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

by Steve Hamm

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.