At last week’s ATLUG Day of Champions event my presentation was Lotus Notes: Live Long and Prosper. I chose the topic because I was seeing a growing number of companies questioning their investment in Notes as a strategic platform. I was curious about why some technology products and brands seemed to last forever while others were fads that disappeared almost as fast as they arrived. Perhaps if I could understand why, my belief that Notes has a strong future would be driven less from the heart and more from the brain….
When I looked closely at technology companies, brands, and products it seemed that at least three important aspects had a major impact on their longevity. (1) the dynamics of the market for which they served, (2) the barriers to entry into that market, and (3) the barriers to exit the market. These are all important concepts in marketing which we sometimes overlook.
A good example of this is mainframes and COBOL. The future of the two technologies are related, with the market for mainframes being highly intertwined with the continued existence of COBOL. COBOL is now 55 years old. It has been dismissed as a modern programming language for a long time and yet it is still taught at one in four universities and and an estimated 80% of daily business transactions are still processed in COBOL. The market for COBOL is enterprise applications. Large enterprises are notoriously slow to change many things, including their applications. With 170 billion lines of code in use the barriers to exit are high. The cost of replacing so much working code is difficult to justify. While many companies may wish to replace its COBOL code (and the mainframes running this code), the absence of a business case for change suggests COBOL will be around for another 10 or 20 years.
While I did not cover this in my presentation, IBM is another interesting example. In an industry notorious for constant change and innovation it is has outlasted many of its competitors and now reached 100 years of existence. To do this it has relied on those same three marketing elements. As International Business Machines it initially defined itself in the “business MACHINE market”. What was important was its targeting of large enterprises, again because they tend to be slower adopting to change – the barriers to exit are higher. This has given IBM time to adapt itself to the changing markets. When typewriters gave way to computers IBM redefined its market such that the “Machine” become the COMPUTER and IBM started to sell computers (and later software) to large enterprises. Now we are seeing another important change. Software development is being outsourced via SaaS and hardware is being outsourced via PaaS. IBM is again redefining its market to being the provider of SERVICES rather than a provider of things – The “M” in IBM is becoming less relevant.
In contrast when we look at a company like RIM/Blackberry we see a once healthy company that dominated its market suddenly in crisis. The issue here seems to be that it defined itself in the “business smartphone” market. But that industry changed. Consumers pushed to use their own smartphones in the office and refused to carry two devices with them. They essentially redefined RIM’s market to be that of the smartphone. Here in the US we replace our phones on average every 23 months – the barriers to exit are low. If Blackberry didn’t stay on its game and continue to deliver popular devices its marketshare could evaporate in less than two years, and it did thanks to some help from Apple, Samsung and others.
So what does that mean for “Lotus” Notes. Well the Lotus brand may be gone but the product remains 24 years after it was first released. As I see it, Notes is really two products each of which has their own set of distinct market dynamics, mail and applications.
With mail the barriers to exit are quite low. We use mail to manage current discussion threads and also as a way to archive material for later, less frequent, retrieval. Mail typically remains current for less than 30 days. It might be a pain to live through a mail migration, but that pain will probably only last for a month. While I still wouldn’t recommend investing too much money migrating mail from one platform to another as the return on that investment is usually much lower than first thought, the dynamics of the market demand that players such as Microsoft, Google, and IBM must continue to innovate to keep its audience happy for fear they may quickly move to an alternate product. Hence the current development by IBM of IBM Mail Next.
For Notes applications I believe it is important to clearly define the market in which it competes. At its inception we used terms such as Groupware to define new characteristics of multi-user applications and integrated mail. But that is now the norm in most (non-COBOL) applications. To me Notes has really become the dominant player in the small-to-medium sized application market (SMA). For smaller companies SMA can mean enterprise applications. Many Notes application have little or no workflow. Sending of mail is a standard feature of most application development products, including its largest competitors SharePoint and Force.com. Like COBOL many companies now have a major investment in Notes applications. It is estimated that 50,000 companies each have an average of 200 active Notes applications. This means we have 10 million Notes applications in use. In contrast apple recently celebrated reaching 1 million applications in its app store, and force.com currently claims to have 220,000 custom applications. The typical Notes application contains 5,000 lines of code which equates to 50 billion lines of code worldwide. Like COBOL, that is a lot of code and it is going to take a long time before companies can ever justify rewriting that code. At $4 per line of code ($20,000 per application) we are talking about a cost of $200 billion to rewrite code that is still largely working as well as the day it was first written.
Remember: It’s not as if Notes has become a dinosaur. IBM continues to invest in the platform and has delivered new versions of the product every year since it acquired Lotus. We now have XPages, XPages mobile controls, the Social Business Toolkit, and the recent announcement of a SoftLayer (cloud) implementation for Notes/Domino applications. Like many I would like to see IBM do more but their focus at this time is clearly on an important transition of the entire company. But even if IBM lost all focus on the product I am pretty sure it would last for another 10-20 years for many of the same reasons COBOL continues to remain.
So what are the implications for businesses that have an investment in Notes? First, you need to separate decisions about mail from applications. The two are no longer intertwined. Next, if you have been thinking Notes is going away and doesn’t warrant any further investment, you should think again! Business needs continue to change. If you are not investing in keeping your Notes applications current and modern you are leaving valuable business opportunities on the table. Unless you have a small handful of Notes applications I would reccomend thinking about Notes as part of the solution for the foreseeable future. Mobile and responsive web interfaces provide access to important business functions anywhere, anytime. Adding social capabilities can be important to bring people together to solve common problems. Notes is already able to deliver on these important needs for a fraction of the cost it might take to move those applications to something else. Cloud is a platform choice available for Notes, it is not a justification for throwing important funds into an expensive high risk migration. One of the advantages of the cloud is the regular updates to latest versions of the software. Modern applications require modern software on which to run. Going off maintenance and/or not upgrading to the latest version of Domino is a sure fire way to ensure your Notes applications are no longer modern that has nothing to do with Notes itself, let alone justify a decision to move to the cloud. Mobile and Web interfaces should be additions to an application and not drive the development of separate stand-alone applications (unless your company has too much cash at its disposal). And the Notes client still delivers some important benefits not found in either mobile or web clients. If you have the Notes client, exploits its capabilities. The Notes client has come a long way since Notes 1.0 and yet we allow many of our Notes applications look like they were designed 20 years ago. A modern (mobile first) interface isn’t the result of switching to a new product, it is the result of a new design that can be easily applied to an existing application.
The conclusions I reached from my research was that Notes Will Live Long and Prosper. Not in every company, and not to the same levels. The clear winners will be those that invest in the platform to deliver high returns from a product that has delivered more SMA applications than any other.
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