IBM introduced iNotes hosted email solution yesterday.  IBM didn’t mix their words about iNotes being a direct competitor with Google Apps and believes that they can do enterprise email better than Google.  The iNotes hosted solution provides email and calendar with 1GB storage per user.  IBM also is attempting to compete with Google on price, giving enterprises the service for $36/user per year.  Which is about $14 cheaper than Google’s offering.

While on the surface iNotes looks like real competition for Google Apps, the two hosted solutions are quite different.  iNotes provides email and calendaring only, Google Apps provides email (with 25GB of storage vs 1Gb), calendaring, intranet, Docs, and hosted security.  Also IBM is positioning iNotes to be a supplement to on premise email solutions which means organizations would be expected to keep on site hardware, software, and the technical support staff required to keep it up.  This all means that organizations will not see a cost savings but would actually have a cost increase because they would be piling additionally service fees on top of pre-existing legacy costs.  In contrast to this Google has positioned Google Apps to be a replacement for your legacy emal and collaboration solution, giving you real cost savings right away.

While the move does bring competition into the hosted email and collaboration market it also shows that such solutions are in demand by organizations of all sizes.  By introducing iNotes IBM is admitting that Google is providing a service that offers a real value to its customers.