I think there's more behind the announcement that IBM has acquired a web conferencing service, WebDialogs:
WebDialogs, based in Billerica, Mass., has developed audio and video conferencing software with more than 500,000 users. Its acquisition echoes the purchase in May of a similar company, WebEx, by IBM rival Cisco.
WebDialogs technology operates as an online service, and IBM said it will add a software-as-a-service delivery model to its Lotus Sametime messaging-software suite. Sametime already offered Web conferencing, but IBM hadn't offered that technology as an online service.
Microsoft acquired Placeware's (now Live Meeting), web conferencing service in 2003 so, at one level, the WebDialogs acquisition will fill an important gap in IBM's real-time communications (RTC) product line. While opinions vary on which company is currently leading in enterprise RTC adoption, a recent survey (I saw this in Peter de Haas' blog) concluded that:
... Microsoft has a commanding lead in the enterprise unified communications space with 48% of those surveyed stating that they are currently using or considering to use Microsoft OCS within their organization as compared to 35% currently using or considering to use Cisco UPC and 24% currently using or considering to use IBM Lotus Sametime.
More notable than the need to stay competitive in RTC, though, this acquisition may signal a strong IBM focus on Lotus and Notes.
That hasn't always been the case. 2002 was the start of an extended period when IBM appeared, at best, to be ambivalent about Notes/Domino future and sometimes downright hostile in pushing Websphere and DB2 as the key elements of their application and portal strategy. That period led to Lotus revenue declines in 2002 and 2003 (IBM didn't say how much).
So why emphasize Lotus now? Three reasons:
- The product has recovered somewhat. Following the declines in 2002 and 2003, Lotus revenue increased in 2004(+ 2.7% over the prior year), 2005 (+9.7%) and 2006 (+12%). Recent IDC and Gartner reports estimate Lotus software revenue in 2006 somewhere close to $1B.
- More competition from Microsoft. IDC and Gartner estimate that Notes/Domino has trailed Microsoft Exchange in messaging since 2003, but recently Sharepoint alone has seized a good piece of the collaboration platform with revenues of over $0.8B. That challenges two IBM software businesses: Lotus (collaboration) and Websphere (application middleware which includes portals).
- IBM values the Notes user base beyond collaboration. It's axiomatic that a strong end-user base is a great asset in maintaining and growing enterprise software adoption, but most of IBM's software revenue (and profits) comes from middleware, databases and operating systems hidden in corporate data centers. Lotus is the only IBM product line with broad user identity, so the Eclipse-based Notes 8 client is IBM's next attempt to revitalize and grow the user base they need for long-term software influence in growth areas like VoIP and Business Intelligence.
The last item -- building a user base -- is the most important and is good news for Lotus. IBM will likely pull out all the stops to break the pattern of previous attempts, which includes TopView, OS/2, SmartSuite, Metaphor, and Taligent.