboration.

Intergraph Corp., which has 4,500 employees using an early release of Exchange, likes the product's public folders and automatic filtering of incoming messages, says Garth Keesler, messaging architect for Intergraph, a maker of graphics hardware and software in Huntsville, Ala.

The battle between Exchange and Notes may be over quickly. "Most large organizations will do their evaluations this year and start rolling out a new system next year," says Gartner Group analyst Tom Austin. "This is going to be a very fast war."

A key factor that w ill help users decide which platform to choose will be how vendors embrace the Internet. That's because many companies are starting to rely on intranets to connect employees, customers, and suppliers to vital information. A recent survey of 170 companies by the Business Research Group in Newton, Mass., found that nearly a quarter have implemented or plan to implement the Web internally. An additional 20% are thinking about it.

As a result, by mid-1996 Notes will include native support for key Internet protocols, including HTTP, HTML, and Java. That means Notes servers and Notes data will be accessed by Web browsers as well as Notes clients, and Notes databases will contain HTML pages as well as Notes documents. "We do not compete with the Web and we do not complement the Web," says Mike Zisman, Lotus' CEO. "We are part and parcel of the Web."

Companies including CompuServe, US West, and Australian telecom carrier Telstra already have linked their Notes servers directly to the Internet. Even AT&T, despite its shutdown of Network Notes, isn't abandoning Notes itself. Sources say the carrier plans to deploy Notes servers on the Web as part of its Internet services.

Users such as First Albany see different applications for Notes and the Internet. The firm uses an internal Web site as a bulletin board and to distribute software, but uses Notes for much more complex applications such as publishing and workflow.

Internet support also is an important piece of Microsoft's Exchange strategy. Exchange will ship with native SMTP support, allowing users to exchange E-mail over the Internet without a gateway. But two key features will be late. One is the World Wide Web Connector, designed to let users view public Exchange folders with their Web browser. The other is Exchange NetNews Connector, which lets Exchange users access Internet newsgroups.

Meanwhile, Exchange will offer a key component called the Internet Mail Connector, which, among other things, aut omatically decodes attachments to incoming messages. It also will include em- bedded URL support, allowing users to access Web pages from E-mail messages.

As the Internet frenzy continues, there's no telling what the groupware market will look like in the future. The only sure thing is that groupware will no longer be synonymous with Lotus Notes.

See related story on Notes vs. Exchange in Open Labs

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