IBM released a $3-a-month, online subscription email service this week, called LotusLive iNotes, and really, it had no choice but to get very aggressive on the SaaS front. I know of at least two big company CIOs that recently left Notes and migrated to Google Gmail or Microsoft Exchange online, after considering upgrades to both on-premises Notes and the existing Notes subscription service that starts at $8 a month.
IBM released a $3-a-month, online subscription email service this week, called LotusLive iNotes, and really, it had no choice but to get very aggressive on the SaaS front. I know of at least two big company CIOs that recently left Notes and migrated to Google Gmail or Microsoft Exchange online, after considering upgrades to both on-premises Notes and the existing Notes subscription service that starts at $8 a month.At a large pharmaceutical company, "Our Lotus Notes platform was getting to end of life," the CIO told me. "The question came up innocently that, given we'll have to spend a lot of money here, is there something we can do that's smarter?" The company is now moving all 115,000 employees worldwide to Microsoft's online, monthly subscription-based Exchange and SharePoint offerings that became available in April. The CIO looked at all options, including online and on-premises versions of Notes.
Meanwhile, a large manufacturing company was stuck with out-dated Notes and Exchange on-premises applications following a merger. A needed upgrade to standardize on either on-premises app was a "difficult business case that never got funded," the CIO told me. In December, the company signed a contract with Google for Gmail. It was cheaper to implement and maintain than onsite offerings, a fit with the company's environmental goals because it didn't require new hardware, good disaster recovery and e-discovery through Google's Postini service, and his IT team would never do another email upgrade.
That's just a few examples; I've got more. You can learn the identities of these companies and read details about their decisions in InformationWeek's cover story next week on Alternative IT, which will also be posted online at InformationWeek and Plug Into The Cloud on Saturday.
Now getting back to IBM…the funny thing is, this isn't IBM's first foray into subscription-based email, despite what many of those news reports out there imply. One year ago, IBM launched Lotus Notes Hosted Messaging, priced at $8 to $18 per user per month, meant for companies with 1,000 to 10,000 employees. Apparently, that offering wasn't doing the job. It didn't appeal to those few CIOs I talked to; they chose Exchange Online or Gmail instead. Maybe a lower price and more consumer-like model will provide the spark that Notes seems to need to be an attractive alternative.
LotusLive iNotes starts at $3 per month, per user on a yearly basis, and is for "small business up to the largest enterprises," according to IBM's press release. The price for customers choosing to pay month-to-month is $3.75 per month. IBM is also offering a free, 30-day trial period for companies that want to test the service before committing to a contract. All plans include access to Webmail, 1 GB of storage per user, mobile device support, built-in spam and antivirus protection, around the clock monitoring, and administration tools. Users can also purchase an additional 100 GB of storage for an additional charge.
Move over CRM, because online, subscription-based email is set to emerge as the hot new SaaS application in the business world. Companies like IBM and Microsoft will have to figure out how to continue to make money on things like $3-a-month email, but hey, that's their problem, right?
One final note: Many in our industry like to mock cloud computing--who hasn't seen Larry Ellison's funny tirade of it on YouTube? And yeah, "cloud" is an easy word to make fun of, we get that. But, as our Oct. 12 cover story will show, through many examples, there is a big shift taking place right now, and growing acceptance of subscription-based email is just one of the outcomes. For those snickering about clouds and water vapor, despite the silly name, you might want to pay close attention to what these CIOs are saying (you know; these are the guys and gals actually making software purchasing decisions) in this upcoming story. Otherwise, the joke may be on you.
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