Say What? IBM Plucking Off MS Small Business Server Partners?

I’m a bit concerned with the undertone developing in the SMB technology community where many Microsoft partners privately express to me that the Microsoft Program has gone 80/20. That is, the focus is on select elite upper-caste SMB partners and their peers (typically upper-middle class males – this is the top 20%) that bring in 80% of the licensing revenue. Engaging in an 80/20 strategy is fraught with issues including creating opportunities for your competitors.

Surely there is some SMB ISV out there that wants the 80% whom I like to call our SMB Nation tribal members aka Joe the Plmbers with greater ethnic economic diversity?

That SMB ISV is IBM with its Lotus Foundations product and today it is reporting it is plucking off MS small business partners at an alarming rate of over 200 per month.

Below you will find the press release from IBM in its unchanged entire format. Note that over the summer I will be testing Lotus Foundations side-by-side with SBS 2008 and writing an article on my findings for release at my 7th SMB Nation Fall conference in Las Vegas (October 2-4, 2009).

Submitted for your approval:

200+ Microsoft Partners Per Month Flocking to Sell IBM Lotus Foundations Appliance

ARMONK, N.Y. — June 4, 2009 — Facing waning demand for Microsoft products, more than 1,000 Microsoft Business Partners have already signed up to sell IBM Lotus Foundations ( “office-in-a-box” appliance for small and medium sized businesses (SMBs) in the first five months of 2009.

According to Microsoft Business Partners, sales of Microsoft’s Small Business Server (SBS) software bundle have stagnated due to lack of innovation and partner dissatisfaction with their inability to add solutions and services. Microsoft partners are looking for an alternative that provides SMBs with more collaboration computing power for less money and more reliability in these challenging economic times.

“Lotus Foundations is a complete, cost-effective solution that easily scales as a business grows. When you add users, you know exactly what it will cost and the functionality you’ll get,” said Bernie Leung of Mesa Technology. “With Microsoft SBS, you always have to worry about what additional licenses you will have to purchase – the SQL client is just one example.”

In addition, some Microsoft partners have expressed disenchantment with Microsoft’s new strategy of battling Linux encroachment in the SMB market by offering a skeletal version of Windows Server. Named “Microsoft Foundation Windows Server,” it can be positioned as a loss leader to up-sell customers a variety of other Microsoft products. Seeing rising customer demand for lower cost, more secure and open source alternatives, many Microsoft partners are looking to sell Linux-based solutions.

IBM Lotus Foundations provides all the hardware and software needed for a business to get up and running and grow exponentially without incurring any upgrade costs. The IBM product enables businesses to move to a single platform for all their IT needs, a stark contrast to Microsoft SBS, where additional software from Microsoft, as well as hardware and software from third parties must be purchased.

“And with Lotus Symphony, we don’t have to pay for Microsoft Office. Most importantly, Lotus Foundations is simple to use and easy maintain. It eliminates the expense of having a full-time IT expert on staff,” said Jose Lopez Gonzalez, CEO, Lopez y Cortina, an insurance provider in Monterrey, Mexico.

“If you sell servers to small business or non-profit organizations and you want one that has everything they need to run their network in one box that is extremely easy to manage, you owe it to yourself to look at the Lotus Foundations appliance,” said David Lawrence, President, Smart Technology Enablers.

IBM Lotus Foundations is designed to simplify the IT experience for small businesses. Before Lotus Foundations, small businesses were stuck with the many hassles and technology pains associated with traditional IT solutions.

IBM Lotus Foundations provides SMBs with positive change from the status-quo

New IBM clients such as Lopez y Cortina, Murak & Associates LLC and Calvary Baptist Academy are indicative of many small businesses in North America and around the world. For these organizations, who lack the luxury of dedicated IT personnel, keeping expenses in check is a top priority. As such, these companies are looking for ways to make dealing with technology easier.

Business partners too are looking for more effective methods to drive their business and support their customer base, and many have found that Lotus Foundations is the answer. The following are comments made by a sample of IBM clients and partners who have signed up for Lotus Foundations in the past five months.

“Lotus Foundations….dramatically improved our email platform. And instead of using disparate software, every user has the same comprehensive solutions, creating a common experience and standardized security and back-up protection across the company.” — Jose Lopez Gonzalez, CEO, Lopez y Cortina.

