IBM Targets Google Apps in the Enterprise

Includes: GOOG, IBM
by: Larry Dignan

IBM is going after Google Apps Premier hard and has the pricing to show it’s serious. Big Blue is announcing the general availability of LotusLive iNotes, a cloud email, calendar and contact management service, for $36 a year per user. Google Apps Premier runs $50 per user a year.

The LotusLive iNotes launch, set to be announced on Monday, pushes reliability in a big way. Taking a jab at Google’s (NASDAQ:GOOG) outages, IBM said it’s imperative that cloud computing “is ready for the enterprise when it’s designed for the enterprise, by the enterprise, and of the enterprise.” Word of IBM’s iNotes move began to surface late Thursday and Big Blue has had a LotusLive iNotes site live for days.

Sean Poulley, vice president of IBM’s online collaboration and cloud services, says the idea behind LotusLive iNotes is to bring more security, reliability and privacy to enterprises that want Webmail. “These things matter a lot to the customer,” says Poulley, who described Google’s Gmail as a “consumer grade service.” “We’re bringing business class services and support with mission critical reliability at a price lower than the competition.”

A few key points on LotusLive iNotes:

  • IBM is acknowledging companies want hybrid cloud systems and it isn’t going to cede the online portion of the equation to Google. IBM said that LotusLive iNotes is interoperable with Lotus Notes and Microsoft Exchange.
  • The company is pushing security and reliability as its big pitch, banking on IBM’s reputation as an enterprise service provider. LotusLive iNotes features touted by IBM include secure email via any Web browser, offline capability, mobile mail and cloud centralized calendar and contracts.
  • IBM is aiming to get its foot in the door at companies that are looking for “gradual or dramatic migrations to the cloud” while supporting on-premise software. Poulley says that IBM isn’t pushing the market in any one direction. He acknowledged there will be some companies that want all on-premise software and others that want everything in the cloud. The big middle tier will be hybrid.
  • The company appears to be setting up Lotus as a cloud brand. When asked whether Lotus could become synonymous with enterprise 2.0, Poulley pointed out Lotus Connections and other Web 2.0 features IBM is embracing. “In the last three years most of the Lotus portfolio has been adapted to be Web 2.0 centric,” says Poulley, who added Connections is the fastest growing Lotus brand IBM has ever had.
  • Big Blue sees the Google threat as so serious it’s willing to blow up pricing for share. There are a few notable Google jabs including:

LotusLive iNotes was built for business use. Unlike other Web mail services, LotusLive iNotes accounts are not co-mingled with free, consumer accounts nor are they targeted for advertising spam.

  • There are some fine print items to consider. For instance, LotusLive iNotes comes with 1GB of storage per user. Google provides 25GB. Poulley said that IBM focused on the features that businesses really want. “Some enterprise customers don’t want to keep 25 GB online because it’s a compliance and audit issue,” says Poulley.

The big question: Will IBM’s move work? There’s no question that Google may be vulnerable following well-publicized Gmail outages. And large enterprises may think twice about Google. IBM says “there is zero tolerance in the big leagues for frequent outages or doubt about the sanctity of business data.”

What’s also notable here is that IBM may be using the cloud Lotus version to preserve its on-premise business. It’s also interesting that IBM is targeting Google, but doesn’t mention Microsoft (NASDAQ:MSFT), which also plans a cloud version of Office. IBM may be subtly jabbing at Microsoft when it says LotusLive iNotes gives users on-premise functionality “without adding on extra features they do not require.”