ANTenna Blog -- Internet/Web

As an illustration of how far the mighty have fallen, there was barely a blip on the radar when industry behemoth IBM unveiled the newest partner, Alcatel-Lucent, supporting its attempt to become a key supplier of unified communications solutions.

With the advent of integrated data, voice, and video communications, unified communications has become a hotbed, one where companies, such as Cisco and Microsoft are making major investments with the desire of emerging as industry leaders. In its latest announcement, IBM provided the instant messaging and Web collaboration portion of the unified communications solution, and Alcatel-Lucent supplied the voice communications component. The two companies delivered an integrated audio conferencing solution for IBM Lotus Sametime customers. OmniTouch My Teamwork for IBM Lotus Sametime (catchy little name, eh?) provides workers with click-to-conference capability from Lotus Sametime and IBM Lotus Notes as well as audio conference scheduling and management from Lotus Sametime Web conferencing. The product eliminates the need for third-party audio conferencing services, does not require additional client to download, and works with existing telephone systems or softswitches. In sum, the product allows companies to bypass third party services and reduce their audio conferencing costs. While that sounds intriguing, IBM faces an uphill battle in convincing small and medium businesses to use its product.

That’s ironic because at one time, IBM was a prime supplier of collaboration software and - believe it or not -- its Lotus product line was giving Microsoft’s email and collaboration tools a run for their money as the most popular option among businesses. Now, IBM has become a bit player, and maybe not event that, in the highly competitive field for a couple of reasons. The first is competition. Through the years, IBM has struggled to keep pace with nimbler, more aggressive competitors. The company was able to deliver highly functional products, but they often came at high prices, which scared away potential customers, especially small and medium businesses.

IBM also has been a company in transition, moving away from supplying hardware and software to delivering IT and increasingly business services. In its last fiscal quarter, services revenue accounted for $13.5 billion compared to hardware and software revenue of close to $10 billion. Rather than compete against companies, like Cisco and Microsoft, IBM has set its sights on business consulting services and is banging heads with companies, like KPMG and Infosys, and outsourcing vendors, such as EDS and Hewlett-Packard. IBM has struggled in making this switch: its yearly revenue dipped from $96 billion in 2004 to $91 billion in 2006. Part of the reason for the decline was its decision to exit the PC and laptop markets because of intense pricing pressure. Such drastic decisions underscore the Goliath’s challenge in balancing long term and short term goals in highly competitive, dynamic markets. As part of that balancing act, the company has recently emphasized the small and medium business sector, a market the company traditionally ignored.

So, should these companies give IBM a chance to meet their unified communications needs? Probably not at his juncture. The vendor has a lot to prove in its quest to be a significant player in this space. While Microsoft convinced more than 50 third parties to support its latest unified communications efforts (Communications Server 2007), IBM barely has a handful of supporters. Also its products work best in an all Lotus environment, something few small and medium businesses have. In addition, questions remain about the company’s long term commitment to the unified communications market – IBM’s software strategy has been scattershot at best recently. At the moment, Microsoft and Cisco present users with much more compelling cases for companies in need of such solutions.

Do you view IBM as a key player in the unified communications market? Have you ever taken a look at its products? What would IBM have to do in order to convince you to buy its software?