IBM has launched LotusLive iNotes, an on-demand e-mail, calendaring and contact management system meant to compete with the likes of Gmail and Microsoft Exchange.

Pricing starts at US$3 per user per month, undercutting Google Apps Premier Edition, which costs $50 per user per year.

IBM is aiming the software at large enterprises that want to migrate an on-premise e-mail system to SaaS (software as a service), particularly for users who aren't tied to a desk, such as retail workers. It is also hoping to win business from smaller companies interested in on-demand software but with concerns about security and service outages, such as those suffered by Gmail in recent months.

LotusLive iNotes is based on technology IBM purchased from the Hong Kong company Outblaze.

"What we brought to Outblaze and to the marketplace is what you'd expect from IBM in terms of security, reliability and privacy," said Sean Poulley, vice president of online collaboration.

While alluding to the Google service outages, Poulley acknowledged that no company can guarantee 100 percent uptime for on-demand applications. But IBM has a long-standing track record of running "the world's mission-critical systems," he said.

IBM will also have an opportunity to win customers from Microsoft who aren't ready to migrate to the upcoming Exchange 2010 release, given the headaches and investments involved, Poulley said.

Far from concerned, Google is "actually pretty excited about this," said spokesman Andrew Kovacs. "When a company with as rich a history as IBM makes a statement that they need to have a cloud-computing solution for businesses, it's a validation of the cloud."

That said, the Google offering is more full-fledged, according to Kovacs. " Apps goes far beyond e-mail, and on the messaging side alone, we believe there's a pretty substantial difference."

IBM also has a lot to prove in terms of the reliability of LotusLive iNotes, Kovacs said.

"I've seen a claim of reliability and people are supposed to take IBM's word for it at this point," he said. "I haven't seen any statistics on Outblaze's [historical] uptime." Gmail has been more than 99.9 per cent reliable overall, he added.

Overall, the main point of interest in the IBM announcement is price, said Gartner analyst Matt Cain.

"Outblaze always sold low-cost mailboxes and that's what this is," he said. "Google's long been in it, Microsoft's long been in it. Now IBM's in it."

However, that's not to say IBM's brand on the software isn't of some value, Cain added. "From an enterprise perspective, you'd rather buy e-mail from IBM than a company called Outblaze."

It's unlikely that IBM's pricing strategy will cause competitors to lower fees for their offerings, according to Cain. For one thing, Microsoft already has a $2 per month Exchange Online option called "Deskless Worker," Cain noted.