IBM Aims To Undercut Gmail

Big Blue's new $3 a month enterprise e-mail service could steal market share from Google.

IBM's brand may not stand up to Google's in terms of inspiring excitement. But when it comes to the reliability and security of a service like e-mail, Big Blue is hoping to sell the good kind of boring.

IBM ( IBM - news - people ) on Monday is expected to release its first Web-based e-mail offering, an enterprise-focused addition to Lotus Notes it calls iNotes. The service will let users pick their domain name and will debut at $3 per month, a price aimed directly at undercutting Google's ( GOOG - news - people ) $50 per year and the $10 to $12 per month that Microsoft ( MSFT - news - people ) charges for its Webmail services. Though Microsoft offers one version of Webmail for $2 a month, IBM says it will offer 1 gigabyte of storage, twice the amount of Webmail.
IBM's e-mail gambit stems from its acquisition of the messaging assets of Outblaze; the deal closed in April and IBM will inherit 18 million customers.

But the service's timing may be based on more than the mere integration of IBM's Outblaze buyout: Google has spent the year trying to recoup from repeated outages of Gmail, including its own enterprise email service--the online applications have been unavailable for multi-hour windows three times so far this year.

IBM is hoping to tap into its reputation as a trusted outsourcer to show that it can do better. "We run the world's most mission critical systems for banks, telcos and utilities," says Sean Poulley, IBM's vice president of online collaboration services. "It's fair to say we're pretty trusted."

Dave Girouard, president of Google's enterprise division, defends Gmail, saying that it still offers 99.9% reliability--far greater than the average e-mail service many companies run themselves. As for competition with Google, he points out that IBM's 1 gigabyte of storage space is far inferior to the 25 gigs that Google offers.