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You've Got Cloud-Mail From IBM

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There are many ways to milk a cloud. IBM (NYSE: IBM  ) is launching a cloud-based email service that could end up stealing sales from both Microsoft (Nasdaq: MSFT  ) and Google (Nasdaq: GOOG  ) .

The IBM LotusLive iNotes service is a cloud computing email platform that's aimed squarely at corporate customers. For a $3 monthly fee per license, you can get a secure email application that's hosted by IBM and available from anywhere. For starters, IBM will provide the cloud hosting, but there may be an installable version later on; many IT directors simply prefer to host their own private clouds with full control over the environment. "It's fair to say we're pretty trusted," says Sean Poulley, IBM's vice president of cloud services.

iNotes takes systems management out of the equation and presents a simple, direct way to get and send mail from anywhere, including from smartphones like Research In Motion's (Nasdaq: RIMM  ) BlackBerry or Apple's (Nasdaq: AAPL  ) iPhone. And there are early signs that mobile mailing might be what IBM really is shooting for here.

IBM holds up Nokia (NYSE: NOK  ) as an early customer and partner. Today, 1.5 million Nokia phones come equipped with the IBM LotusLive messaging software, so it's an easy next step to sign up for an iNotes email address right from the phone without ever touching a computer. That sounds a bit like IBM will market this service directly to consumers on the street, but the real money is in the corporate market.

The obvious target market is businesses that use Google's Gmail and Apps services now. Google's platform costs $50 a year per user and IBM's solution comes out to $36 a year. Granted, Google Apps accounts also come with other bells and whistles like online word processing, and Google's 25 GB of storage is much roomier than IBM's 1 GB. But many small and medium businesses may prefer the no-frills approach, especially in these times of tight IT budgets.

This is also a direct attack on Microsoft's huge installed base of Exchange email servers. At $36 a year, iNotes comes a whole lot cheaper than a Microsoft platform that costs thousands to install and maintain. The same is true of Microsoft's Exchange Hosted Services, which provides a similar cloudy experience starting at $4.50/month per user, but includes additional layers of fees.

iNotes alone will hardly move IBM's big, blue needle very far, but the company is showing real commitment to the idea of cloud computing. IBM will challenge cloud-computing powerhouses like Google, Amazon.com (Nasdaq: AMZN  ) , and Microsoft for years to come.

I'm using Gmail every day. Which Web mail platform would you trust with your business mail? Discuss in the comments below.

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Google is a Motley Fool Rule Breakers selection. Apple and Amazon.com are Motley Fool Stock Advisor picks. Microsoft and Nokia are Motley Fool Inside Value recommendations. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 05, 2009, at 12:57 PM, riffraffer wrote:

    "DDoS attack rains down on Amazon cloud"

    "According to a blog post from Jesper Nøhr, the Danish developer who runs Bitbucket.org, the site's Amazon-hosted network storage became "virtually unavailable" beginning Friday evening, and the outage persisted well into Saturday before Amazon pinpointed the problem.

    Nøhr says Amazon advised him not to divulge the cause of the outage. But he divulged anyway. "We were attacked. Bigtime. We had a massive flood of UDP [User Datagram Protocol] packets coming in to our IP, basically eating away all bandwidth to the box," he wrote. "So, basically a massive-scale DDOS. That’s nice."

    http://www.theregister.co.uk/2009/10/05/amazon_bitbucket_out...

  • Report this Comment On October 05, 2009, at 5:20 PM, InfoThatHelp wrote:

    iNotes is IBM's direct capture of Rim BES business. Given IBM's reputation, undisputed reputation in enterprise operations outsourcing experiences and successes at best in class service levels and economies, it is not a question of who will migrate their BES to the IBM iNotes, but when will they all migrate from Rim to IBM.

  • Report this Comment On October 05, 2009, at 6:17 PM, johnkjl wrote:

    IBM is the only firm that has to walk the fine line of continuing to sell big box hardware, enterprise class software applications and professional services while migrating to a "cloud" model. GOOG, AMZN and MSFT offer cloud services as an outgrowth of their existing business models not as a potential cannibalism of existing revenue flows.

  • Report this Comment On October 07, 2009, at 6:17 PM, atxlonghorn wrote:

    IBM has been running outsourced datacenters before GOOG and AMZN or MSFT even existed. Expanding into the SaaS market is a clear extension of both the software and hosting capabilities of IBM.

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