Study: more users flock to Microsoft e-mail than IBM


Microsoft is growing faster and gaining more users than IBM in terms of their e-mail and calendaring tools, but the two vendors are near equals when it comes to customer dissatisfaction, according to a new report from Gartner.

The report on e-mail seat share, which draws conclusions from a survey of 402 corporate users in the U.S., Italy, France and Germany, also shows that both vendors appear to be in a deadlock on stealing accounts from each other’s customer base and that commodity email providers have the potential to grab seats, mainly at the expense of Microsoft, over the coming years.

The survey was conducted in September and October 2006 and released this month.

The survey’s release comes amid the shipment of Microsoft’s Exchange 2007 late last year and IBM’s annual Lotusphere conference, which was held last week and focused on Notes/Domino 8, slated to ship mid-year, and new social networking collaboration tools.

The report also comes after the Lotus Software division has posted its second year of double digit growth for IBM and reported more than 30 percent growth in the sales of Notes licenses during the fourth quarter of 2006.

“There are two big surprises here,” says Tom Austin, vice president and Fellow at Gartner and author of the report titled “Dissatisfaction With IBM and Microsoft E-Mail and Calendaring Is Real.”

“A lot of people are not happy with Microsoft and IBM’s seat share has shrunk far lower than we thought,” he says.

The Gartner study has a number of key findings including the fact that Microsoft holds a big advantage in overall user base with 62 percent as opposed to 26 percent for IBM.

“That was a shock, we did not think that it was that big a difference,” says Austin.

But in companies with 100,000 or more employees the overall user base, or number of e-mail seats, is 51 percent for Microsoft and 37 percent for IBM, which reflects that IBM’s strength is with larger companies who typically use its Notes/Domino platform for supporting applications, as well as providing e-mail in some cases.

In fact, the survey notes that Gartner’s “e-mail seat-share numbers under-report usage of Notes/Domino because not all users of Notes/Domino applications use Notes for e-mail.”

“This says that in large enterprises, IBM and Microsoft are toe-to-toe, but the further you go down the chain of smaller and smaller enterprises, the less likely it is that IBM is on an even footing with Microsoft [in terms of seat share],” says Austin.

In the survey, Microsoft’s user base grew by slightly more than 17 percent from 2004-2006, while IBM’s grew 11 percent.

Gartner notes in the report that Microsoft achieved more than a 60 percent share of email seats nearly three years faster than the research firm had originally predicted.

Gartner, therefore, revised its prediction, now saying by 2009 that user base numbers will be 70 percent for Microsoft and 17 percent for IBM.

The survey says IBM’s continuing loss of seat share is because it does not effectively compete for email accounts in companies with less than 10,000 users, and concludes that IBM’s share in that segment is “dangerously low” and could affect the Note/Domino “ecosystem.”

The survey notes market perceptions generally categorize Microsoft as a “middle of the road” option and IBM as the “high end, feature-rich and more extensible, yet higher-cost alternative.”

The survey says “IBM does cost more, on average, at least in part because people do more on top of its e-mail platform; Microsoft is not as capable as IBM — while it is partially closing the gap with Office 2007, Exchange Server 2007 and related products, IBM is expanding the gap with its Social Software initiatives.” The company announced those initiatives last Monday at the opening of Lotusphere.

“I think IBM needs to make a bold break from the past and their efforts in social computing constitute an attempt to make that break,” says Austin. “Competing for commodity e-mail is not something IBM is going to be able to succeed at in the long run.”

Austin acknowledged that IBM is way ahead of Microsoft in terms of collaboration and social applications, but that the bleeding edge technology is not something everyone is ready to adopt. “So there are an interesting set of questions around that,” he says.

As far as dissatisfaction among users, the survey found that 50 percent of respondents using either platform were dissatisfied and were considering migrating at least some of their users to a new mail system, that users actually were migrating, or that they wanted to migrate but felt they could not.

But while dissatisfaction was high, actual migrations from one vendor to another represented only 10 percent of respondents and 5 percent of the total number of e-mail seats.

The results showed that for both vendors 29 percent of their installed seats were at risk of migrating.

And many migrations were due to consolidation as roughly one-third of respondents reported they run both IBM and Microsoft e-mail products. Those respondents represented roughly one-third of all seats reported in the survey. The difference was that 96 percent of IBM shops moving off the platform were going to Microsoft and of those considering a migration 78 percent were taking into account Microsoft.

Of the Microsoft shops moving platforms just 44 percent were going to IBM, while 42 percent of those considering a move had IBM on their list.

The survey found that Oracle was perceived as a low-cost alternative, but that alternatives could come from the likes of Google or even Microsoft and IBM themselves.

The report noted that the focus on IBM versus Microsoft ignores what Gartner says is the next potential revolutionary shift in this market, a move to externally provisioned, commodity-type, standards- based e-mail.

“Microsoft’s challenge is to its business model,” says Austin. “That business model may not evolve fast enough to move from software license sales to Microsoft Office Live and Windows Live for the masses.” says Austin.

The report found that the most three frequent reasons for migrating were costs, including moving custom applications; investments in infrastructure, tools, and staff training; and being unable to justify migration spending.

Gartner predicts that externally provided e-mail services will emerge as a significant and serious part of the enterprise e-mail market by 2010. And by that year, at least 8 percent of e-mail and calendaring users in companies of 500 or more e-mail users will rely on externally provided e-mail services as their primary enterprise e-mail service.


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