Lots of people have sent me links to news coverage of Microsoft's official announcement yesterday of Microsoft Online, including their hosted Exchange offering.  I was especially interested in Tom Foremski's view on ZDNet, because he sees it for what it is

Ron Markezich, corporate VP of Microsoft Onlne said, "Two-thirds of our users are using our Online Services because they want to move away from Notes."

It can cost corporations as much as $1,000 per user to move away from Notes. By signing up for Microsoft Online Services it is a quicker and cheaper way to move to a different solution.

Microsoft's Online Services Group might be better renamed the Lotus Notes Migration Solution Group!
Well, it's quicker and cheaper, but does that make it a good idea?  Microsoft has been aggressively promoting Exchange Online at existing Lotus customers in the last few weeks...it's the "play du jour" for their sales team.  Why?  Because for the last four years that Microsoft has been running their Notes Compete program, nothing else has worked, so they might as well try this approach.  Nobody really knows if it is a good idea, if they truly will save money, if the system will be reliable, if it will work globally, what happens to their data if they stop using the system, and a myriad of other issues.  Still, since nothing else has worked, Microsoft is trying to play the fixed cost game and get CIOs to focus only on the per-user per-month hosting cost, which is still only a portion of the total cost of ownership.  And in the media coverage as well as the discussions that are taking place, Microsoft is desperately trying to keep the focus and scope to e-mail only.  Why?  Because they've completely given up on the idea that Notes applications can be migrated, so now with a hosted mail offering, they try to attack the commodity piece of the equation, hoping to bite off something rather than nothing.  And they know they need to do it now, because if you are already deploying Notes 8, the last good reason they've ever had to have the migration discussion -- usability -- is out the window.  

I met a customer earlier this week who said that their Notes 8 deployment is growing virally, as users see others in their organization running Notes 8, ringing up IT, and saying "I want that!"  When is the last time that happened for Notes?  This is incredible validation of Mary Beth Raven's leadership and the entire usability effort that went into Notes 8.  So, Microsoft is quickly running out of candidates to go after with their last remaining arrow in the Notes Compete quiver, and they come up with....
One of the early customers is video retailer BlockBuster, which has been using Exchange Online for about six months. Blockbuster CIO Keith Morrow said in an interview that Microsoft's online services came at a good time for the company, which was on a several-generations-old version of Lotus Notes.

Morrow said the video rental company needed to make a change of some kind, and the option to move to Exchange without having to bring that skill set in-house was a key selling point, as was the ability to offer better mobile options, including Outlook Web Access and iPhone support.

Another Notes switcher in the crowd was Eddie Bauer, which has been a Microsoft Online customer for about five weeks. Chief Information Officer Rich Mozack said the clothing retailer wanted to move off Notes but couldn't make the numbers work to run Exchange on its own.

"We just couldn't justify the up-front investment," Mozack said.
Of course you couldn't, because I have yet to see, in all my years of this competition, a real, valid business case for migrating -- and even less-so as the market has moved on from e-mail being a strategic tool and towards collaboration.

That last quote was from CNET, "Microsoft aims to be a good host".  But the CNET reporter missed an important detail, which Information Week picked up:
"On a Friday, 1,400 of Eddie Bauer's associates went home as Lotus Notes users, and on Monday they came to work as Outlook users with Microsoft Online Services," Rich Mozack, CIO at Eddie Bauer, said in a statement.
1,400 associates?  Wikipedia says that Eddie Bauer has 10,000 employees.  So what's the real story here?  Were those 1,400 users retail store clerks and warehouse employees, who perhaps just need a basic mail experience?  Did they consider Domino Web Access?  What are those 8,600 other users using (something tells me it was never Lotus Notes...)?

As usual with Microsoft, there's a lot more to this than meets the eye.  I am somehow reminded of their Lotusphere spoiler release in 2006, where Microsoft trumpeted the decision of retailer CompUSA to migrate from Notes to MS.  Like the Blockbuster story above, CompUSA was a retailer whose very business model was under attack, and they had challenges with Notes.  Rather than hire a housekeeper to clean up their current mail system, they decided, at a time when they likely could not afford to, to go buy a new house (if I finish the metaphor, they also had a sub-prime loan).  Microsoft Online is just their latest attempt -- you don't even have to build the house yourself, you just move in.  What happens when we find the mold in the walls?

