Software industry graveyards are littered with the remains of products that tried to challenge the dominance of Microsoft Corp.'s Office software. Some of the tombstones have the letters IBM carved into them - remember SmartSuite? You can still buy it, but almost nobody does.
So why is IBM Corp.'s Michael Rhodin, general manager of the Lotus software division in Westford, taking another run at Office, with a free office software alternative called Lotus Symphony? After all, Lotus's core business is collaboration software, like its Notes and Domino products, which help business teams work together from anywhere in the world. What's that got to do with word processors and spreadsheets?
Quite a lot, it turns out.
Rhodin's betting that Symphony will help IBM pry loose millions of dollars now being spent on Microsoft Office. He wants customers to spend it instead on Lotus Notes and Domino, and on an array of collaboration and social networking products unveiled by Lotus over the past year.
"It's freeing up money in people's budgets to spend on innovative new ideas, as opposed to continuing to pay for old ideas," Rhodin said.
His new ideas include Lotus Connections, a product that creates Facebook-like communities for corporate workers. "Many organizations are very structured," Rhodin said. "Social software breaks down all of those barriers, basically creates everybody as peers within the organization, and information flows much faster around the organization than it does through a traditional management system."
Lotus is also pushing Quickr, a system for building workspaces where teams can share ideas and documents, and an upcoming "mashup" program that will let workers assemble information from a variety of corporate databases into a single data-rich overview.
Microsoft has made major inroads with Office SharePoint Server, a collaboration product that can be integrated seamlessly with Microsoft Office. Last year, Microsoft claimed sales of 85 million SharePoint licenses worldwide, generating $800 million in revenue, partly because SharePoint and Office work well together.
Researchers at Radicati Group, a Palo Alto, Calif., research firm, estimate that SharePoint has captured 34 percent of the business social software market, compared to just 3 percent for Lotus Connections.
Microsoft Office also plays nicely with Microsoft's popular Exchange e-mail server. Again, that translates into market leadership. Radicati estimates that Microsoft has 34 percent of the corporate e-mail market, compared to 24 percent for Lotus Domino server.
Rhodin sees the intimate linkage between Office and Microsoft's server products as a major competitive threat to Lotus, but also as a big target for Symphony, a software suite that does most of what Office does but doesn't cost a dime.
Businesses that move away from Office are more likely to be buyers of Lotus collaborative products. Also, cutting into Office sales, even a little, draws money from a key Microsoft revenue stream.
"It's the main part of their business," Rhodin said of Microsoft Office, which commands over 90 percent of the office software trade. "If they lost that monopoly, it'd be a big problem for them."
Still, only several hundred thousand copies of Symphony have been downloaded since its introduction in September, compared to 450 million Microsoft Office users worldwide.
"I think it has potential for taking some business from Office, but I don't see any precipitous drop," said Dwight Davis, a senior analyst at the research firm Ovum Ltd.
But Rhodin does point to the dramatic impact of IBM's 1997 decision to support the free Linux operating system. Back then, Linux was considered little more that a geeky toy for computer hobbyists. But IBM's backing legitimized Linux, and today the software is found in critical applications worldwide.
Rhodin expects a replay. "The level of IBM endorsement behind what we're doing was a signal to a lot of companies to take a serious look at this," he said.
In addition, Rhodin believes that in a slowing economy companies are less willing to pay hundreds of dollars a pop for Office, a complex product with far more features than most users need.
Mike Gotta, a collaboration software analyst for Burton Group in Salt Lake City, said it will take years for Lotus's Symphony effort to make a dent with corporate users.
But he added that thanks to new products like Connections and Quickr, Lotus's overall product catalog is finally strong enough to allow the company go head to head with Microsoft in the collaboration market.
"All of a sudden," he said, "IBM's firing on all cylinders."
Hiawatha Bray can be reached at bray@globe.com.
