News Stay informed about the latest enterprise technology news and product updates.

Lotus, Microsoft wrangle for e-mail market share

Today offers the first installment of its weeklong special report comparing Lotus Domino and Microsoft Exchange. Heading into 2003, both vendors are hyping new or upcoming releases of their core messaging products. One expert believes the messaging war of the mid-90s is over, but reactions to product redesigns and licensing changes could still shift the balance of power.

For the past seven years, Microsoft and IBM's Lotus Software have been battling fiercely for dominance of the enterprise messaging space.

Heading into 2003, both companies are hyping new or upcoming releases of their core messaging products, Microsoft Exchange Server and Lotus Domino and Notes. But the days of contentious competition between the two vendors are probably over.

According to David Ferris, president of San Francisco-based messaging research firm Ferris Research, 90% of enterprises have committed to either Exchange or Domino, and once that choice is made, most find it too difficult to reverse course.

Ferris said that's why, after jockeying for position for years, the two companies now dominate the market in terms of overall seat count. According to the most recent research by Framingham, Mass.-based International Data Corp., Microsoft boasts about 83 million Exchange users and Lotus is only about 9 million seats behind. Third-place Novell Inc. ranks a distant third, with 34 million users of its GroupWise offering.

However, Lotus is able to boast that its messaging business is more profitable. IDC said that in 2001, Lotus made more money off Domino than Microsoft did from Exchange, $804 million compared with $646 million. While both vendors claim a dramatically lower total cost of ownership (TCO), experts conclude that neither product has an advantage and that TCO depends on whether Active Directory is considered part of the Microsoft messaging infrastructure.

Special report: Domino vs. Exchange
>>CLICK for more of's Special Report on Domino vs. Exchange
Coming Tuesday, Domino and Exchange duke it out in's special point-by-point product comparison.
The battle between Lotus and Microsoft dates back to 1996. In March, after two years of delays, Microsoft released Exchange as an intranet-only messaging server to replace its outdated Microsoft Mail system. A few months later, Lotus created the Domino server as an HTML- and HTTP-compliant back end for its popular but proprietary Notes e-mail client.

Over the years, the two products matured and competed fiercely with each other for enterprise messaging market share and mind share. During that time, Microsoft focused on the strength of combining Exchange with its popular Windows operating systems, and Lotus grew Domino into a popular platform for collaborative application development.

Though both products have improved dramatically over time, Ferris said that the improvements have occurred in spite of major mistakes the vendors made along the way.

"With the acquisition of cc:mail [Notes' predecessor], Lotus was the dominant player in the marketplace, but the company managed to destroy that position and confuse customers," said Ferris, by not forging a clear migration path between cc:mail and Notes.

Microsoft has been too eager to release updated versions of Exchange, Ferris said, forcing customers to spend money on upgrades or risk falling behind the technology curve. He also said Microsoft's customer support has suffered to an extent because it has had trouble getting quality employees to work on its legacy software.

For more information
>>CLICK to view's Lotus Live! Series webcast with Lotus' Ed Brill on Domino vs. Microsoft

>>CLICK for our Featured Topic on Domino vs. Exchange

>>CLICK for more articles by News Editor Eric B. Parizo

As for the future, Ferris said he believes Domino and Exchange will continue to dominate for the next several years, especially following Lotus' October debut of Notes and Domino 6 and with Microsoft prepping its updated edition of Exchange, currently code-named Titanium, for a mid-2003 debut.

Yet Ferris cautioned that even though Lotus and Microsoft have dominated for years, that could change rapidly because the messaging market is known for "massive changes that are hard to predict," most notably customer reactions to product redesigns and licensing changes that shift the balance of power back and forth.

"In the market, there's been a swing predicted toward outsourcing in the medium and large businesses that hasn't happened yet. That would particularly hurt Microsoft's Exchange business," he said. "Oracle is also coming out with a new product, and if that turns out to be really good, then IT shops could find that more attractive."

Dig Deeper on Lotus Notes Domino Administration Tools

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.




  • iSeries tutorials's tutorials provide in-depth information on the iSeries. Our iSeries tutorials address areas you need to know about...

  • V6R1 upgrade planning checklist

    When upgrading to V6R1, make sure your software will be supported, your programs will function and the correct PTFs have been ...

  • Connecting multiple iSeries systems through DDM

    Working with databases over multiple iSeries systems can be simple when remotely connecting logical partitions with distributed ...