Lotus Elevates LCS to Strategy

December 1994

More than a year ago, Lotus began talking about LCS, a Lotus Communication Server, which seemed to be a convergence of cc:Mail and Notes. That pleased many Notes users, who would like to have the products integrated, but was less popular among others. Notes users who were committed to other EMail systems balked at the idea of having to pay for cc:Mail whether they needed it or not; cc:Mail users who were waiting for a client/server implementation of the product for larger scale systems, didn't necessarily want the cost and overhead of Notes.

At year end, Lotus invited industry analysts and press to Cambridge for a half-day briefing on the status of the Lotus Communications Strategy, and the products to implement this strategy which will be delivered in 1995. John Landry hosted the session and kicked off the day by remarking that while Lotus was going to offer software, rather than architectures, there was, in fact, a four-tier architecture behind this strategy.

Landry went on to say that Lotus would continue to provide desktop applications and communications solutions, but would stay away from the business of network operating systems (Novell) and transactions processing (Microsoft, IBM).

Much of the meeting was brilliantly presided over by Michael Zisman, now co-Vice President of Lotus' Communications Product Division (along with Jeffrey Papows, of whom more, later). Zisman was acquired by Lotus along with his EMail backbone company, Soft•Switch, in July, and he has always been an excellent speaker and an electronic communications industry visionary. He makes a good spokesperson for Lotus -- credible, candid, no hype. He managed to do a good job of sorting out what Lotus has done -- essentially a small change in strategy and a lot of results about to surface in the market.

The September 1993 Lotus Communication Server Promises

As we've already said, the big problem with the September '93 LCS Announcement was that in promising:

• Delivery of a major new version of Notes (V4, to be shown to developers at Lotusphere in January).
• Delivery of a major new version of cc:Mail, including both file sharing and client/server versions and using the Lotus Communications Server as the cc:Mail server.
• Integration of Notes and cc:Mail with common management, directories and administration. While integration was what was promised, many read this as a merger of Notes and cc:Mail, as we noted in our introductory paragraph to this article.
• Delivery of native X.400 and SMTP industry standard MTA's.

The December 1994 Lotus Communications Strategy: A Refinement

Lotus has essentially refined the strategy. It's trying to deliver on all of the commitments it made in the September, 1993 announcement, but do it without making anyone unhappy, and in light of the announcements and competitive activities that have occurred in the intervening 16 months. The December line-up looks like this:

• Deliver Notes V4
• Deliver a new cc:Mail client and a new post office (file sharing). Offer 24x7 continuous operating for cc:Mail (that is, offer the ability to do administrative clean-up without closing down the post office).
• Provide tight integration of cc:Mail and Notes with OLE and Rich Text Editing. This tight integration clearly suits customers better than merging the two products together and permits Lotus to serve a broader set of customers.

This new version of the strategy recognizes

• What customers have been saying
• The acquisitions of Soft•Switch and Edge
• The announcement (and market reception) of Notes Express
• The availability of Organizer 2.0 Client and Server, and Lotus Forms

It also recognizes that Lotus has to ride the technology trends (and only occasionally gets to make them), that it has to react to competitive activities like mergers and acquisitions and new products and that customers are demanding a sharper value proposition. Also, in a market this competitive, Lotus must do a better job in just plain getting its message out and that demands simplifying and clarifying the message.

In a world where customers are struggling to deal with heterogeneous systems in a dynamic environment where everything sometimes seems to be changing simultaneously, Lotus sees the major technology trends as these:

1. The evolution from messaging to groupware
2. The move from one-vendor client/server systems to "real" client/server systems that can support multiple servers and data sources
3. The move away from customers being impressed with gee whiz features and being more concerned with the total cost of ownership, that is, a focus on usability and support costs
4. A recognition that the original vision that large customers would complete the vision of Open System by moving from SNA to OSI was flawed (or premature) and that the real future is a global TCP/IP-based routed networks vision

