On August 22, 2007, IBM announced the acquisition of WebDialogs , the Billerica MA web conferencing service provider. Although financial terms were not disclosed, the press release did disclose that WebDialogs had 500,000 users, which is comparable to Webex (according to Barron's estimate of $380 million of 2006 revenue divided by $70/month/user = 452,000). The revenue from WebDialogs (private) is probably about half the Webex level since WebDialogs uses a distribution intensive model, allowing rebranding and plugin sales. Webex had been a public company and had invested extensively in their direct-on-the-web-model with TV ads and extensive direct marketing campaigns and therefore created a valuable brand that many users call the product category.
This deal follows the Cisco WebEx deal and puts IBM and Lotus into the advanced collaboration hosted service market. Now it's Cisco Webex, Microsoft Live Meeting and IBM Lotus Sametime Unyte (the new Lotus name for the WebDialogs service).
Brockmann rating on this deal is as follows:
Strategic fit [5/5]. Web conferencing is a great complement to IBM Lotus Sametime product, and a great way to level the competitive playing field established by Microsoft Live Meeting and Cisco Webex.
Timing [4/5]. Now is the time for collaboration. This is the second most important driver to the adoption of Unified Communications and IBM is well positioned to exploit the unification of both the IM & Presence services and web conferencing functions. Furthermore, IBM is uniquely positioned to strengthen their success with VoIP partners' customers since IBM continues to insist that it is not developing a VoIP platform, which makes them more potent as a collaborator than LiveMeeting (Microsoft) or Webex (Cisco).
Customer demand [4/5]. The integration of the Sametime portfolio with these services reduces the barriers to collaboration. Users can escalate an IM stream into a click to a web conference. Switching costs between hosted services are quite low since most do not have or require lengthy contracts.
Potential [2/5]. Brockmann & Company estimates the synergy at less than $50 million/year. That'll come from selling more Unyte into Sametime clients. To do this IBM will double the number of users, mostly from their well-established Lotus Notes and Sametime customers.
Overall: 15/20 = 75%.
