About IBM, Web 2.0 and Microsoft. Part II

In the Carestream example, radiologists don't know their instant messaging and voice capabilities are Sametime; they just see new functionality in a familiar application.

It's a message that IBM will build on, Davis said. He said the company needs to accelerate the discussion away from the "product-centric fire-hose flow of information" and direct it to "looking at customer goals and showing [Lotus] can address them with integrated products."

Showing the breadth of its tools and integration across its software is key if Lotus wants to stand out from the pack.

The setup has begun and Lotus Connections is a prime example.

"The social software is where they can claim they are first with an enterprise comprehensive solution, and that is why they are pounding at it, " said Mark Levitt, an analyst at Framingham, Mass.-based market research company IDC. "You are seeing a lot more integration with things like Quickr, Sametime, Symphony."

Experts said the integration story is being driven in part by Microsoft's success with Sharepoint Server 2007, which is one of the foundation elements of Microsoft's collaboration and real-time communications strategy, as well as an entry point into social networking tools such as blogs and wikis.

"SharePoint Server 2007 is sweeping through the industry like no other software product that I've seen since the early heydays of Lotus Notes," wrote Burton Group Inc. analyst Mike Gotta.

"IBM is taking it on the chin right now."

He said that IBM should use its arguably superior social networking tools to switch the focus away from Sharepoint.

"IBM can use Connections to compete with Microsoft by changing the focus to social computing rather than collaboration and content," Gotta said. "IBM has to do superior and native integration between Connections and Microsoft productivity tools and integrate with SharePoint as well."

Later this year, Lotus will add replication to Connections, a feature that was always described as the crown jewel of Notes.

But Lotus's challenges are a multiheaded monster.

The introduction at Lotusphere of Foundations, appliances bundled with software to support small and midsize business, and Bluehouse, a set of services available over the Internet, shows that Lotus is playing catch-up to Microsoft and its strategy of software plus services, which includes Microsoft Small Business Server coupled with Windows Live services.

Also, the company has to find a way to make Sametime stand out. This year, it will release two new versions, including a telephony version slated to ship in the second half of 2008. However, both have a list of features and functionalities comparable to those of the other players including Cisco and Microsoft, which are quickly rising to the top of the unified communications discussion. In addition, some new partnerships with Cisco and Nortel Networks Corp. unveiled at Lotusphere are identical to those Microsoft has made.

"This has become a very competitive space," IDC's Levitt said. "And IBM is looking for places where it can claim leads."