“For us, collaboration is paramount. With the VPN and file sharing features in Lotus Foundations, our consultants around the world can access information just as if they are in the office. And with this solution, we know our data is safe. The backup process is completely automated. It’s one less thing for us to worry about.” — Gerry Murak. Principal, Murak & Associates.

“Our IT setup consisted of a series of old desktop computers. Our file management system consisted of information stored on CDs, disks and hard copies of important documents. We needed a system to help centralize and simplify our file storage, but we didn’t have a huge budget. Lotus Foundations enabled us to implement a complete data storage system and stay within budget. And as an added savings, the included Lotus Symphony software enables us to cut all future costs tied to buying and upgrading Microsoft Office licenses.” — Kathy Rutledge, teacher, Calvary Baptist Academy.

“With Lotus Foundations, we were able to get a more complete solution and cut our costs significantly. The full year cost of our Lotus Foundations environment is equivalent to what we paid for only about one-and-a-half months with our SBS solution. That means we can spend more money on developing solutions that help our customers improve the way they do business.” — Dr. Tim Miller of EnVision.

“Lotus Foundations is like a giant aspirin for the IT headaches that plague business owners every day.” — Greg Gould of GDomino.

“The Lotus Foundations server is a wonderful device – the ease of install and configuration makes getting right to work a quick job. For the money, we could not have come close to finding this functionality anywhere else – enterprise quality in a small business box.” — Robert Thresher, owner, Thresher Enterprise Systems.

“With Lotus Foundation remote management, we have eliminated 50% of the support travel time allowing us to grow our Managed Service Provider division. As a result, we have grown sales and our customer base by 80% in the year 2008. With all the technology opportunities today, we are seeing a large number of customers looking for long term solutions outside of Microsoft, and Lotus Foundations and IBM Symphony are two great alternatives that offer small business organizations an IT solution that grows as their business grows – and adds value without taking away from their bottom line.” — James Sulfare, Solinkit, LLC.

“Lotus Foundations allows us to service our more than 100 different clients remotely. In fact, of all of the clients we’ve serviced that have IBM servers running the Lotus Foundations, we’ve only ever met two face-to-face. Lotus Foundation’s ease of setup and management allows us to ship out an unconfigured unit to our client. Upon receiving the unit, I have frequently instructed over the phone, the secretary — with zero computer experience – on the setup and configuration of the unit,” said Hari Boukis, owner, Advertising Magic.

“We chose Lotus Foundations from IBM for its high availability and ease of maintainability. Lotus Foundations also helps companies keep costs down do to its reliability, all-in-one office software suite, ease of use and maintainability. Additionally, since our solution is Windows-based, the ability to run Windows applications alongside Linux applications makes the Foundations environment a complete SMB solution.” — Jim Abraham, Managing Partner, Line Fifty Software.

For more information about IBM Lotus Foundations, visit

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Respectly – your fellow “Joe The Plumber” in SMB.


CEO | SMB Nation

Co-author: Microsoft Small Business Server 2008 Blueprint



Filed under Life Happens

3 responses to “Say What? IBM Plucking Off MS Small Business Server Partners?

  1. David

    Just make sure you try to delegate more than one person to attend a meeting on your behalf.
    Perhaps exchange some documents with other compaines without saving as RTF.
    How about sync a Windows Mobile or iPhone out of the box.
    The point I’m trying to make is do SMBs want to use Lotus Notes? Really?? How about you run up the Novell Linux / Groupwise / based SMB offering too and examine why even though it is free for less than 5 Users I’m yet to see one in the wild

  2. You are going to like Lotus Foundations. It’s an IBM/Lotus product, but only sold through Business Partners. No 80/20 struggle. The OS runs as firmware (Linux), but can provide Windows Server apps through virtualization. I had the good luck to see Xerox demonstrate their product integration with it–Amazing. Talk to some Business Partners to get a feel for it. It’s not just an IBM retrofit of MS SMB into a Linux white box. It’s a business model.

  3. Have you seen Lotus Notes lately?

    If Fortune 100 can trust it, then I’m sure its in the advantage of a SMB to trust it as well.

    I synch my phones with Notes all the time and I did it without reading anything or consulting with any notes experts.

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