Lotus hopes to use its four-tier architecture and component (vs. monolithic) approach to sharpen the value proposition, making it clear that they offer large customers the best deal. It is a curious irony of the 90's that has Microsoft moving to a monolithic, single vendor (that is single operating system vendor) offering and the monolithic and proprietary vendors of the 70's and 80's (IBM especially, but also HP, Digital, and Novell, as well as Lotus) putting forward open component-oriented architectures. In the Lotus approach, this means:

• Pressing for complete integration, particularly for Lotus-supplied components, but at the same time, allowing for component-oriented heterogeneous solutions
• Requiring that Lotus products support other suppliers' clients and interoperate with other suppliers' infrastructures
• Offering a mail client that operated in both file share and client/server mode for ease of migration

With the new Lotus Communications Strategy, the Communications Server becomes the centerpiece for a set of products that will implement the strategy. The Server will provide a way of connecting cc:Mail to Notes (at Version 4) and providing the desired level of integration between the two products. It will also serve as the underlying server for the cc:Mail user who wants to move to a Client/Server rather than a file sharing strategy, to support larger and more complex networks.

In fact, customers can migrate from the current file sharing environment of cc:Mail to the client server environment (or to an integrated environment including Notes) through a series of steps, diagrammed below.

Customer-Controlled Migration

A good way to understand what Lotus has done is to look at a comparison of what they intended to do 16 months ago side-by-side with what they've actually decided to implement and to note what's in place. In the 1993 view of the world, Lotus was mainly trying to find a way to provide a client/server version of cc:Mail and some integration between cc:Mail and Notes. In the 1994 vision, much more is going on, much more of the competitive environment is recognized and accommodated (that's the component approach we mentioned earlier), and the acquisitions have begun to be leveraged.

Of course, the point of all this is to leverage Lotus' remarkable attainments in the groupware market with Notes and to maintain a leadership position in this market as it nears is take-off point. We believe the take-off point for the groupware market is likely to be in 1995. All the indicators are occurring:

• Small vendors have discovered the market and are building partial solutions intended to nibble at corners of the Notes market.

• Large vendors are preparing important products and marketing campaigns so that they can have their chance at this market as it opens. There are about 1,000,000 Notes users in nearly 5,000 customers. But there are 100,000,000 PC users so there is lots of marketing space left to grow in, even if only a third or a half of the market is Notes- or groupware-related.

Lotus needs to grow its revenue from communications products (cc:Mail, Notes, and the LMS or Lotus Messaging Switch, which is the new name for the Soft•Switch EMX directory synchronization and gateway product), to replace declining revenues from its desktop applications products. Microsoft has been carving holes in the Lotus application strategy and WordPerfect/Novell's entry into the suite market is likely to do further damage.

There are other contenders, too, who are expected in the marketplace in 1995. IBM has already announced its IBM Workgroup product, to be shipped in 1995. Microsoft's Exchange is the subject of weekly discussion in the computer press. But products from Oracle are also nearing the market and Computer Associates recently acquired workgroup servers from ICL and is considering becoming the American distributor of their groupware product.

Lotus's biggest advantage is the large installed base of cc:Mail and Notes and the fact that Notes has been in the market for so long, so that it not only carries a leadership aura, but also the fact of product maturity and stability and the added advantage of a fully built infrastructure of consultants, systems integrators, trainers, and incremental software. Other vendors will find that it takes years to build up this incremental but important infrastructure.

Lotus intends to evolve and expand its strategy, but the emphasis will remain on groupware and communications. They are willing to let others provide the other pieces of the solution and to pick and choose by maintaining that all-important open architecture.

Lastly, Lotus has not left the Internet stone unturned. In a few weeks, they will be demonstrating their ability to use Notes servers to create and publish Internet files through an HTML conversion from Notes. Internet surfers can read the files on a Web server via a Mosaic filter. This will allow Notes users to easily create and update home pages and extensive databases that are Internet-accessible, good news for companies that are anxious to exploit the Internet for commerce, but not eager to undertake yet another platform for development and maintenance.

The clarification and simplification of the Lotus Communications Strategy will go a long way in positioning Lotus as one of the front runners in the race to lead the office into the interconnected next century when location and time will be irrelevant and information will be readily moved, processed, shared, and used to create new business opportunities.

Comments or Questions: Send Email to opinions@wohl.com

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