If you find yourself in the situation where Microsoft is trying to sell you a new house in the neighborhood known as "the cloud", let me know.  We've assembled the executive-level materials to show that IBM has a better idea -- solving your business problems.  Whether that involves cleaning up your current premises-based deployment, our own Lotus Notes Hosted offering, working with a business partner, outsourcing, or something else creative, I promise we can do better -- whether you are a current Notes customer or not.  More importantly, we will focus on collaboration as a strategic advantage, not just a way to try to negotiate your payment like that used-car salesman.

Link: ZDNet/Tom Foremski: Microsoft's cloud is more about Notes migration and less about a new IT architecture >

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  1. 1  Andrew Pollack http://www.thenorth.com/apblog |

    On this I agree completely.

    Microsoft's entire business strategy is about the interdependency of all their products. It has always been that way. In the early 90's, they published their foundation library for Windows as an extension to C++ that let you get products to market months faster, but cost you cross platform compatibility. In short, you gave up the ability to write once and recompile on Mac and Unix platforms, but you got the ability to hit the biggest market segment that much faster. They took over the entire industry as a result almost killed Apple (Apple helped, but that's another story).

    Microsoft doesn't care if you get hooked on SQL Server, or Office 2007, or Exchange. Get hooked on one, you have to buy them all -- and upgrade them all, every time you upgrade one of them.

    Why would their idea of Cloud Computing stray from that?

    Cloud computing will ultimately win the day. I think its years away, but it will be how we all work one day. To get there, one or two frameworks will have to emerge that provide an open set of common services. Something like the love child of Adobe Air and Java -- or maybe vs.NET and Google API. Some combination of front end flexibility, back end open (but secure) services, and government backed identity authentiction will all have to come together. I'm not holding my breath, but it will come eventually.

  1. 2  Sean  |

    I find it amusing that Microsoft have shot themselves in the foot by announcing that it can "as much as $1,000 per user to move away from Notes" (presumbly to Exchange)...

    So dear readers, next-time someone in your company or an external consultant suggests that you migrate from Notes, simply quote Microsoft to them!

    Somehow a $1,000 per user simply to replace existing functionality (if you're lucky) doesn't seem a good-idea in these credit-crunchy times.

  1. 3  Neil Wainwright http://www.nexonia.com |

    If it's apps and the Notes 8 UI that keep people from leaving Notes, then it's apps and Notes UI that should be the driving forces for the present and future. Anything that makes apps look better, all the better. A new UI rendering model (WebKit anyone?), better app deployment/integration, simplified tools for making Notes apps (existing ones too) look better and of course a continued push on the Notes client UI would all be well-received. Maybe a "Notes app modernization" push from IBM? Make your apps looks and perform better? Most older apps work pretty well but look like crap, so maybe the tools and ideas to help customers with those will serve IBM well? I can think of practical low-cost tools that IBM could provide that would help the installed base quite a lot. Just my two cents.

  1. 4  Andrew Pollack http://www.thenorth.com/apblog |

    @3 -- Amen. If 8.5 was about the server, than maybe we'll finally see the client UI love in the next major cycle.

    In the mean time, diving head first out the 10th story window that is a Microsoft driven cloud computing strategy clearly isn't the answer in my mind.

  1. 5  Keith Brooks http://www.vanessabrooks.com |

    Guess it's time to short Eddie Bauer and Blockbuster(well Blockbuster was already on verge of failing).

    Compusa, Home Depot and so many others face a terrible time of it after moving away from Notes and Domino.

    It just continues, sad really, you would think they would get the idea by now.

  1. 6  Darren http://www.dadams.co.uk |

    Ron Markezich, corporate VP of Microsoft Onlne said, "It can cost corporations as much as $1,000 per user to move away from Notes".

    A guy from Microsoft said it can cost $1k per user to migrate. Remember this next time Microsoft supply a $300 license to a Notes customer and that customer says it's cheaper to move to Exchange because they own the licenses. How do they claw back the other $700?

  1. 7  Kevin Mort http://www.theglobalmind.com |

    Different tactic same strategy. And MS people honestly tell me no one at MS cares about Notes.

