IBM LotusLive Snags Panasonic to Challenge Google in the Cloud

Challenging Google in the cloud computing market for messaging and collaboration software, IBM landed Panasonic as a customer for its LotusLive SAAS programs. More than 150,000 workers at the Japanese electronics maker will use IBM's hosted e-mail, social networking Web conferencing, file sharing, instant messaging and project management applications. The company unseated Microsoft's Exchange e-mail server and a number of other collaboration solutions, including IBM's original on-premise Lotus Notes and Domino server. The news comes days before IBM kicks off Lotusphere in Orlando, Fla.

IBM has landed a major customer for its cloud computing initiative in Panasonic Corporation, with 150,000 employees of the Japanese electronics maker using IBM's LotusLive hosted, Web-based collaboration software.

When fully deployed this year, it could be the largest SAAS (software as a service) implementation ever. Panasonic employees will use LotusLive applications for e-mail, Web conferencing, file sharing, instant messaging and project management, all of which are hosted on servers in IBM's data centers.

Financial terms of the deal, which IBM closed in November, were not disclosed. However, the sheer number of employees using LotusLive puts the contract in the millions of dollars, Sean Poulley, vice president of online collaboration for Lotus Software, told eWEEK ahead of the company's annual Lotusphere event, beginning Jan. 17 in Orlando, Fla.

The LotusLive iNotes hosted e-mail application costs $3 per user, per month, but Poulley said use of LotusLive apps will vary from one employee group to another.

For example, Panasonic will incur a higher cost for employees who use iNotes along with LotusLive's Web conferencing and file sharing apps. Monthly use per employee could run $50, but Poulley said he figures the range will be somewhere between $3 and $15 per employee.

Moreover, the number of users could potentially double if enough employees use the LotusLive Connections social networking software to collaborate with external partners, suppliers and customers. IBM is banking on this corporate firewall extension to grow the collaboration software segment of its cloud computing business.

The size of the deal dwarfs the biggest enterprise contracts for Google Apps, easily the leading cloud computing collaboration platform used by more than 2 million businesses ranging from five to tens of thousands of users.

A Google spokesperson said Rentokil Initial, with 35,000 users, the City of Los Angeles, with 34,000 seats and Valeo with 32,000 users, are among its biggest contracts. Google offers its Gmail, Docs and VOIP programs free as Google Apps and for $50 per user, per year for a premier edition.

IBM's value proposition is that customers will start small with iNotes for $3 per user, per month, then work up to Web conferencing, project management and social software if they like what they get from IBM's Web-based e-mail.

Yet IBM didn't poach Panasonic from Google. Instead, the company unseated Microsoft's Exchange e-mail server and a number of other collaboration solutions, including IBM's original on-premise Lotus Notes and Domino server, Poulley confirmed.

In some ways, the Panasonic deal is a bit of a pre-birthday celebration.

IBM's rendering of Lotus as a cloud computing suite began at last year's Lotusphere, when the company renamed its Bluehouse hosted extranet solution LotusLive Engage and extended the brand with the Lotus Connections hosted social software and iNotes hosted e-mail.

Over the course of 2009, Poulley said small and medium businesses (SMBs) and large enterprises have adopted LotusLive's collaboration services to the sum of 18 million seats worldwide. These include users at Trajkovski & Partners Consulting in Skopje, Macedonia, Collaboration Matters Limited in the U.K., and Netherlands-based RealConnections.

Preparing to broaden the international scope of the LotusLive portfolio even further, LotusLive Engage and LotusLive Connections are now available in Brazilian, Portuguese, French, German, Italian, Japanese, Korean, Simplified Chinese, Traditional Chinese and Spanish.

International expansion will be key as IBM continues to challenge not only Google, but Microsoft, whose entrance into cloud collaboration this year will immediately make it a force to be reckoned with at the bargaining tables of corporations worldwide. Cisco Systems and smaller players such as Zoho and others are also vying for the same business.