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Express offers Lotus new hope in SMB market

It's estimated that just 16% of mid-sized companies use Domino, but some say small companies often overlook Domino's robust collaboration features. However, with Domino Express, Lotus is out to change that.

For Patrick Abel, president of Special Moments Photography in Plymouth, Mich., IBM Lotus Domino's collaboration capabilities were the solution to a troubling problem.

Special Moments, a wedding photography firm, was overwhelmed by the dozens of details and activities required to produce each wedding shoot and album -- everything from assigning a photographer and confirming the schedule, to developing the photos and having the couple approve the album.

Before Domino was installed in 2002, the process depended on a checklist, a telephone and a lot of human effort.

With Domino, however, Special Moments has been able to put 90% of those activities into a workflow application that sends timed e-mails and alerts to all of the parties in the wedding process.

The price [of Domino] was justifiable when we looked at the automation that could be achieved.

Patrick Abel, president, Special Moments Photography

"We realized that if we didn't start using our database more effectively, we could potentially ruin an event," Abel explained. "The price [of Domino] was justifiable when we looked at the automation that could be achieved. And our business has grown as a result of customers seeing how well we communicate now."

Special Moments' need for automated workflow and communications is a classic example of why a small or mid-sized company would want Domino over rival messaging platform Microsoft Exchange. However, for SMBs requiring only simple messaging software, it's common for them to go with Exchange rather than Domino.

A wide gap

A survey earlier this year by Ferris Research Inc., a San Francisco-based analyst firm specializing in messaging and archival technologies, found that 56% of mid-sized companies (500 to 2,499 employees) use Exchange, while just 16% use Lotus. For small firms with fewer than 500 workers, the number of Exchange users jumps dramatically to 74%, with a mere 8% opting for Lotus.

The difficulty that Domino faces in the SMB market, said Ferris analyst David Via, is a three-fold one:

First, many SMBs simply don't require the kind of customized workflow or collaborative applications that Domino provides companies.

Price, of course, is also an issue, with Domino tending to have a higher-priced, more complex licensing model then Exchange, which costs for $67 per user, plus $700 for the standard edition of Exchange Server.

Third is the problem of inertia. With the Microsoft Outlook e-mail client installed by default on nearly every new PC and laptop sold in the U.S., Microsoft is the path of least resistance for most small companies.

And, once on Exchange, most companies stay on Exchange, Via noted. "When you're migrating to a different platform, even if it is as easy as can be, it will always be more expensive then an upgrade."

Bridging the chasm

However, IBM has by no means conceded the SMB market to Microsoft. This year its Lotus group has released a three-product series of Domino Express products, targeting the SMB market with simplified licensing for fully functional Domino software, minus a few high-end features.

The price for the messaging server, released in May, is $96 per user for new users and $48 for those trading up from any commercial e-mail product, including Exchange. The two other products, released in summer of 2003, are the Domino Collaboration Express and Domino Utility Server. The Utility Server is aimed at people who want to use a Web browser client and the Collaboration Server for companies with more sophisticated collaboration needs.

The idea behind the Express line, said Arthur Fontaine, senior marketing manager for IBM Lotus, is to remove the potentially confusing licensing options that have hindered Domino adoption in the past, and do so at a price low enough to fit a small company budget.

"We were able to get aggressive on price and, while we didn't remove features, we removed licenses to specialized features that were focused on the enterprise, such as clustering/partitioning and extended directory features," Fontaine explained.

That approach could boost Domino's appeal to SMBs, said Derrik Smith, account executive for IBM business partner Datanational Corp. of Farmington Hills, Mich., which created Special Moments' workflow application. Price, said Smith, was one issue they had to overcome when selling Abel on Domino.

"The dollars was something [Abel] had to adjust too, but fortunately he saw the value," Smith said. "If we were able to come in [to future engagements] with a lower price, it would be helpful."

The simpler licensing scheme for Express might also give Lotus a boost, he said, noting that IBM would often alter the way Domino was licensed, or bundle it with other extraneous products.

For more information

Learn more about Domino Express.


Check out our Topics on Domino vs. Exchange.

While Smith doesn't believe Domino Express will spur a mid-market rush to Domino, he said it is a "good start" and gives business partners "another option to talk about with customers."

Still a divide?

But for the majority of SMBs looking simply for a messaging solution, Via said, Microsoft is likely to remain the dominant player. Though Express is helping it gain momentum, he said it's a challenge for Lotus because Lotus is dependent on business partners.

And with Domino facing an uphill battle in the SMB market, it seemingly has nowhere to go but up. "While I do think Lotus has succeeded in making pricing a lot less of an issue, other conditions haven't really changed," said Via. "And it can't really make radical changes to Domino just to make it more attractive to the mid-market, because its bread and butter is in the high-end enterprise."

Sue Hildreth is a contributing writer and editor based in Waltham, Mass. She can be reached at

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