    I always find it funny that running a several versions old install of ND is reason to migrate. Really? For some reason actually upgrading to something current doesn't get any consideration.

  1. 8  Capitano Stella  |

    not sure I got the point when you said: " Because they've completely given up on the idea that Notes applications can be migrated"

    It sounds like an hard vendor lock-in, is it correct?

  1. 9  Andrew Pollack http://www.thenorth.com/apblog |

    @8 - the data is freely and easily migrated. The functionality can't be because frankly there's nothing out there that is as easily to work with for it. Maybe when xml databases finally come around it might work out.

  1. 10  Bill Medley  |

    The section that really made me laugh in this article was this paragraph:

    "The software maker said last year that it would offer the hosted option for large businesses, later expanding the offer to businesses of all sizes. At last month's Professional Developer Conference in Los Angeles, Microsoft also confirmed that it would offer Web-based versions of its Office applications, including Word, Excel, and PowerPoint."

    Ok so what happens when Office products get placed into the MS cloud. No local client install with an added monthly per user charge for use of the applications. There is something to be said about not having to roll out new software to the desktop, but what will happen to productivity when lets say someone who travels as much as Ed, is now unable to work on his powerpoint presentation on one of his 18 hour flights around the world, because not all airlines are offering the ability to do cloud computing while(forgive the pun) flying through the clouds.

    Good thing we have such a great product in symphony.

  1. 11  John Rowland http://enterprisingnotes.blogspot.com |

    In the article referred to, Tom F states the obvious but makes no comment about it's business value or wisdom. It would be great if guys like him who point out what is really behind MS's strategy also raised the question of value. As is is, seems I have to get that side of things from my Notes pals.

  1. 12  John Stack  |

    At least in a way. I liked the announcement about the cloud but I also attended a great TIE panel presentation on SaaS (which included IBM's cloud play) in October. Both seemed cogent but different.

    To me, no matter who does it, spending money on infrastructure doesn't make sense if there are viable options. Both IBM's Dave Mitchell (Director, SaaS) and Ray say that it makes sense from a variety of different viewpoints and that the market is truly warming up to the notion.

    Who can tell me that infrastructure provides business value (that can be measured in ROI? My corporate experience tells me its a cost center. Some of it is just the cost of doing business and its the responsibility of the CIO's office to find the solution with the highest benefit for the least cost.

    So, don't you think that long term, Lotus won't do a SaaS model? It could - really easily - if IPSec was more easily handled, right?

  1. 13  Ed Brill http://www.edbrill.com |

    This $1,000 per user line from Microsoft is going to be pretty useful. The Exchange Online service isn't available around the world, and there are plenty of customers where MS is still pursuing the discussion around why they should migrate premises-based from Domino to Exchange. "Microsoft themselves say that is going to cost you US$1,000 per user, what are you thinking!"

  1. 14  Peter Wilson  |

    > incredible validation of Mary Beth Raven's leadership and the entire usability effort that went into Notes 8

    Yes it is a validation of Mary Beth's team... it's also a validation of common sense. Make an product that people use the majority of their day easy and common sense to use and of course they will want to use it. I really wonder if the developers understood this until version 8. Well, maybe they did but they were off concentrating on some Domino feature or some new NOTES.INI setting :-)

    So keep up the good work. Keep looking at how easy email really can be. Keep it simple.

    Pete

  1. 15  Mike Lazar  |

    @10 -- You're not thinking about the "normal" user. The general rule is 80/20, but in this case, it might even be more like 90/10 or higher. 80% of your users won't need local installs because they don't travel on business, ever. It's really higher, to be honest. Take it at 90/10 for a 5,000 seat customer. Now, instead of an insanely daunting 5,000 user upgrade to the latest and greatest client (pick any...), you are really dealing with 500 or fewer high power users. That's far more manageable. For the other 4,500, they get to the office, log on, work, log off, and go home. They can go home on Friday using Version 1 of software and come to work on Monday morning with Version 2 online. That's a very compelling argument to look at cloud based services of any kind.

  1. 16  Samuel deHuszar Allen http://www.essentialforms.com |

    @1 Meh. Cloud computing definitely has value for some businesses, and some parts of some businesses, but the problem with cloud is that you never really HAVE your data or tools.

