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Microsoft and IBM cloud collab claims deflated

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You have to leave it to IBM and Microsoft. The two won't let a small thing like a shrinking market douse the fire of a heated rivalry over business collaboration wares.

The business collaboration market is hot right now. Red hot! Well, hypothetically red hot. But that's reason enough for these software giants to make some very strong competitive claims.

Yes, there's some major potential for growth on the horizon, with the promise of getting to sell the same biz collaboration wares to companies all over again by moving the platform from in-house equipment to boffo and new cloud services. But for now, opportunities for the tried-and-true in-house method continue to decay.

What's a global software giant to do? When the going gets tough, the tough can always fudge the numbers to make things look good.

IBM and Microsoft have a storied history of slinging the number of "seats" they've scored for their respective platforms, Lotus Notes and Domino numbers clashing with figures for Exchange and Sharepoint. Particularly around Lotusphere, IBM's annual conference to hype its collaboration wares. With market growth tepid but expectations for the cloud on the rise, this year's funny numbers have hit the ceiling.

The first smack came before the show when IBM announced it had plucked most of Panasonic away from using Microsoft Exchange and into its LotusLive hosted email and collaboration software.

The company estimated the deal won it 100,000 seats initially, increasing to 300,000 over time.

But then came Julia White, Microsoft's director of Exchange product management, claiming IBM's story is complete bull.

"These claims around Panasonic compel me to shed some light on the real facts," she wrote. "Panasonic was already using Notes worldwide, and fewer than four per cent of their employees were using Exchange Server - most of them in North America. As with many recent IBM claims, this win is little more than keeping an existing customer. Then again, with a multi-year trend of declining Lotus market share, perhaps keeping an existing customer is a win."

Very nasty. When asked to comment, an IBM spokesman told us the portion of Panasonic workers using Exchange is actually "much much higher" than four per cent - although he said the terms of the deal won't allow him to provide a specific number.

"Microsoft is not telling the truth," the spokesperson claimed.

Fine - but who is?

In another of IBM's Lotusphere announcements, the company claimed: "From 3Q 2008 to 3Q 2009, IBM's social collaboration software install base grew by 34 per cent."

But by simply checking back to it's third-quarter earnings report, the company said that tevenues from Lotus software - "which allows collaborating and messaging by clients in real-time communications and knowledge management" - dropped 9 per cent over that same period.

Has IBM been giving the software away for free? When asked to explain how Lotus revenue shrunk while its user base grew by double-digits, IBM said the 34 per cent growth number was actually only counting Lotus Connections and Quickr software - which accounts for less than 20 per cent of the overall breadth of the Lotus portfolio.

"It's about the total size of the pie," the same IBM spokesman claimed. "The IBM collaboration segment overall is either holding or gaining market share in each of its submarkets against the competition. The problem is the whole pie is shrinking. Microsoft is losing more seats than IBM is."

The fires, meanwhile, are stoked to show improvements with the expected growth in cloud computing. IBM predicts the cloud market will grow from $47bn in 2008 to $126bn by 2012 based on "various market estimates."

Competitive claim and counter claim aren't new for this industry. And not in the least for IBM and Microsoft. As these two hawk their wares for the cloud, be sure to take such claims with an extra shovel of salt. ®

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