How much does the average customer spend on consulting IBM Software Services for Lotus, and has it been difficult getting customers to spend money on services?
Over the past year, we've done 1,400 customer engagements with 800 customers, so it's hard to say there's an average in there. In this economic environment, it's harder to justify projects, so we're being asked to help sell engagements or projects in customers' own organizations that have true tangible value. We're often asked to help sell going from the pilot phase to the enterprise rollout. The nice thing to note is the technologies that Lotus brings to the table -- such as messaging -- are becoming mission critical, so more money is being spent there. Research suggests demand for services from both IBM and PwC Consulting is down. Is demand for Lotus-related consulting down
We've been quite strong. I think it's a different market for consulting today, but doing commercial consulting has been one piece that's helped us, and working with ISVs [independent software vendors] has been another. So I think across all those activities, our dance card has been pretty full. What types of engagements are you trying to avoid?
A lot of times we get requests for general staff augmentations or help desk staffing, but currently we're trying to focus more on a couple of categories... such as Quick Starts (Lotus' trial programs) for Sametime and QuickPlace. Or say [a customer] has picked up Discovery Server and wants to do a pilot project around a specific line of business, getting it installed and aligned for a specific problem they have, and then do an enterprise rollout. We concentrate on how our technology fits in larger enterprises. The Wall Street Journal has speculated that 4,000 IBM employees could be laid off as a result of IBM's acquisition of PwC Consulting. Can you comment on that, and would such a layoff impact Lotus consulting customers?
The PwC acquisition is being negotiated within the IGS [IBM Global Services] organization, and that's outside of my scope. Can you summarize the restructuring that was announced at Lotusphere and describe the scope of the services that IBM Software Services for Lotus -- formerly Lotus Professional Services -- now provides?
One of the core goals [of the restructuring] was to establish a tech services team within Lotus. When we integrated with IBM, we had plenty of organizations that do more traditional consulting, so we decided to refocus on the tech services side of things. Our goal has been to focus on shorter-term engagements and get more specialized to align with the businesses in Lotus. Are you finding that you have to compete with smaller consultancies for customers, especially those that may not be interested in large consulting contracts?
Well, we're working with a lot of partners, and the next phase of our strategy is to find more ways to enable them. If you look across the board, we've had good relationships, and we've used ISVs to subcontract, but we need to put more meat around our strategy. I think at Lotusphere this year you'll see a broader initiative around that.
I think compared to our old model, there was much more competition then -- where we're doing competitive bids -- and part of the value of the Lotus Software brand is having a valuable, active extended family around it. Our goal is to get Lotus products sold far and wide and ensure education services can be found locally, and to give customer choice in where they pick to receive those skills. Part of our mission has changed to nurture that ecosystem.
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CLICK for more articles by Eric B. Parizo I remember that part of the plan announced at Lotusphere featured greater reliance on enabling business partners to provide services that complement your offerings. Has that been realized?
Yes, from a couple aspects. As we announced at Lotusphere, one of the areas we were getting out of was the direct education business. We had a large number of classrooms and instructors, but we weren't treating our education business as a primary business partner channel for us. So we're still developing the curriculum and publishing materials, but we're depending on business partners to provide those classes. Also, we've strengthened our relations with ISVs that have products that complement the core portfolio of [Lotus] products. Internally, we're working on signing up business partners as subcontractors on our engagements and attracting them to the Lotus brand so they can take Lotus products into the ISV space. Why was it the right time for a restructuring in the services business?
There's no advantage in the services marketplace for a general consulting firm to being a first-mover. Most services organizations gain interest in a technology once it's reached a certain mass or reached a large populace. So we decided to have a services team associated directly with the brand to focus the majority of our skills on newer products and to get involved with products even before they're released, so that we have services ready to go as the new products roll out. In early January, Lotus cut an undisclosed number of jobs in its professional services group in what it called a "resource action." Was that in preparation for the changes that were announced at Lotusphere?
We did go through some optimization of the organization. The key thing we did was to focus on maintaining our higher-end skills, and leveraging and utilizing business partners more.