IBM Breathes Life Into Lotus

Collaboration software partnerships open up the user base.
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SAN FRANCISCO -- IBM's (IBM) - Get Report pumped-up collaboration software is reviving Lotus' fortunes.

Several new client contracts announced Tuesday effectively add millions of users to IBM's Lotus Sametime collaboration product. Among others,





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are adopting the software, while


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Nortel Networks


became distributors of Sametime through their own products, according to IBM.

The Armonk, N.Y. company competes with


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in the

developing market for collaboration software, which simplifies company communications. Microsoft disclosed 300,000 users and $1 billion in revenue from its unified communications platform as of October. Much collaboration software is initiated with a mouse click or "drag and drop" features.

HSBC, which is signing up 300,000 users, is the collaboration product's biggest client win, according to spokesman Mike Azzi. And Colgate has nearly as many users.

IBM did not disclose terms of the contracts. But its Lotus collaboration software retails at $70 per user, making the two client deals worth upward of $35 million in ballpark terms, although some discounting may be assumed. The fees are one-time licenses. IBM earns ongoing revenue from support contracts that provide upgrades as the software matures.

Yet Big Blue's deals with original equipment manufacturers Cisco and Nortel spell even wider adoption. Cisco will resell Lotus Sametime as part of its Unified Communications products through its 1,200 partners worldwide.

And Nortel will integrate Sametime into its Multimedia Communications Server and its middleware base.

Like most collaboration software, Lotus Sametime allows business users to see their colleagues' availability and then provides the means to connect to them via messaging, Web conferencing and voice. IBM added the more advanced collaboration functions to its Sametime messaging software in the second half of 2007.

Shares of IBM were down 1.5% to $101.83 in recent trading.