Anyone familiar with Microsoft Corp.'s arduous antitrust battle knows the company is not fond of losing. Enterprise messaging, though, is one area where the Redmond, Wash.-based software giant is gaining ground, particularly against IBM's Lotus Development Corp. and its Notes/Domino platform.
The new performance, security, management and collaborative features in Exchange 2000 are so broad they hardly compare with previous releases. Yet two new market reports show Microsoft still faces a long battle with Cambridge, Mass.-based Lotus for supremacy in the corporate messaging and groupware market.
New research from Giga Information Group, Inc. of Boston, Mass., shows that of the 2001 installed base of enterprise messaging platforms, Notes holds only a slight edge over Exchange. Of the 345 million seats sold, 22% were for Notes, and 20% were for Exchange.
According to Giga senior industry analyst David Nelson, Exchange and Notes will continue in a virtual dead heat through 2005, eclipsing others currently in the market such as Novell Groupwise, Critical Path InScribe, Sendmail, and Hewlett-Packard Open Mail.
"Obviously these two players have the presence and the support structure to dominate the corporate market," Nelson said.
Microsoft and Lotus have jockeyed for the top position in seat sales over the last several years. Sales of Notes were strong in 1999 with the launch of Domino R5, but Microsoft has been performing solidly by marketing Exchange 2000 as an integral part of a Windows-based server and collaborative computing environment.
Nelson said Microsoft helped its cause by tightly integrating Exchange 2000 with Windows NT, Windows 2000 and Active Directory.
He said Microsoft's corporate customers wanted a single yet comprehensive directory in terms of its structure and its ability to connect with other databases in the enterprise, and it was a natural evolution for Exchange to become part of that strategy.
According to predictions from Ferris Research, the two platforms will dominate in large organizations worldwide for the next several years. Even though many enterprises use more than one e-mail system, weaker competitors including Hewlett-Packard and Novell will gain little ground because of the inherent difficulty in switching vendors, according to David Ferris, research director.
"Microsoft is a natural for large corporations because IS departments see Microsoft as a primary software partner, so the default is to go with a Microsoft supplied e-mail system," said Ferris.
He said much of Lotus' current success is a result of its early entrance into the market. Today, many companies have made a major investment in Notes/Domino technology and are reluctant to move in a new direction.
Another differentiator is the application development environment offered with the Lotus technology. Lotus has offered an advantage to companies needing to develop their own applications for many years before Exchange 2000, and those early and loyal Lotus customers are likely to continue using Notes/Domino.
While Microsoft is making strides in application development, Ferris said there are still substantial differences between the two products. "There's quite a long way for [Exchange] to go," he said, pointing to Exchange Server's need for increased account capacity and augmented search capabilities.
But Ferris praised Microsoft for getting behind common Internet standards like supporting rich text and HTML messages, as well as for developing its robust Active Directory that now can contain much more information than in the past.
"I think it's almost inevitable we'll all go toward Windows 2000 Active Directory as an operating system standard," added Nelson, noting it may take time to achieve critical mass.
Nelson also said Microsoft needs to commit to further improvements such as collaborative application development, synchronization and offline mail access, scalability of its instant messaging solution, and certification for Windows 2000 Datacenter additions to enhance clustering and scalability.
Over the next several years, Ferris said the Microsoft moniker would likely be enough to keep Exchange in a tight race with Notes/Domino, especially because of support from a growing number of third-party vendors.
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