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Exchange vs. Notes

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Power StrugglesWhen Fortune 2000 companies shop for a messaging/groupware backbone, two names - and sometimes only two names - are all but certain to pop up on the short list: Lotus Notes and Microsoft Exchange.

And that's when the rumble really starts.

Lotus Notes has been the undisputed heavyweight champ of groupware since1989, when Cambridge, Mass.-based Lotus Development Corp. first pushedinventor Ray Ozzie's creation out the door. Prematurely left for dead afterthe Internet's explosive maturation, Lotus Notes continues to sell likecold beer at an August ballgame: Lotus claims it will have doubled itsinstalled base from nine million to 18 million in 1997, with 2.7 millionseats sold in the third quarter alone.

The latter figure represents more copies than Microsoft Corp. shipped ofExchange in all of 1996, its debut year.

However, there is ample reason to believe that the new kid on this blockis growing up in a great big hurry: At the end of the third quarter of1997, Microsoft claimed an installed base of 7.2 million Exchange users.And asurvey earlier this year of 255 organizations in the U.S. and Europeby Framingham, Mass.-based International Data Corp. (IDC) documents theundeniable momentum Exchange has achieved: 28% of respondents reportedusing Exchange for e-mail.

That number is "remarkable for a product that was released only a year anda half ago," says Mark Levitt, research manager for collaborative andintranet computing at IDC. "Bolstered by the related successes of WindowsNT, BackOffice, Outlook and Outlook Express, the Exchange Server is on thetop of many corporate buyers' short lists."

The synergy of the Microsoft lineup will continue to propel Exchangesales, experts say. Particularly important will be the upcoming release ofNT 5.0 and its Active Directory Service, which will free Exchange shops ofthe chore of administering a separate Exchange directory, they say.

"What Microsoft has done well and will continue to do in the future is tomake sure that its own family of products plays together," says Gary Rowe,a principal with Rapport Communication, a consultancy based in Roswell, Ga."There are some real benefits there in terms of driving down the cost ofownership."

On the other hand, groupware power users still look lovingly to LotusNotes, especially since the company has made such a smooth transition fromwhat some saw as a proprietary dinosaur to a full-fledged force in theInternet technology game.

"In an organization that really wants to fully take advantage of thepotential of groupware and collaborative computing, Lotus will probably winout because their high-end capabilities are still superior to Microsoft's,"Rowe says.

Lotus executives and Lotus Notes zealots continue to deride Exchange asbeing little more than a glorified messaging system. Exchange is, however,maturing as a development platform with each new release. Witness a growinglist of independent software vendors that have hitched their wagons andstaked their futures on the product.

Predicting a winner in the Lotus Notes vs. Exchange matchup is no easy task.

"Microsoft probably has a little more momentum right now, but Lotus stillhas a bigger base," Rowe says.

Predicting a loser, however, is relatively easy: That would be everybodyelse.

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