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Whatever Happened... to Notes-Based SFA?
Overshadowed by client-server and Web-based applications, hampered by some technical deficiencies, this venerable platform isn't out of the SFA picture quite yet.
For the rest of the November 1999 issue of CRM magazine please click here
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ONCE Lotus Notes was virtually synonymous with corporate messaging. With a solid beachhead in the e-mail market, the Notes environment, complete with Domino application server, held seemingly infinite promise for enterprise software. Sales automation was seen as a logical extension of Notes' collaborative, open-discussion environment. The ability to integrate contact data and sales process in the Notes client made it a force to be reckoned with. The Notes SFA market was, in short, on the verge of exploding into something big. So we were told.

Then the other shoe dropped. Before long, Lotus was locked in a two-front war for the corporate e-mail market. Microsoft Exchange offered NT integration and the popular, attractive Outlook client, while intranet SMTP/POP e-mail technologies offered an inexpensive platform and the choice and flexibility of a completely open standard.

Meanwhile, software vendors unleashed a flurry of next-generation sales automation software, snubbing the Notes development platform for stand-alone functionality that at best might integrate with Notes mail as an afterthought. Instead of taking the world by storm with a dominant system that drove the sales cycle for thousands of major enterprises, Lotus was busy just fighting for its core market.

To be sure, there were also flaws in the grand scheme to turn Notes into a universal sales platform. "Notes has some advantages as a collaborative platform in general," says Chris Selland, vice president of CRM Research for Yankee Group, "but one of the weaknesses it's always had is scalability, particularly as a database server." The trouble was that Notes is built on an object (non-relational) database, which can lead to data performance problems for an enterprise of any appreciable size.

And because of its preoccupation with the messaging market, "Lotus has done a very poor job of positioning [Notes and the Lotus Domino server] as an application development platform," says Selland. "A lot of these Notes SFA vendors don't get in the door because `Why the hell would I want to build my sales automation strategy on my e-mail system?'" Notes/Domino-savvy folk know that the platform is far more than just an e-mail system, but "Lotus has just not been able to fix that [perception] problem," he says.

Forgotten, but not Gone
That's the bad news. The good news for Notes developers and customers is that while the hype has certainly dissipated, there is a bona fide market for Notes-based sales automation. Notes remains wildly popular, with over 30 million seats installed and a solid reputation. "In companies where IT departments still hold the major degree of sway over platforms, you see Lotus pretty strong," says Selland. "It is a pretty nice product from an administrator's standpoint."

Launched in 1989, Lotus Notes is, at its most basic level, a corporate e-mail system with solid remote user support. Over time the product has evolved into what Lotus calls "groupware" and a "collaborative platform." Put simply, Notes easily accommodates discussion groups, permission-based file sharing and can be used as a software engine for a variety of applications. The addition of the Lotus Domino application server in the mid-'90s boosted the scope of tasks business users could perform entirely within Notes.

And it's still a solid development platform. "The No. 1 complaint in the Windows world is that synchronization doesn't work," says Kelly Malaret, principal of Malaret Computer Technology, a Notes/SFA integration firm based in the Chicago area. "Well, Lotus wrote the book on replication for field users."

These strengths lead to the conclusion that despite a dearth of hype, Notes-based SFA development is generating good business, even if it won't warrant any public offerings any time soon. Case in point: More than one company contacted for this article claims to be the top-selling provider of Notes-based SFA products. Each had 1998 revenues under $10 million. Lotus acknowledges that their sales automation partners are not the IPO darlings that set the ticker tape alight, but points proudly to the steady growth of Notes partners such as GWI and Synergistics. The latter claims to have doubled their revenues on a year-by-year basis for three years straight.

Ironically, the overselling of Notes as an easy-to-use development platform suitable for sales automation may have hindered the emergence of truly giant Notes SFA software vendors. "Back when Notes was all the rage, people were looking at building applications internally," explains Robert DeMaio, CEO of Relavis Corporation, publishers of the OverQuota Notes-based SFA package. "They were building sales automation internally, or engaging consulting firms to build the applications for them."

Now that both the buyers and the sellers have matured, Relavis and their colleagues enjoy a growing business. "It doesn't make sense anymore to build an internal application-there is just too much [pre-built software] out there," he says.

"A lot of these Notes SFA vendors don't get in the door because `Why the hell would I want to build my sales automation strategy on my e-mail system?'"

Who's Using Notes?
By and large, companies that are choosing to build their sales automation solutions are already happy, productive Notes shops. "It's continued justification of the infrastructure investment. That's a pretty powerful justification," says Daren Nelson, founder and CEO of Vancouver, Washington-based GWI Software, publishers of the Collaborative Front Office suite for Notes. More than 80 percent of first-time GWI customers have had Notes installed for over a year.

Malaret concurs. "It's appealing to our customers. They already have Notes developers and admin people on staff," she says. "IS departments are not big fans of standalone applications. With Lotus Notes, they already have the structure and expertise in-house to implement and maintain software without using a consulting firm."

When Mike Wlotzko, Eastern Regional Director for Panasonic Personal Computer Corporation, sat down four years ago to make the SFA decision for his enterprise, custom development was out of the question-he went looking for long-term survivability. They considered a Notes-based package from Synergistics alongside two non-Notes vendors. The open architecture of Notes won out, because the system could be salvaged if the worst were to happen. "If the company we chose went belly-up, it would be conceivable that someone else could pick it up and move forward with it," he says.

