When Daimler announced the switch from Notes to Outlook, somebody mentioned a market share of Domino/Notes of 21% in Germany. I wondered where they got that number from.
I started to crunch a few numbers myself and first looked at my home market. There are about 400 more or less active Domino customers. Switzerland has about 300‘000 companies with roughly 40‘000 of a size needing a mail server. That‘s a market share of 1%. And that is being nice, since almost everyone of those companies have mail and use some sort of mail server, either their own or something „in-the-cloud“.
Globally IBM has 47‘000 Domino customers. Even if they were all in the US it would also be a market share of about 1%. What do they count? Don‘t tell me that they count user licenses. That would be statistical nonsense, since not every element of the sample takes a decision to use Notes or Outlook. There are not 145 million decisions for Notes, only 47‘000. Now what are they counting? I don‘t have a clue. Servers? That would be unfair, since you need many more Exchange servers then Domino servers for the same number of users. Global 500 companies only? Or enterprise accounts?
Now what? Until somebody tells me, how they make the market share up, I stick with my estimation of a global market share of 1% for Lotus. I know, this number is not fair, because I also count companies which have just a few applications left.
Now let‘s see if somebody can explain, how the market share is calculated. In a second post, I will write about the results and what to do with it.
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Radicati reports 192 million Notes users and growth of 8% per annum. If your 1% figure were right, that would leave a total market of 19,200,000,000 (19.2 billion) in a world where even Facebook only get up to a bit over 500 million.
Sure, Radicati’s methodology might have errors. But they had a definite methodology.
(Disclosure: I work for IBM, but I have no special insight on market share and the views expressed are my own, not IBM’s.)
Counting companies as if they were all equal is even more nonsensical than counting seats. If one software was used in the top 100 companies in the world, and another was used in the smallest 10000 companies with at least five people (approx 50000, since there are plenty of companies that small), do you have any doubt which software was more widely used? Actually, the single top company in the world (Wal-Mart with 2.1m) has 42 times the number of people in the smallest 10000 companies with at least five people.
So, yes, headcount does need to be taken into account at some level.
@Anthony: The 1% was companies only. No seats. Sure Radicati has a methodology and I would like to know it. If you just count Notes users, you would also have to count just Outlook users. That wouldn’t be good for Notes either, which I would hate.
BTW: 192 million users on active maintenance or just new licenses sold in the last 20 years? That’s the problem, the number itself doesn’t say a lot. I give you another example. About 5 years ago, there where 60’000 companies using Notes/Domino. Today there are 47’000. Over 20% less. But Radicati claims 8% growth p.a. The picture is somewhat wrong.
@Ben: That‘s exactly why I am asking. What are they counting? Is it just a well defined market segment?
The number of active users on maintenance is an IBM secret. There are rumors about it but you will probably never get any official data on this.
The number of accumulated sold Notes seats is the number that has been pushed at Lotusphere in the past. As long as you sell at least 1 new license per year it is a number that is always growing but never declining. Very attractive for public announcements. It does not count how many seats are getting abandoned so for me this is just a (quite impressing) marketing number.
There are figures by revenues. The advantage is that cheap products have little revenues, local players are getting less weight and in theory the more expensive your product is the more revenues one can generate. IBM loved revenue statistics as it gave IBM a solid number 2 in the market. Unfortunately since the Lotus devision had a massive lost in revenues that has always been explained as happening outside of Lotus Notes and Domino (probably all SmartSuite and Worklow NOT) figures about revenues have lost some ground.
Then there are figures that just concentrate on a certain segment of the market. Global companies, no SMB, lots of seats and lots of revenues in this market segment. It produces numbers that result in a 80%+ for Microsoft and IBM. It has little to do with your companies statistics but it very well represents a target market for IBM.
Then there are statistics that Microsoft loves. They list Fortune 100/500 /German DAX 30 companies (I don’t know details about Switzerland) dividing them by either using IBM or Microsoft for collaboration and adding a list of recent Exchange converters.
Impressive numbers indeed. IBM is mostly looking like a small village in France surrounded by Romans. The difference is they don’t own a magic potion.
At the end market share data is not so much important.
If your biggest customer is using Lotus then you probably won’t stop making business with him because he is using a product that has a declining market share. If you are about to invest money things can be more complicated.
There are companies that heavily invest in the Lotus market like GROUP (ignoring that they said good-bye to some traditional Notes business by selling Gedys on a management buy-out). Whether this is going to be successful will be seen in a few years.
A niche market sometimes can be more profitable than selling in the mainstream channel.
An additional factor to complicate matters is that there is a difference between market share from IBM’s point of view and from a business partner’s point of view. I have many customers of my software who are not still paying maintenance, but still using the software. That is legal and fine, as the license is perpetual. They just don’t get support or upgrades. IBM has much the same situation. There are many companies using Notes/Domino who are not on active maintenance. Do they count?
From IBM’s point of view, they are virtually worthless, but from a business partner’s point of view, they are still valuable. I sell software to many companies who are not now, and have not been recently, „active“ customers for IBM. I know consultants who routinely do work for customers who are not „active“ customers for IBM. They still count as market share. If every current customer of IBM were to drop maintenance, the market share for Notes/Domino would not go to 0%, at least from a business partner’s point of view.
Also, I am not trying to find the number that most helps Notes/Domino look good. There are gazillions of Outlook users and Gmail users who do not pay Microsoft or Google a penny. Similarly, there are lots (although not gazillions because it was never bundled with Windows) of Notes users who do not pay IBM a penny. They may still count as market share to me, a business partner, and perhaps to IBM, when trying to come up with marketing numbers, but perhaps not to IBM when it comes to accounting numbers.