ResultsoftheResearch IBM IBM IBMGlobalServices IGS Network Workgroup UniversalMessaging Source IBMCorporation July1999 IBM Overviewofmessagingandcollaborationservicesofferings IBMWorkgroupServices PartofanorganizationwithinIGSthatwasestablishedafterthesaleoftheAT TnetworkMarketingcombinationofIGSandLotusDomino NotesManagedoperationsandhostingtechnologyfocusedonlargecustomersRunningentiredatacentersBuildingsystemsfromscratchDeployment installation developmentandprofessionaltrainingHostingenvironmentsforInternet intranetandextranetcollaborationandapplications Applicationhosting replicationservices andmessagingservicesareincluded Thebrowseriscentrictotheseimplementations TechnicalsupportforhelpdesksisstandardManagedofferingsincludedatanetworkservices internetandintranetservices electronictransactionservices messagingandcollaborativeservices networkoutsourcingservices IBM WorkgroupServices RevenueIGSservicesrevenuesforyearendedDecember31 1998were 29billion Source IBM10KReport IGSHeadcount116 000serviceemployeesworldwide Dataquestestimate WorkgroupServicesvalueofcontractsPublishedone offseatprice 36 month 4000 monthminimumTargetcustomers from300to15 000seatsGeneralapproachStartwithonedepartmentorgroup thenmovetoothergroupswithintheenterprise DifferentgroupsfromIGSarebroughtinandaprojectteamiscreatedManyclientsareestablishedNotesshopsneedingassistancewithrolloutandapplicationdevelopment AnticipatedGrowthIBMbelievesthemessagingandcollaborationspace whichincludesapplicationshosting messaging collaborationandKM isgrowingat240percent year Theyintendtomatchorexceedthatgrowth IBM WorkgroupServices Pricingstrategiesandnewservicesdevelopment WhenotherdivisionsofIGSareinvolved theseatpriceissometimesincreased Othertimes theadditionalservicesarepricedseparately Eachtimeacustomerasksforsomethingnew themanagementteamofWorkgroupServicesdoesamarketsegmentanalysistodetermineifitissomethingthatshouldbeaddedtotheportfolioofrepeatablesolutionsorservices Theoverallobjectiveistostandardizecustomsolutionssothatpricescanbeloweredforothercustomers ValuepricingisnewtoIBM andisthecauseofmuchinternaldebate Seniormanagementisdrivingadoption Pricingmethodology Baseitonthe areasofpain thatareaddressedforthecustomerDeterminewhatthevalueistothecustomerofhavingNotesorExchangeseatsrolledoutquickly Streamlinetheprocessofdeterminingwhatmessagingserverscost andhowmanyadministratorsareneededProvidescalingservicestocustomers thatis helpthemdeterminewhenresourcesneedtobeaddedasasystemgrows IBM WorkgroupServices Servicessalesanddelivery WorkgroupServicesdeliverstheentirepackageintermsofserviceinfrastructure Generallytheyputeverythinginplace haveaconferencecall outlinetheprocedureforusingtheapplicationandthecustomerisoffandrunning Someend userapplicationsupportisprovidedbypartners OccasionallycustomersasktorentaNotesadministratororhavedirectaccesstooneatanIBMServiceCenter Thisisacustombid providedasneeded NotableWorkgroupServicespartners IntraLinks indeliveryofanInternet baseddocumentdistributionandtransactionmanagementsystemforthesyndicatedloanmarket InternationalConsultingServices atraditionalAS 400BusinessPartner TheyhavedevelopedanapplicationcalledWorkfaceforsmallandmedium sizedcompaniestofacilitateOSHAreporting Today approximately10 15percentofrevenuecomesfromindirectsalesthroughpartners ThisisexpectedtogrowastheApplicationsServiceProvider ASP marketgrows TherestissoldbyIBMaccountmanagersandexecutives IBM NetfinityandExchange IBMisagnosticintermsofthemessagingplatformtheywillimplement ThechoicebetweenNotesandExchangeisdeterminedbythecustomer IGSisfullyrampedupandpreparedtodeliverbothNotesandExchangesolutions ThereisaverylargepracticededicatedtomanagedoperationsforExchange Othercompaniesweinterviewed WangandDell havenotseenapushfromIBMonewayoranotherontheNetfinityissue TherespondentfromWorkgroupServicesencountersthreemodelsformessagingservicesdelivery ServicesaimedatenablingcustomerstodoitthemselvesManagedoperationsNewservicesthroughASPsNetfinityisviableandusedinallofthosemodels IBM IGSandLotus TherelationshipbetweenIGSandLotusbeganwiththeAT TNetworkedNotesprogram NetworkNotesevolvedintotheNotesPublicNetworkstrategy IBMwasjustanotherNotesNetworkproviderintheearlydays IBMdealtwithLotusonthesameplayingfieldastheotherPublicNetworkProviders WhileLotusandIBMwerecompetingwitheachother theyknewtheyhadtoworktogethertovalidatethemarketplace WorkgroupServicesisasurvivingentityfromthatrelationship IBMistryingtoleveragelessonslearned movingforward DominoInstantHostisstrategic WorkgroupServiceshasbeenworkingwithLotustodeveloprentableapplicationsbasedonInstantHost ItcarriestheIBMBusinessApplicationsCenterbrand IBM IGS LotusandServicesDelivery IGSworkscloselywithLotusaspartofLotus strategytoworkwithlargeservicesproviders IGStargetstheenterprisesegment globaltwoorthreethousand andhasastrongholdinthisspace Theconsultativesellisimportant Lotushastheirownconsultinggroup whichdeliverssimilarofferingstothoseprovidedbyIGS TodaytheoverallshareofWorkgroupServicesbusinessin