Microsoft trails IBM with about 32.5 percent of the market for groupware, which allows corporate employees to communicate online over a company network. new product on the horizon.
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Microsoft Pitching Platinum 6 Months Before Release (Update2)
Redmond, Washington, June 16 (Bloomberg) -- Microsoft Corp. has begun pitching its upgraded corporate-messaging software six months ahead of its release in a bid to wrest control of the ''groupware'' market from International Business Machines Corp.
Microsoft trails IBM with about 32.5 percent of the market for groupware, which allows corporate employees to communicate online over a company network. The world's biggest software maker is promoting the Platinum upgrade of its Exchange Server as the best corporate software for unified messaging, which provides a single in-box for e-mail, voice mail and text pages.
Microsoft is trying to catch up with IBM's Lotus Notes, which has 45.5 percent of the groupware market, and is betting that the forthcoming Windows 2000 operating system will boost its companion Exchange program. More than 50 companies, including Lucent Technologies Inc. and Active Voice Corp., already are using Exchange to develop unified messaging, Microsoft said at a trade show last week. ''The momentum is behind Notes, based on the fact that they've got a new release in the market with a major leap in functionality,'' said Phil Schacter, an analyst with Burton Group. ''They've got the advantage until Exchange ships.''
IBM's Lotus subsidiary created the groupware market in the early 1990s. The worldwide market will nearly double from $1.3 billion in 1997 to $2.4 billion this year, according to International Data Corp.
Platinum will ship next year, about 90 days after the release of Windows 2000, which is expected in the second half, Microsoft says.
Microsoft shares rose 3 5/16 to 81. IBM rose 4 13/16 to 120 11/16.
Delaying Installations
Large customers won't install Platinum until the kinks are worked out in the new operating system, said Steve Lewis, Lotus' senior director of product strategy and business development. That delay will give Lotus an ''18-month'' head start on Microsoft, he said. ''We don't believe Platinum will be a competitively viable entity until the first quarter of 2001,'' Lewis said.
Exchange will continue to build momentum before Platinum's release, said Dave Malcolm, Microsoft's group product manager for Exchange. ''We've been able to quickly come out of the gates and catch up and pass them in a very short time,'' Malcolm said. ''In 1998, we outsold them.''
The race between the titans will be tight, analysts said. ''It will be head-to-head, Microsoft against Lotus,'' said Mark Levitt, an analyst at IDC. ''Both are aggressive and have the ability to leverage related markets.''
Lotus' Notes was introduced in 1989. Its strengths have been reliability, ability to work in big company applications and a wide range of features including database searches. Links to IBM's computer hardware and software have helped.
Exchange debuted seven years later. Its strengths have been its ties to Microsoft's ubiquitous Windows and other software such as SQL Server for database management, and its lower cost.
Market Share
Microsoft beat out IBM and Novell Inc. in U.S. groupware sales in the first quarter of this year, according to IDC. Exchange won 1.9 million new users, compared to Lotus' 1.4 million and Novell's GroupWise with 1 million.
The tide may be turning, analysts said. ''I would expect some blip'' for Lotus in this quarter due to R5, the latest version of Lotus Notes, released in March, Schacter said.
Lotus is ahead in installed base, with a 45.5 percent share at the end of 1998, according to IDC. Microsoft had 32.5 percent and Novell had 22 percent.
Unified messaging is expected to be one battleground. The system for a single in-box containing voice, video and data messages may be gathering pace after a faltering start, analysts said.
Voice recognition and voice-over-the-Internet technologies have improved, and customers are looking for more efficient ways of managing the information glut facing workers.
Lotus may have an edge, Schacter said. ''They did a lot more voice in the early days,'' he said. ''They have a more mature unified-messaging story than Microsoft.''
Real-time collaboration, which gives users immediate online correspondence, may be another battleground. Microsoft acquired Flash Communications in February 1998 to enhance instant messaging. ''It's going to be a strong growth area,'' Schacter said. ''Both are expanding what they can do.''
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