    Will Google or Microsoft make effective backups of all your account data? If not, then I'm back to needing some sort of local infrastucture again.

    How will clients be able to ensure compliance and security on systems they can't control? What happens for end-users who need offline capabilities?

    I take the El in Chicago every day. Because of Blackberry push services, and basic Notes replication with my Domino server and an offsite Domino failover (which doesn't cost me any extra licenses because I have Express licenses) 'both of which I own and control' I can always be sure (or as much as can reasonably be assured) that I will have access to some form of my communications, and I have all the relevant documents locally on my laptop in an encrypted database.

    Microsoft's solution is to get customers to trade up(?) Notes and Domino for an unproven competitor to iNotes. I really don't see a tremendous value proposition for more than a few major clients, but a lot of risk.

    I'm not sure how the cloud "wins the day" in this environment or any forthcoming. If you mean to say that data will become more persistent and not necessarily be teathered to a specific laptop or desktop, that's one thing. But handing your (often sensitive) data and means of managing/producing new data off to some cloud service provider who may decide to or accidentally/unintentionally sever my access is never going to be an acceptable solution for MANY MANY businesses.

    @3 Tools would be great, but tools can't make programs by themselves. There should be some kind of learning guide(s) produced for walking devs through these paradigm shifts. I've been asking for learning guides along these lines for a long time. Ed, I know you've heard me say this ad nauseam, but if IBM could start investing in Head First (a publishing company owned by O'Reilly) style learning guides, not just for folks who are new to Notes development, but also for those who are trying to make sense of how to leverage these new tools that keep getting released then I think you'll see more upgrades quicker, and fewer demands for migration. Stuff along the lines of:

    What do I need to know how to do to use feature X?

    What don't have I have to use anymore now that XPages or whatever has been introduced?

    There are tutorials on how each component works, but not how to think about how they work in relation to the rest of the platform, or why I might want to approach development in a new way, or what that new way is or should be. There are mostly reference guides and VERY simple tech demonstrations of how to make component X 'go'. Nothing that inspires creativity, or confidence for that matter.

    @10 I agree that Symphony is shaping up really nicely, but wouldn't it be cool to have the OPTION of running it (or some subset of it) through a browser? Symphony Ultralite anyone?

  1. 17  Dave  |

    Just yesterday we had a 2.5 hour presentation (via live web? and phone hookup) with ppl from our Head Office and some MS consultants. They are gathering data for a feasibility study. What they presented was exactly the Online cloud scenario using Outlook, sharepoint etc etc, selling the whole no cost up front deal. There was nothing new in what they offer in that we can do everything and more with Notes Domino (8.0.2) BUT we are only 1300 ppl of a 70,000 company and Head Office in Europe and US are on the MS bandwagon. No mention of conversion costs, they think they can port all our notes apps to Sharepoint. Thats such a backwards step ... Oh well, we may well get shafted by GHO if the $ signs win the day (though I cant see how at all it could be justified)

  1. 18  Gavin Bollard http://dominogavin.blogspot.com/ |

    It's interesting how Notes 8 is growing virally... I was quite astonished yesterday when you asked how many people were running Notes 8 on their desktop. Based on similar experiences with Notes 7, I expected very low numbers. How wrong was I? More than half the room had started on Notes 8 deployments.

    In any case, we've resolved many of our Notes 8 "issues" but have decided to build our next SOE image (currently in progress) with Notes 8.0.2. If nothing else, it will encourage us to work out the final issues. Obviously with so many people using Notes 8, the issues we have must be with our own setup.

    In any case, we're installing the Eclipse version but creating two icons in case we feel the need to fall back to the basic version.

    I still can't figure out the Microsoft vision. Don't they realise that Notes is more than mail. Sure we could switch to exchange but what are they going to do about all our Notes applications? Adding a new/competing platform just doesn't make good business sense.

  1. 19  Bruce Elgort http://elguji.com/ideajamtour |

    @Gavin,

    Where/how do you attribute to the viral growth of Notes? I would be interested in hearing your take on this.

  1. 20  Andy Steven http://www.uptime100.com.au |

    I agree with the comment about the applications, merging an app with email is simple, powerful and affordable to businesses with 20 or less users (my main market).

    This week I have been on the road showing people 8.5 (on a Mac!!) with some simple apps, sexy looking ones, that help them get info out of email.

