IBM Competes with Google, Offers Discount E-mail Service

IBM (News - Alert) will stop at nothing to be the best of the best in the Web world. And, with companies like major Web mogul Google Inc., vying to breaking into the business software market, IBM’s newest email service offer gives Google (News - Alert) some stiff competition. 

In efforts to compete with Google, IBM is offering a bare-bones email service called LotusLive iNotes for $36 per worker annually, compared to a more comprehensive software package that Google offers for a slightly higher cost at $50 per worker annually. 

"Candidly, Google has shown itself to be weak" in some areas of e-mail, Sean Poulley, an IBM executive overseeing the company's e-mail service, said. "There is a world of difference between supporting a consumer-grade service and a business-grade service."

Dave Girouard, who oversees Google's e-mail and other services tailored for companies, responded that Google will learn the ins and outs of selling software to businesses more quickly than IBM will adapt to cloud computing and Google isn't planning to lower its prices.

So, why pay more for Google? 

For starters, the company is offering 25 times for storage of 25 gigabytes per account compared to IBM’s 1 gigabyte per mailbox. 

And, with Google’s package, it’s not just email.

Users also receive word processing, spreadsheet and presentation applications, as well as a video channel. Seems worth the extra $14 compared to IBM’s email service.

However, according to IBM officials, its LotusLive iNotes will beat Google because it has a much larger sales force and relationships with corporate customers. It seems some may agree with IBM. "This is trouble for Google," Matthew Cain, Gartner (News - Alert) Inc. analyst, said.

The IBM service offer is a direct response to the increasing corporate demand for inexpensive e-mail that's run on computers owned by an external supplier instead of the company relying on the service. 

Other e-mail providers also are making inroads with similar discount services, so much so that Gartner predicts about 20 percent of U.S. companies will run at least some of their e-mail through Web browsers by 2012.