IBM's Social Networking Push

With collaboration software called Lotus Connections, Big Blue competes with Microsoft as Web 2.0 expands into the business world

In the earlier days of computing, innovations that were created for corporations gradually seeped into consumer products. But now, the traffic is going both ways—and moving quickly. The most significant example of this trend is the social networking phenomenon. Web sites like MySpace, YouTube, and Flickr have seen their popularity boom with quick and easy technologies for doing everything from creating blogs and forming communities to posting photos and videos on the Web. Now these technologies are starting to arrive in packages designed specifically for large companies. Ready or not, MySpace is coming to the enterprise.

A major advance came Jan. 22 with IBM's announcement of a new product called Lotus Connections. It wraps five social networking technologies up into one integrated package—similar to what Microsoft's Office does for traditional desktop productivity software such as Word and Excel. And, if IBM handles this right, its package could rapidly spread the use of so-called Web 2.0 applications in the business world. "While social computing software is perceived as being at the fringe of most large businesses, it's actually moving to the center fast—because it's about how the next generation of employees communicate, and create and share ideas," says Franks Gens, senior vice-president for research at tech market research IDC.

The IBM package includes five applications: profiles, where employees post information about their expertise and interests; communities, which are formed and managed by people with common interests; activities, which are used to manage group projects; bookmarks, where people share documents and Web sites with others; and blogs, where people post ongoing commentaries. "The business market is showing a lot of interest in using social networking tools to improve productivity. It's about helping people find experts and the information they need to get their jobs done," says Steve Mills, the general manager of the software group at IBM (IBM). The commercial version of the package is to be delivered in the second quarter.

Other Collaborative Products

Up until now, companies experimenting with social networking software picked among a wide variety of individual programs, most of which were created with the consumer—rather than the corporate user—in mind. "IBM's is the first and only suite that brings together all these capabilities in a single package," says analyst Mark Levitt of IDC. In addition, Lotus Connections offers security, access control, and review features that are important to corporations.

The Lotus Connections introduction is part of a renewed push by IBM in collaboration software. At IBM's annual Lotusphere user conference on Jan. 22, the company announced several products, including the public beta test version of its next update for its Notes e-mail and collaboration software, which will go on sale in the first half of the year; and a new package, called Lotus Quickr, which provides software connectors to link popular desktop applications including Microsoft Office to blogs, wikis, and other social networking programs.

The announcements come at a time when IBM's $18 billion software group is on a tear. Software revenues increased 14% to $5.6 billion in the fourth quarter, and revenues in the Lotus division, where IBM's collaboration software is produced, grew by more than 30%—powered in part by a new release of the company's Lotus Sametime instant-messaging package.

Rivals' Distinct Offerings

IBM is in fierce competition with Microsoft (MSFT) in the markets for communications and collaboration software, and the Lotus Connections offering could give it a leg up—at least temporarily. Last November, Microsoft introduced a new version of its collaboration software, Microsoft SharePoint Server 2007, which includes some basic social networking technologies, including blogs and wikis.

However, analysts say Lotus Connections offers richer functions than SharePoint and it's easier for workers to get going with the IBM product. "Ventura (the code name for Lotus Connections) is a more sophisticated social computing platform than what you get with Microsoft," says analyst Erica Driver of market researcher Forrester Research.

Unlike IBM, however, Microsoft added the social networking functions as features of its already-existing product rather than making it a separate package. "Having all of this stuff on the same infrastructure is very powerful," says Kirk Koenigsbauer, the general manager of SharePoint. For instance, the new release has a search function that allows users to find sharable content within any of SharePoint's programs, including its content management and business intelligence data. So, for corporate buyers, the choice will be between one large, multipurpose program and a slimmer, more focused one.

IBM has more than 20 corporations testing Lotus Connections, but, in fact, the software is already battle-tested. Most of the applications have been used inside IBM for months or years. For instance, with IBM's internal "blue pages" program, employees can search through the entire staff of more than 340,000 people for those with just the expertise they need to answer a question. The company decided just nine months ago to fold those technologies together and turn them into commercial products. "We were hearing so much marketplace buzz and so much was going on in Web 2.0, and it was clear we had an opportunity to build something for the enterprise," says Jeff Schick, vice-president, social computing for IBM's Lotus division.

Testers' Rave Reviews

During an IBM demonstration of Lotus Connections, it was clear that the product is easy to use and potentially powerful. Rather than relying on employees to load their work files into an old-fashioned knowledge management program, the new technology allows them to quickly attach electronic tags to important documents and interesting Web pages, and have them collected and updated behind the scenes by the software.

Some of the beta test customers are raving about it. The Film Foundation in Los Angeles has been using the activities application in Lotus Connections to help manage one of its major projects: The Story of Movies, an arts-appreciation program for high schools and middle schools. A widely scattered ad hoc team of about 60 researchers, writers, editors, designers, teachers, and movie creators are preparing educational materials to support teaching around The Day the Earth Stood Still, the 1951 sci-fi classic. Rather than using e-mail and sending paper documents around, they're using the IBM software to brainstorm, review each other's work, and get alerts when something new comes in to review.

The project is off to a smooth start, and Jennifer Ahn, managing director of the foundation, expects it to take about six months to complete—compared with 18 months for previous similar projects. "I'm sure we'll start doing more with IBM software, too," says Ahn. "The activities piece has been so successful for us, and I'd love to see what else the program can do."