In a year of tremendous growth for both, Lotus Notes outshipped Microsoft Exchange Server by 3 million seats in the fourth quarter of 1999, according to industry-standard Messaging Online. This surge in shipments puts Notes about 1.8 million seats ahead of Exchange for 1999. However, Lotus' most recent major release of Notes—R5—in 1999 might have skewed the numbers; Microsoft's release of the next major version of Exchange—Exchange 2000 Server—won't come until the middle of 2000. Notes and Exchange are the two leading messaging platforms for enterprise customers. The Messaging Online Year-end 1999 Mailbox Report explained, "In terms of installed base, Notes stands at 55.3 million seats, and Exchange is at 44.2 million seats. In terms of 1999 sales, Notes had a net increase of 21.8 million seats in 1999, and Exchange grew by just under 20 million seats. During the fourth quarter, Notes grew by 8.5 million seats while Exchange grew by 5.5 million seats." Many consider Messaging Online's numbers, assembled through direct contact with vendors, to be the most accurate in the industry for the messaging market. Ed Brill, senior manager of Domino product marketing at Lotus, said these numbers "demonstrate that Notes has continued its momentum as the leading messaging infrastructure. At the end of 1998, Microsoft issued a press release saying that Microsoft had outshipped Lotus Notes, that Microsoft had beaten Lotus, and that it was all downhill from there." Plainly, said Brill, Lotus proved Microsoft wrong. When asked why he thought Notes was beating Exchange, Brill identified three keys: "One, scalability and reliability. Two, Notes is more about collaboration and adding value to the infrastructure, while Exchange is still just a pretty good email system. Three is our community of support." Brill has also been quoted as saying that Lotus sales have picked up considerably since the announcement of Lotus iNotes. This product lets you use Microsoft Outlook on the front-end of a Lotus platform and provides extensive mobile and Web-based access to the Lotus messaging infrastructure. Stan Sorensen, Exchange group product manager at Microsoft, responded by saying, "Strong quarters from each of us prove what we've been saying all along—this is clearly a two-horse race between Exchange and Domino. Domino won this leg, but there's a lot of race left to run." Before the fourth quarter of 1999, Microsoft had beaten Lotus for six quarters running. Lotus won in 1999 due to its fourth quarter sales, which were more than twice as high as its sales from either the first or second quarter.
