Friday, September 5, 2008

Fud Buster Friday #4 - eMail is a Commodity!

It has been said by many people and companies. Yet few of those really understand what they are talking about. In revisiting a posting from February
this has been a continuous discussion.

The definition of a commodity, per Merriam-Webster is a
1) a mass-produced unspecialized product or
2)a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price.

Do you think Lexus, Mercedes or Porsche see cars as a commodity?
What about GM or Chrysler?

As discussed previously, price is not the issue, really it isn't.
If it were, everyone and their subsidiaries would be using Gmail.

But they don't. Why? Because on the surface to a "end user" it's just a client getting email or sending it. But from an infrastructure view the list is long: archiving, backups, discovery, anti-virus, spam, malware, retention, international languages, calendaring and scheduling, security, management, access, integration, legal requirements, you get the idea.

Profit margins lower? Perhaps, but if the cost to create R8 for instance was so high, why would IBM spend the money if there is no margin or return?

Yes you could argue the Lotus Domino Server is just one piece of a puzzle which Lotus Connections, Lotus Sametime, Lotus Quickr or even Lotus Foundations and Websphere Portal complete and that's why they spent the money. Lotus gained about 13 million seats last year since Jan 2007 to the most recent announcements from Ed in April 2008.
There has to be some margin on that, even at a $1 a license, which has some benefit. Of course services brings in a lot of money so it does all balance someplace.

Today, and probably still for years to come, email runs your business in many ways. From workflows to simple approvals or sales ads. Email will come to blend more into voice sometime in the future. Imagine how much disk space you need, and processing power, to handle recording of all streams of audio/video for your VOIP lines?

Unified Communications is the key but it is just another method of transport, just like email or postal mail. But without the other pieces and parts to put it together in an efficient way, you are missing the opportunity.

The equivalent setup with Microsoft requires much more hardware and software over the Lotus and IBM approach, discussed previously here and here. If spreadsheets are a commodity, why isn't everyone using Lotus Symphony?

Are cell phones a commodity? Evidently not, if you watched the iPhone, Bold and other device launches lately.

So the next time you hear a client say email is a commodity, remind them how they use it and take advantage of it is NOT a commodity and having a system which can enhance their communication and collaboration securely is just as important.