University of Nebraska drops Lotus Notes for Microsoft - the bigger issue I see here...
So the big story in cloud e-mail that broke yesterday is that the University of Nebraska decided to leave their on-site Notes e-mail system and move to Microsoft's online offering after Microsoft sweetened the pot by adding $250,000 to the deal:
Microsoft Pays Customer $250,000 To Adopt Office 365 (InformationWeek)
Exclusive: Redmond gives University of Nebraska six-figure incentive package to ditch IBM system and reject Google Apps.
Microsoft Gave Customer $250,000 To Choose Office 365 Over Google Apps (Business Insider)
This is another casualty in the education market where an institution has decided to drop Notes and move to the cloud, and the choices came down to Microsoft or Google. Depending on which side you're on, there are various reactions that seem to bubble forth from this particular move.
The obvious one that made this reportable is that Microsoft paid a Notes client to migrate. While this may sound like bribery or buying a client, it's not as if someone pushed a briefcase across the table and said "switch now, and this is yours."
And one other big reason--the university will receive $250,000 in givebacks from Microsoft to underwrite the switch under a little-known program Redmond calls Business Incentive Funds.
"That funding will pay for some consulting and licenses to convert a large percentage of our users from Lotus Notes to Office 365," UNL officials said in a Q&A about the email migration that was posted on the university's website. "We will also use that funding to pay for a Microsoft Premier Support agreement covering email and Microsoft Office applications for the entire university." (InformationWeek)
The way I read this, it appears to be a case where a number of services and licenses were included at no cost to the university, and the value of those services reflect $250K that would normally be paid by the buyer. Think of it as "and if you call now, we'll throw in an additional widget at no extra cost!" It's just that this one had a few extra zeroes at the end, and it was used to move a company away from something in which we have a vested interest.
The larger issue in my view is this:
With Office 365 now formally launched, it's likely Microsoft will continue to be aggressive when it comes to negotiating contracts for new government, educational, and commercial accounts. Last year, New York City officials said the vendor offered significantly lower prices than Google on a bid for the city's cloud computing contract. The upshot for customers: As Google and Microsoft battle each other for the cloud, there may be no better time to buy. (InformationWeek)
Microsoft has long been rumored to offer huge discounts and paybacks like this to get early adopters for new products, and to beat back Google in enterprise and government contracts, but this is a rare instance in which a customer actually admitted it.
It also highlights what a hard uphill battle Google faces if it seriously wants to take Microsoft on in the enterprise. (Business Insider)
In both these articles, there is no mention of LotusLive being a viable alternative.
Before you rush off and blame technology media for bias, consider the Gartner research article published on June 10 titled Cloud E-Mail Decision-Making Criteria for Educational Organizations by Matt Cain. The lead of that article:
Educational organizations sometimes struggle to choose between Google and Microsoft for e-mail and collaboration services. We present six evaluation criteria that can be used by personnel making the decision, or by executives charged with reviewing vendor decisions.
The word "Lotus" is not found anywhere in that piece. It's as if LotusLive is not even an option.
I'm aware that the educational market has its challenges for a vendor, one issue being that "free" has become the baseline cost for how much they want to spend to get students on e-mail. Still, IBM has gone from a dominant position in the educational market to one of being considered the "legacy" or "aging" infrastructure that needs to be replaced with a Microsoft or Google offering.
I'm aware that IBM knows they have to do more in terms of making LotusLive more visible in the market, and that's good. From my perspective, that problem looms large in determining whether LotusLive becomes a market player or an also-ran...