Lotus eyes untapped markets with new messaging system

By Stacy Cowley, IDG News Service
May 20, 2003 08:04 AM ET

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IBM's Lotus software unit Tuesday was set to release a new, entry-level corporate e-mail software package which the company hopes will introduce the Lotus brand to new customers and help rekindle the division's stalled growth.

IBM Lotus Workplace Messaging, announced in January at the company's annual Lotusphere user conference and now available worldwide, is a Web-based e-mail system aimed at the "deskless" workforce, such as production-line employees and retail clerks.

Unlike Lotus' traditional, fully-featured messaging products, which includes its well-established Lotus Notes suite, Workplace Messaging is a stripped-down system. Simplicity is intended to be the software's key feature, both for users and administrators, according to IBM.

The software's price tag is also supposed to be a major selling point: for volume buyers, Workplace Messaging's long-term cost can drop to less than $1 per user, per month, according to IBM. The software's retail price is $29 per user, which includes a one-year maintenance contract. In subsequent years, annual maintenance costs drop to $5.80 per user.

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The Lotus unit has been one of IBM's weaker spots since the industrywide economic slump began. Revenue has been flat or down in many recent quarters, and IBM Chief Financial Officer John Joyce has warned analysts that the company anticipates slowing new license sales in what it sees as a mature market.

In January, IBM shuffled Lotus' management, replacing general manager Al Zollar with Ambuj Goyal, who had most recently served as general manager of solutions and strategy for IBM's Software Group. Zollar took charge of Lotus in 2000, five years after IBM acquired the company. IBM initially left Lotus to operate autonomously, but under Zollar the company stepped up integration efforts, modifying the Lotus' head's title from CEO to general manager, and repositioning Lotus as one of several brands within the IBM Software Group portfolio.

A 20-year veteran of IBM, Goyal said his task is to use his deep knowledge of IBM's software organization to add new products to the Lotus line-up, and to tap new markets for IBM's messaging and collaboration software.

"Al's primary role was to integrate Lotus into IBM. My role is to expand the base and to grow Lotus," Goyal said in a recent interview. "We need to find out a way to get to more people in more ways."

The market Lotus is aiming at with Workplace Messaging is certainly a large one - messaging and collaboration research firm Ferris Research estimates that about 30% of the workforce in developed countries falls into the deskless category, totaling some 300 million employees worldwide. What's less clear is whether the companies employing those workers really need to provision them with e-mail.

Analyst David Ferris, president of Ferris Research, says he finds it hard to predict what kind of reception Workplace Messaging will find among buyers.

"I really don't know how well it will do. It will be interesting to see. I think there's been a need to help these deskless workers for several years now. You'd think companies would want to provide e-mail for them; the question is, how many (will want to do that), and when," Ferris said.

The IDG News Service is a Network World affiliate.