IBM takes on Google in business Web-mail market

Employees follows a speech at the booth of IBM at CeBIT computer fair in Hanover March 3, 2009. REUTERS/Hannibal Hanschke

BOSTON (Reuters) - IBM is introducing an inexpensive Web-based corporate email service that will compete with Google Inc’s Google Apps, which has recently suffered several high-profile outages.

International Business Machines Corp will likely try to capitalize on the damage that those outages have caused to Google Apps over the past year. Last month millions of business users could not access email for almost two hours.

An IBM spokesman said on Thursday that the company will start selling its LotusLive iNotes next week. The lightweight email service will cost $36 per user per year, about 25 percent less than what Google charges for a more robust product.

IBM’s offering does not have as many bells and whistles as Google’s, but the technology giant could attract more customers because it has decades more experience serving the business market. Its products include Lotus Notes, one of the world’s two most widely used email programs.

Google, on the other hand, generates the bulk of its revenue from advertisements placed on free search products targeted at consumers. It is just getting into the business of selling to businesses.

“The IBM brand will help a lot,” said Forrester Research Inc analyst Liz Herbert.

iNotes will also compete with a Web-based email service from Microsoft Corp that costs about $120 per user per year, according to the software maker’s website.

Reporting by Jim Finkle; Editing by Richard Chang