Vista and Lotus: Knowing when to let go of a brand

Microsoft spent an absolute fortune on the Vista brand. In marketing terms, the Vista campaign was huge by any standards, and was a big success insofar as raising awareness of Microsoft’s next-generation Windows offering was concerned.

Of course as we all know, things didn’t work out too well for Microsoft. The the new features and functionality of Vista turned out not to be as game-changing as Microsoft had implied in its messaging. To make matters worse, the product wasn’t really ready for mainstream use at the time it was launched. Initial expectations were therefore not met, leading to a significant backlash in the media, and ultimately among users. In the business context, many made the decision to defer upgrading because of the perceived risk and lack of incremental value, which is why XP is still the dominant version of Windows in corporate environments today.

The irony is that once Vista had settled down over the course of the first year or 18 months, it turned out to be a respectable operating system; certainly fit for purpose, and potentially offering some significant benefits, especially from an operations and risk management perspective in larger enterprises. But by then it was too late. Regardless of what was going on with the product, the Vista brand had accumulated too much negative baggage.

Painful though it must have been, we have to give Microsoft credit for realising this, pressing the big red reset button, writing off its investment, and starting again under the Windows 7 banner – a tactic that seems to have paid off.

There is a lesson here, perhaps, for another vendor that has accumulated significant brand baggage that is getting in the way of customers appreciating the potential of a couple of its product lines. Back in the 90s, IBM lost the battle for dominance in the email and calendaring server arena with Lotus Notes and the back-end Domino server that drives it. For reasons that don’t matter now, Microsoft stole the market from under its nose.

While IBM still argues the toss around market statistics – frequently trying to make the case that Lotus Notes/Domino is still as successful as Exchange – the following chart from our last Reg barometer study sums up the real situation.

The data we are looking at here predominantly relates to respondents from the UK and USA. Based on this, IBM’s footprint looks to be about half that of Microsoft in organisations with more than 5,000 employees, dropping proportionally as we look to smaller entities. Significantly, however, whereas the commitment and sentiment associated with Microsoft Exchange is overwhelmingly positive, Lotus Notes/Domino is much more likely to be regarded as legacy. This is particularly noticeable in the corporate sector where almost half of respondents using the IBM solution put it into the legacy category.

To be fair, this picture is from almost a year ago, and though it hadn’t changed that much from the previous year (apart from the Lotus footprint shrinking a little), IBM has been doing some pretty good stuff recently. The latest Notes 8.5 release, for example, looks excellent, and if feedback from LotusSphere user group events is anything to go by, the response from the installed base has been very positive.

In addition, a number of other offerings have recently emerged or been enhanced under the Lotus brand in hot areas such as social computing and unified communications, which provide some great options for Notes/Domino shops to extend their investments in a future proof manner. With this in mind, it’ll be interesting to see if we pick up any changes in commitment and perception when we run our next Barometer (watch this space).

In the meantime, there is a big question around whether Lotus offerings will make a significant impact outside of the Notes/Domino installed base, and the challenge here is not so much relevance and value in an absolute sense to a Microsoft Exchange shop, for example, but perceptions around the Lotus brand. There are two issues here, both stemming from the fact that the words ‘Lotus’ and ‘Notes’ have been tied together so strongly over time. The first is that as the latter acquired its legacy image in the broader market, that couldn’t help but rub off on the former.

Even if IBM is successful at refreshing the Lotus brand, however, and creating a more positive and up-to-date feel around it, there is still a second problem to contend with. This is that the same historical association between ‘Lotus’ and ‘Notes’ leads to the assumption that anything carrying the Lotus name is probably aimed at extending or enhancing the Notes/Domino environment. Given that Exchange shops generally have no appetite for considering a switch to the IBM alternative for core email and calendaring, the likelihood is therefore that they simply dismiss other Lotus branded offerings, such as unified communications and social computing solutions, as not being relevant to them.

Ironically, the latest ‘Lotus Knows’ marketing campaign runs the risk of actually aggravating the situation. While the fundamental idea of trying to create and propagate enthusiasm among end user influencers has merit, and there has reportedly been excitement within the ‘Lotus Loyal’ installed base, the whole thing revolves around the benefits of an end-to-end Lotus environment, with Notes/Domino featuring prominently.

This simply reinforces the above mentioned assumptions and makes it even more likely that Exchange shops, 97 perw cent of which (according to our barometer data) indicate continued committed use, will totally ignore what IBM has on offer under the Lotus brand, even though it might prove useful to them.

Coming back to where we started, against this background, there is a strong argument for IBM grasping the nettle as Microsoft did with Vista, and either letting the Lotus brand go altogether or at least re-branding some of the newer stuff it has stuck under the Lotus banner. Admittedly, it’s not quite the same situation as Microsoft faced in that the Lotus brand is not tarnished in the same way as Vista; it’s more a case of the brand being entrenched in history and having become a bit tired over the years.

Nevertheless, by burdening a lot of really cool software with so much historical baggage, IBM is not doing itself or the broader market any favours. The only party to benefit is arguably Microsoft, which will continue to pick up a lot of unified communications and social computing business in Exchange accounts by default, with an important set of alternatives from IBM not even being considered.