Earlier this year, there was a lot of excitement around IBM's initiative for small business named Lotus Foundations. It was an impressive UC appliance made possible by IBM’s 2008 acquisition of Net Integration Technologies which simplified technology implementations. Lotus Foundations was centered around a hardware appliance, but now IBM intends to discontinue that appliance. The company is working to repackage the solution for release in 2011, slightly renamed as IBM Foundation.
The appliance, featured in the IBM keynote at VoiceCon 2009, was impressive. The OS (Linux) was embedded in the chipset, making it highly reliable. It had no monitor, keyboard, or DVD drive, and utilized a streamlined setup procedure and the cloud for rapid implementation and management. Its software offered a comprehensive solution for communications and collaboration and included SameTime (presence), Symphony (Office productivity), and Notes (messaging). For a the voice component, IBM announced partnerships with Broadsoft (cloud), Mitel, ShoreTel, and NEC. An integrated, best of breed strategy, cost effective UC in-a-box solution optimized for small business.
IBM was so confident that it replaced the IBM Cube with the Lotus Foundations solution in its small business Line-up. The IBM Cube was a similar one-box solution with pre-loaded productivity and communication components including an Asterisk based voice solution from Digium.
The strategy and technology seemed pretty sound, but there were a few bumps in the road in 2010. For starters, Mitel and BroadSoft effectively backed-out of the program. Stephen Beamish of Mitel said, "In building out the solution, in partnership with IBM, we soon became aware of a shift in requirements from many small businesses. As a result we decided other approaches might better meet the needs of the small business more effectively."
NEC and ShoreTel progressed fairly aggressively. NEC's Sphericall product was fully integrated into a virtual container on the appliance and was performing well in pilot programs. ShoreTel was further along and actively marketing its solution. It featured Lotus Foundations prominently at its 2010 dealer conference to attract more reseller participation. ShoreTel and ScanSource Communications jointly created a program to develop dealers and provide them specialized support and delivery services.
It became apparent that small business was not as easy a win as initially thought. For one, there were channel issues. In attempts to protect customer relationships, there were concerns and restrictions about whose dealers and reps could sell what to whom. Even though the appliance could support up to 500 users, it was targeted to businesses generally with less than 50 users, a bit small for the involved channel players. There were brand recognition challenges as SameTime, Symphony, and Notes were not as well known with small businesses as Microsoft’s products are. The appliance model also proved less financially attractive than initially assumed, and it was pigeonholed in small business--unable to meet the needs of the branch offices of a larger implementation.
Now, with hindsight, it seems clear the model will be better suited for larger, mid-market customers. IBM intends to use its general purpose servers in future releases, instead of an appliance. NEC and ShoreTel remain committed and intend to leverage and expand their investments, but they also expressed surprise at IBM’s decision to end-of-life the appliance. IBM says the action was necessary due to "slower than expected SMB adoption, issues developing channels, and the economic climate." That is the new reality; many organizations are less tolerant of slow adoption. This year, we saw Microsoft and Google quickly terminate Kin and Wave respectively. Last year, Microsoft terminated its ResponsePoint small business telephony solution.
An interesting point here is that neither IBM nor Microsoft had a voice solution and needed one to complete their UC offering. Microsoft decided to develop its own, its most recent incarnation being Lync 2010. IBM opted to partner instead, which usually offers the advantage of speed to market. Microsoft initially aimed for large enterprise and IBM initially aimed for small business. Both companies made some missteps, yet continue to improve their UC offerings.
The latest development does not say that small businesses do not value or need a UC solution, just that they will need to find one elsewhere. But evidently, they already were. All the companies involved seem to be trying to make the most of the situation. It certainly isn't the first misfire and is unlikely to be the last.
