ADVISOR RADAR

The Top Dogs of Business Messaging

Researchers evaluate the market strength of the two top business messaging platforms.

Microsoft Exchange continues to hold the largest portion of the business e-mail market, according to researchers with the Radicati Group. For both the server and client components, more companies are using Microsoft technology than its main competitor, IBM Lotus Notes/Domino.

In several early-2004 studies, Radicati researchers examined the messaging products, forecasting the growth of their installed bases from 2004 to 2008. Researchers measured installed bases in terms of "active" seats -- i.e., those accounts that have been installed (not just shipped) and have been used at least once within the last three months.

Largest installed base

Almost one-third (31 percent) of the business e-mail market belongs to Exchange; by the end of 2004, there will be 114.2 million Exchange mailboxes. Of that share, 40 percent belongs to Exchange 5.5, and 43 percent belongs to Exchange 2000. Radicati says the study marks the first time the Exchange 2000/2003 installed base topped Exchange 5.5.

Exchange 5.5 users represent a key market for Microsoft and its Exchange Server 2003, researchers add. Extended support for version 5.5 expires at the end of 2005, and customers will have to upgrade.

On the client side, Outlook has a large lead. A part of Microsoft's Office productivity suite, Outlook accounts for 74 percent of installed e-mail clients worldwide. In addition, Radicati says Outlook Web Access is gaining traction, with about 36 percent of Exchange users expected to use it by the end of 2004.

IBM broadens messaging product line

Runner-up IBM has a strong presence in the corporate messaging world, as well. The Domino/Notes platform remains popular, and the company has launched a new line of messaging technology, dubbed Workplace, designed for companies that prefer to run J2EE software.

Lotus Domino makes up 24 percent of the corporate messaging market, with an predicted installed base of 85.9 million mailboxes by the end of 2004. As of early 2004, Notes represents 15 percent of the corporate e-mail client market.

The new Lotus Workplace collaboration platform should catch on, Radicati explains, but it won't take up much room in this market any time soon. The installed base should reach 3.7 million mailboxes by the end of 2004. Workplace's market share is expected to grow as the components get more functionality and more Domino customers make the switch.

IBM has also introduced a new Eclipse-based rich client for Workplace. Analysts predict the Workplace Client installed base will reach 35.9 million users by 2008.

IBM says it picked up 150 new Lotus Workplace customers in the first quarter of 2004, bringing the total number to 320. It also says its Domino revenue was up 12 percent from the previous year.

Comparing costs

A late-2003 Radicati report compared the total cost of ownership (TCO) for Microsoft Exchange Server 2003 and IBM Lotus Notes/Domino 6. The results? Exchange 2003 holds a 41 percent TCO advantage over Notes and Domino 6. Specifically, researchers found cost advantages in areas such as downtime and training.

For just the software itself, Microsoft had a three-year average TCO of US$107.02 per user, compared to IBM's $150.55 per user.

An early 2003 study measuring the three-year average "loaded messaging and collaboration TCO" (which includes the cost of the overall computing infrastructure [hardware and software] needed to support messaging) for IBM Lotus Notes and Domino 6, Microsoft Exchange 2000, Oracle Collaboration Suite, and the Sun ONE Communications Platform showed Exchange as the most expensive option:

1. Oracle: $194.94
2. Sun: $213.57
3. IBM: $406.56
4. Microsoft: $438.75

1. Oracle: $64.88
2. Sun: $96.42
3. IBM: $150.55
4. Microsoft: $221.42