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Lotus still leads groupware market

Following a year of fierce head-to-head competition between Lotus and Microsoft, the IBM subsidiary ends up on top for another year in the worldwide groupware market.

Following a year of fierce head-to-head competition between Lotus Development and Microsoft, the IBM subsidiary ended up on top for another year in the worldwide groupware market.

According to a survey conducted by International Data Corporation, Lotus Notes and Domino retained its market lead, capturing 13.44 million new users worldwide in 1998. Microsoft Exchange followed with 11.78 million new users worldwide, with Novell GroupWise settling into third place with 4.51 million new users.

Overall, IDC estimated the worldwide package software market has grown to $135 billion in 1998 based on preliminary findings.

"The continued globalization of business, the demand for excellence in customer support, and competition that requires more "finely grained" information helped offset the effect of continued price pressures we see across segments," Tony Picardi, an IDC analyst, said in a statement.

Picardi estimates that increased integration between businesses and their partners in the areas of information sharing, supply chain management, and electronic commerce will drive packaged software growth in the 14-percent range across all software segments through 2002.

As far as the European groupware market goes, in Western Europe Lotus Domino/Notes maintained a healthy lead over its competitors with 3.72 million new users, followed by Microsoft Exchange with 2.99 million new users and Novell GroupWise with 941,000 new users.

According to IDC, Lotus Domino/Notes maintained its market dominance in total users worldwide by reaching 29.57 million at the end of 1998, ahead of Microsoft Exchange with 21.19 million and Novell GroupWise with 14.21 million.

Lotus gained momentum towards market dominance in Western Europe, as Domino/Notes total users in the region reached 8.65 million, followed by Microsoft Exchange with 5 million and Novell GroupWise with 3.19 million.

"Lotus Domino/Notes managed to stay ahead overall, despite significant gains by the two-and-a-half year old Microsoft Exchange product, especially in the U.S. market," said Mark Levitt, research director of IDC's Collaborative Computing research service. "The strength of Domino/Notes in two markets which are critical for future growth--Europe and Asia/Pacific--bodes well for Lotus in the future when rising penetration levels are expected to constrain growth in the U.S. market. Novell is experiencing growth but not at the same pace as the other two."

IDC explained that these estimates may differ significantly from vendor reported numbers due to the fact that IDC's estimates includes licenses for software actually deployed by organizations to host internal users in 1998, and do not include licenses distributed but not actually used, or licenses sold by these and other vendors to ISPs and other service providers to host subscribers.

The good news for Lotus comes just days before the company kicks off its annual Lotusphere user conference in Olrando, Florida.