Sramana Mitra: Well, you know, the application suite that is seeing the maximum migration is actually Lotus Notes.
Ken Stephens: No, it’s amazing. Lotus Live was an amazing success for IBM. That was a bit of a coup on their part to do that. But we shall see.
SM: People are moving out of Lotus, right?
KS: They moved a great deal of users to Lotus Live when they introduced their Lotus Live. But there are a lot of users moving away from Lotus Notes entirely, yes, that’s true.
SM: What is your impression? What are you seeing? What are they moving to? Is your impression that they’re moving to Azure or Google Apps or what?
KS: I think they’re moving in both directions. We have a number of customers who have moved away from Lotus Notes into Google Mail and Google Apps. I was a bit surprised because they were large customers. That was a bit of a surprise for us. But we’ve also seen some of those customers move to BPaaS and Azure. I don’t know that there’s a winner there. As I said, if I were to bet, I’d bet on Microsoft. But to Google’s credit, they have some very good innovation within their Google Apps that Microsoft can’t match.
SM: What is that innovation? Can you pinpoint where Google is differentiating?
KS: Yes. Collaboration and their office products as an example. The collaboration tools within their office products are just better than Microsoft’s.
SM: I think the Microsoft Office products themselves are better than what Google has but just the collaboration piece of Google Apps makes them a winner because it is so convenient.
KS: That is exactly right. Some customers are taking advantage of that. That may well be the right thing for them to do, but again, I’m hesitant to bet against Microsoft even in that space.
SM: What exactly is going on inside IBM?
KS: That’s a really good question. I like IBM, too.
SM: I’m putting the question to you specifically in the context of that Lotus, Apps, Docs and that whole environment. I have actually had several people from IBM on this series. They have discussed elaborately their analytics, private cloud strategy and all of that stuff. But this specific topic I hadn’t yet identified when I talked to them. I spoke with Ric Telford and Pat Toole, the CIO and CEO, respectively, of cloud services. So, I did get a lot of perspective from IBM, but this is a topic I identified later on.
KS: I don’t think IBM is serious about the applications in the cloud space. I think they will be serious in vertical applications, whether it’s health care, financial services or whatever. But I don’t think they’re serious about introducing any kind of competitive application to Exchange or BPaaS or those sorts of things. I don’t think they’re looking at it from a horizontal perspective. I think they’re looking at it from a vertical perspective. And that may well be the right thing for them to do. But horizontally, I don’t really see them playing. Lotus Live was a big win for them, so kudos to them. Beyond that, I have not seen them play in the horizontal space, on in the vertical.
SM: Interesting. I kind of see IBM more with horizontal infrastructure as their cloud strategy.
KS: Historically, yes, that’s true.
SM: Even now, I think horizontal infrastructure is their strategy, and then from a go-to-market and channel perspective, they have all these vertical groups that have domain knowledge and know how to sell vertical solutions. But if you look at their portfolio, it’s largely a horizontal infrastructure portfolio. All of their acquisitions have been horizontal infrastructure acquisitions, and that includes analytics.
KS: Yes, that’s true about analytics. That is true.
SM: I guess the one that is out there and unclear what the strategy is is Lotus because they have a large installed base and there’s a large migration out of Lotus going on. Aare they conceding that battle to Microsoft, Google, and whoever else wants that piece of the pie?
KS: I think they are. That’s my point. I don’t think they’re going to play in that space long term. Lotus Live did very well, but in the end, that’s going to be a cash cow that just gradually fades away.