    The response has been awesome, people have not idea how powerful a sidebar widget or a simple postsave script on your memo form can be.

    I have also prepared a 5 minute presentation using some radicati quotes and other usability bits and peices and make people realise that email is their major problem, then I introduce Notes.

    That's also the problem with the hosted model, no cool customisations. I find every business wants flexibility..

    Andy

  1. 21  Giulio  |

    @Gavin. M$ DO know that Notes is more than mail.. But they sure as hell don't wanna tell un-suspecting prospects that. Because they know the sale for a full replacement gets quite hairy with licensing.

    If they did metion it, it would create more work and add risk to win the "migration". (And I use that term loosely, as we know "migration" in most cases means a virtually indefinite double-licensing of for Domino and Exchange).

    @Ed, do you have any case studies/reports of those who have "returned to the fold" after their indiscretions with Exchange ? That would make a good follow up to winning business....

  1. 22  Bill http://www.billbuchan.com |

    Some MS Success stories:

    Halifax and Bank of Scotland merged before 2000, and both publicly stated that they'd migrated from notes to Exchange beforehand. After the merger, both CIO's guiltily admitted to each other that they still ran notes. Now, NINE years after the migration, they STILL run Notes (on zSeries no less) with a 99.99% uptime. Their merged Exchange 2003 system however is as stable as chocolate underpants, and MS have told em that the only way that they can get stable is to migrate to Exchange 2007 (which is how they got to Exchange 2003 in the first place). Meanwhile, with little or no investment, Notes keeps chugging away, servicing tens of thousands of users.

    At Philips, we migrated 100,000 users from 25 separate eMail systems to Notes in 1999. All in a year. And it all worked, and worked well. I have a letter of thanks on my wall for that. During this setup, we were asked to construct a domino SMTP server that would deal with MILLIONS of emails an hour. Which we did. About 10 years ago (we did that work in 97,98). Move forward to 2005, and the Philips CIO - annoyed at IBM (aren't we all), stated that Philips would move to Exchange, and engaged HP to do the deed. THREE YEARS on, and they're still migrating, still in co-existence mode, and still spending HUGE amounts of money on staff and hardware, effectively running two mail systems. For absolutely no gain. And hey -HP had to stop the project and throw more hardware at it again because - and this is from the loose lipped MS guys who cluster around a friends office door (the coffee machine is there) - they just CANT BELIEVE how much mail Notes can route. They just cant get the Exchange database to work reliably, that fast. Made me smile. 10 years on, and Exchange - based on Jet - based on Access v2 - still doesn't scale. Oh - and Philips have not yet migrated everyone, and surprise, surprise, have decided to offer notes to some users again.

    Another subsidiary of Philips used 13tb of Disk for Domino mail. They're moving to Exchange (again, disaster project, did nothing but burn money for two years) - and have installed 57tb for the same mailboxes in Exchange. I though Exchange used LESS disk space, not more ?

    Two 'cloud' initiatives - one from a HUGE Pharma, and one from a bottling company - both underline how MS sell this initiative and actually FORBID existing staff from telling folks how their existing Domino infrastructures work. Presumably to stop the techies - soon to lose their jobs - telling the business that this just wont work. At all. And yet, in the Pharma case, they're steaming full ahead. And good luck to them...

    Now all of these examples underline how the Exchange "migration' was a political decision - an 'easy to do, first 90-days decision' designed as an Ego move for a new CIO. And all have backfired spectacularly. All have saddled their host companies with spiraling costs, and guess what - the CIO's have moved on.

    IBM used to 'own' all these accounts - all of the software for all of the people came from IBM. MS now occupy this position in these (and many more) cases. Some of these are bottled-up score-settling from years ago. I think in all these cases the argument that "Notes was dead" was used. Which we all know to be completely incorrect.

    I do *wish* that IBM would consistently tell folks that Notes is alive, well and growing, and not just keep that news to existing (well maintained) customers and the little yellow bubble. Ed tells me again and again that the 'Notes is dead' message is dead in the US - which is extremely good news. In my humble opinion that battle is still being fought over here in Europe, and especially here in the UK. This is made especially bad because the few people within IBM who go out there and spread the good word in the UK have their hands tied behind their backs.