It helped that Wlotzko was predisposed to Notes. "I came from a company that used Notes as a communication tool for e-mail, and it was my suggestion that we take a look at a Notes-based platform to automate our sales force and the [back end] of our organization," he says. Presently, 40 sales and sales management personnel use the system along with nearly 60 others in administration, production and marketing. Wlotzko is pleased with the customized opportunity tracking his organization has enjoyed. Because they are a "build-to-forecast" organization, "we have to know with very clear certainty what deals are in process."

Will he stick with Notes when the time comes to re-evaluate his company's CRM capabilities? "Realistically, we would entertain talking to people who may have a superior solution, but if we made a move, it wouldn't be because we were disappointed [with Notes], because we're not."

Notes in the Web
As the flood of new SFA software pushed Notes-based packages from the limelight, the sub-genre of Web-based SFA has emerged as the next hot topic. And Lotus is ready to steal that thunder back by enabling Web clients to speak directly with the Notes/Domino environment.

A software add-on dubbed Domino Run-Time Services, presently in beta testing, will allow users armed with nothing but a Web client to participate in Domino-based enterprise applications. Like other Web developers, Lotus is currently wrangling with the sticky problem of providing maximum performance to offline users, which has long been one of the selling points of Lotus Notes.

Notes developers are suitably excited by the possibilities. "You won't need a Notes client, which at times has been one of the barriers to growth," says Synergistics's Osborne. "You'll just need a browser. And at that point, you're competing with the big boys."

"A software add-on dubbed Domino Run-Time Services, presently in beta testing, will allow users armed with nothing but a Web client to participate in Domino-based enterprise applications."

Breaking the Relational Barrier
Companies have been edgy about using Notes for serious enterprise-wide data storage because of its non-relational nature. When it comes down to brass tacks, "Can Notes handle it? Yes. But how well?" asks Yankee Group's Selland. And when it comes to important data, many are simply unwilling to deal with uncertainty.

To address the long-standing complaints about the Notes database, Lotus has announced Domino Enterprise Connection Services, an add-on for application builders that allows Notes/Domino to speak with DB2, Oracle, Sybase and generic ODBC relational database servers, rather than the built-in Notes datastore. The software is expected to be available by the end of 1999.

And not a moment too soon. "If your sales process [involves] huge transactional processing, then the Notes environment has never been a useful platform for that," says DeMaio. Relavis plans to incorporate the Enterprise Connection Services to allow companies to connect to more robust data warehouses.

Lotus: the Weak Link?
So, Notes-based SFA is off to a good start, but not nearly as tremendous as originally advertised. How much of the blame should be delivered squarely at Lotus' doorstep?

Yankee Group's Selland says that Lotus is due a fair amount of criticism, largely due to their support of third-party developers. "I think it's gotten worse since IBM bought [Lotus]," explains Chris Selland, owing in part to IBM's on-again, off-again competitive presence in the CRM market.

"Lotus has been particularly poor at partner relationships. If you compare them to Microsoft, there's a vast difference," he explains. "Look at companies like Pivotal and Onyx. They couldn't have gotten where they are without Microsoft. Everything they do is based around Microsoft technology, and Microsoft holds them up as paragons."

GWI's Nelson has based his business around Lotus technology, but feels he has not reaped the benefits enjoyed by MS specialists. "Lotus doesn't understand that a vibrant [partner] community will generate a lot of revenue back to them," he says. He says that Lotus does not single out exceptional partners for special promotion as Microsoft does, instead preferring to give each company equal treatment. "I think Lotus is a good company, but they believe in a level playing field. Unfortunately, it doesn't exist anywhere else in the world."

Some partners have tried to make sense of Lotus' policies and live with them. "Lotus' business model is different than Microsoft's," says DeMaio. "I can't say that I wouldn't love Lotus to come in and say `here's a few million dollars,'...but I'm not expecting them to do that."

"I think Lotus has realized that the SFA market is not driving new seats for them, so they've de-emphasized it and they're going after the bigger fish," says Osborne. "The problem is not that the market is too small. We could spend the rest of our corporate life upgrading [our existing customer base.]"

Lotus counters that they're doing right by their partners through such developments as the Domino Run-Time Services and Enterprise Connection Services. "We've been very hard at work over the past few years to build our CRM strategy," says Bart Lautenbach, director of Web Applications Product Marketing at Lotus.

As for providing their partners with a viable market, Lautenbach says that the numbers speak for themselves. "We're in over 70 percent of the Fortune 100. Lotus and Domino are present in a phenomenal number of companies, so there's a pretty big target to shoot at," he says. He also highlights their new ERP partnership initiatives with vendors such as SSA, Lawson, Infinium and J.D. Edwards as a way to bring greater functionality to the overall Notes implementation world.

Despite the setbacks of the past few years, there's quite a lot to look forward to in the Notes SFA market. With Domino nearly ready to integrate with a variety of data warehouse and ERP back-ends, and revenue growth quite impressive for a number of the major players in the market, the market looks to be on the verge of a major growth spurt. But let's not get too excited just yet-after all, we jinxed it last time.

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