Navy keeps its options open in deal with Lotus

Capitalizing on Lotus Development Corp.’s eagerness to make a big enterprise sale
in the government market, the Navy has signed a multiyear contract to deploy Lotus
groupware widely without an up-front commitment.

The Space and Naval Warfare Systems Command is conducting a 4,220-user pilot to
determine whether Lotus’ Domino Server 5.0 and Notes 5.0 client
products—including a Defense Message System client—work well and can foster a
good business relationship between Lotus and the Navy, said Rear Adm. John A. Gauss,
SPAWAR’s commander.

If SPAWAR does not exercise any first-year options by May 25, the buy will stop at
5,000 licenses, and the Navy will get a 25 percent discount on them, Gauss said.

The first option year calls for the Navy to install the software for 130,000 users. If
it chooses not to do so, the discount will rise to 48 percent, Gauss said. In the second
option year, the Navy would roll out the software to 300,000 users, and, in the third
option year, to 500,000, he said.

SPAWAR made the initial buy in September through the indefinite-delivery,
indefinite-quantity Navy Super-Minicomputer Contract held by Litton PRC Inc., SPAWAR
spokesman Richard Williamson said. The contract includes installation, support and
training, he said.

The Navy took advantage of Super-Mini’s technical refreshment provision, which
permits Litton PRC to add new products that are within the contract’s scope,
Williamson said.

Gauss declined to discuss any discounts in the last two years of the contract.

The Navy reportedly has in the past negotiated software discounts as high as 95
percent.

“We can take full advantage of [Lotus] technology while paying
incrementally,” Gauss said. “That’s a pretty good deal.” The license
has no immediate effect on the Navy’s standardization on Microsoft Exchange as its
DMS client, he said.

Jeff Papows, Lotus’ chairman and president, met with Gauss to discuss the site
license agreement, the SPAWAR commander said.

The Marine Corps, which already uses Lotus Notes and SmartSuite, is not a party to the
contract but could be included if it wants to be, Gauss said.

The Air Force Materiel Command, Defense Finance and Accounting Service and the IRS have
standardized on competing Microsoft Exchange Server products in recent months, but a few
organizations have tilted toward Lotus.

The Environmental Protection Agency has decided to standardize on Lotus Notes,
according to an Oct. 14 memorandum from Alvin M. Pesachowitz, the agency’s chief
information officer.

Pesachowitz wrote that standardizing on one product will improve “compatibility in
calendar and scheduling functions, delays and lost mail when messages cross different
systems, and higher support costs for multiple systems.”

The Army is buying at least 10,000 licenses of Lotus Domino and Notes for its Battle
Control System, said Col. Robert Raiford, the service’s DMS program manager at Fort
Monmouth, N.J.

“The driving reason was that Notes can run under SunSoft Solaris,” Raiford
said.

Army officials will install the software beginning in March and plan to field the
battle system in May 2000, he said.

SAN DIEGO—Results of the Space and Naval Warfare Systems Command’s test of
groupware products from Lotus Development Corp. could signal a challenge to Microsoft
Corp.’s domination among Navy users.

Microsoft Windows NT is entrenched as the Navy’s de facto standard operating
system for both networks and PCs. But when it comes to office software and e-mail
applications, the service’s solutions are still up for grabs, SPAWAR officials said.

A March 1997 message issued jointly by the service’s Pacific and Atlantic fleets
established interim software standards for the Navy’s Information Technology for the
21st Century initiative. The fleets selected all Microsoft products: Windows NT 4.0,
Exchange 5.0, Office 97 Professional, BackOffice and Outlook 97.

“Exchange is only messaging, not groupware, workflow or knowledge
management,” said Rear Adm. John Gauss, SPAWAR’s commander. “Outlook is a
limited form of groupware. BackOffice is where you get into some of the knowledge
management and workflow products that Microsoft offers.”

The SPAWAR pilot will demonstrate that an enterprise built around Microsoft products
can, at a minimum, communicate and interoperate with an enterprise built around Lotus
products such as Lotus Domino Server 5.0 and Notes 5.0, Gauss said.

Gauss also said the Navy might rethink its selection of Microsoft Exchange as the
service’s preferred user agent for the Defense Message System in favor of Lotus
Notes’ DMS client.

Besides performance, cost is the main driver behind the Lotus pilot, Gauss said.
“The difference in price is substantial,” Gauss said. “Because Microsoft
has dominated the operating system market, they negotiate from a position of strength, and
they’re very difficult to get exceptional deals from.”

SPAWAR’s Navy IT Umbrella Program earlier this year negotiated a blanket
purchasing agreement with ASAP Software Express Inc. of Buffalo Grove, Ill., for select
Microsoft products.

“If you go to that contract, it’s hard to break out and identify what the
groupware cost really is because it’s bundled with so many other things,” Gauss
said. “It’s a SPAWAR contract that was under negotiation long before I got here,
and when I got a brief on it I didn’t like it.”

—Gregory Slabodkin