    Thats one thing that MS is good at, is presenting a cohesive, well joined up, and above all *supported* product set. In our little world, IBM sales guys are more often than not shafting Notes so that they can get the commission on the IBM consulting gig to migrate from Notes to Exchange. How you are going to persuade the cufflink and gold teeth brigade to accept vastly lower commissions on the more cheaply priced notes is going to be a challenge.

    We have now solved the 'Notes is ugly' statement (thanks to the efforts of MBR and her team), and thanks to the amazing technological advances under the Goyan and Rhodin regimes, we've never had such a good product.

    Now the IBM organization need to actually stand behind it. Here's hoping Ed's elevation, the new Bob, and the increased communication with the suits back at Armonk help this happen.

    ---* Bill

  1. 23  Luke  |

    @22: The Philips migration to Exchange has been the worse migration I ever saw in my life. As for today, Exchange/Outlook isn't working reliably. Connection and updates are randomly working, syncronization via Outlook hasn't been working for months since the introduction of the Outlook 2007 client. What's worse is that Notes (6.0.3) weighs in at about 30MB of memory usage, for doing what it does, and Outlook weighs in at about 90MB of memory usage. On the same machine opening an email with an attachment means three times the time it takes to open the same mail with the Notes client. Let's not talk about the internet client because it involves different thinking and factors (not to talk about the fact the web-mail was never released with Domino). So far, shutting down of Notes mail hubs has just begun (1 year later than planned), but to tell everything is working smoothly is another story.

  1. 24  Giulio  |

    @Bill. That's interesting. Some good war stories, but they're not about a completed migration away from Notes and then a return back to notes. But maybe no one has successfully migrated away from Notes. ;)

    CIO's making emotional decisions without any project planning.. The first thing to fall is the pride and ego.

  1. 25  Ed Brill http://www.edbrill.com |

    @24 and because of that human emotion, very few organizations admit making an incorrect decision about a migration. While we have seen a few cases, for the most part, once a migration decision has been made, even if it is reversed, that customer will not be the reference you seek. And nobody will spend the money to migrate twice...so once they start down the path away, they can't really go back. This is why it's OK for MS to under-scope the size of a migration... once the true costs are discovered, there's no way to hit the "undo" button.

  1. 26  Sean  |

    @22 Have to agree strongly with Bill on the way things are here in the UK.

    In several places where I've worked the idea to migrate from Notes has been the idea of some newly appointed CIO who wanted to make a political statement and try to justify his large salary.

    In once case the CIO, who had been quoted in MS advertising several times in his previous job, initiated migrations to MS products upon his arrival and then left before completion presumably to reprise the process at another company.

    (The corporate hospitality thrown at this guy by MS helped smooth the process along; Champions League Box-Tickets anyone?)

    The old tactic of 'death by not-upgrading' still seems common too.

    As an aside to non-UK peeps. Re: the merged Halifax Bank of Scotland (HBoS). This bank nearly collapsed recently and would have single-handledly destroyed the UK property market. So the execs have a track-record for poor decisions.

  1. 27  jimmy bracco http://www.lotus911.com |

    @22,

    couldnt have said it better (again).

    I have reason to believe Bob and his team may believe the same recently...cant wait to see how it plays out

  1. 28  Andrew Pollack http://www.thenorth.com/apblog |

    I don't fight too hard on migrations. I wait them out. Usually within 6 months I'm back doing Notes work for the site because the migration gets put "on hold" once they actually try to build apps in MS tools.

    That said, the MS Tools are getting better, and they will eventually get good enough. The IBM tools do need to keep moving forward so that we can keep pushing that bar higher and higher.

  1. 29  Andrew Pollack http://www.thenorth.com/apblog |

    I don't fight too hard on migrations. I wait them out. Usually within 6 months I'm back doing Notes work for the site because the migration gets put "on hold" once they actually try to build apps in MS tools.

    That said, the MS Tools are getting better, and they will eventually get good enough. The IBM tools do need to keep moving forward so that we can keep pushing that bar higher and higher.

  1. 30  Patrick Kwinten http://quintessens.wordpress.com |

    I am wishing for an opensource sharepoint variant that silence these MS people

  1. 31  Ben Poole http://benpoole.com |

    Why wish? Make it so!