Lotus position: IBM kills the name, but software and founders live on
- 04 February, 2013 20:06
Thirty-one years ago, Massachusetts-based software developers Mitch Kapor and Jonathan Sachs created a program an electronic spreadsheet that would change the world. A year later, on Jan. 26, 1983, Lotus Development Corp. released Lotus 1-2-3 for the IBM PC and grossed $53 million in sales. The following year, sales tripled to more than $150 million.
Many other Lotus products have come and gone through the years including Symphony, SmartSuite, and Lotus Works. But the greatest and most successful product was Lotus Notes (aka Domino/Notes), a new type of software program labeled "groupware," which was designed for several computer users to collaborate on projects from long-distance locations via a network.
Notes was founded and developed in 1984 by Ray Ozzie, Tim Halvorsen, and Len Kawell, with Steven Beckhardt soon to follow. The product did not launch until five years later. Sheldon Laube, the CIO of Price Waterhouse, contracted for 10,000 copies of Lotus Notes the day before it launched, which contributed significantly to the product's acceptance and initial success. The CIA also ordered 10,000 units for its agents and staff.
THEN AND NOW: Watch a slideshow of Lotus' main players
IBM bought Lotus in 1995 and kept the Notes product line alive. IBM announced in December that the newest release of Notes/Domino would drop the Lotus name. And the annual Lotusphere conference was conducted last week under the name Connect 2013.
So, we decided to go back and talk to the original Lotus braintrust and see what they're up to these days.
Mitchell D. Kapor was 32 years old in April 1982, when he founded Lotus 1-2-3. He had previously developed two business programs for VisiCorp: VisiTrend (a statistics program) and VisiPlot (a program that generated business charts). He made $500,000 on the spreadsheet version, VisiCalc, before VisiCorp bought him out for $1.7 million. But Kapor wanted more he wanted a spreadsheet that would translate digits into graphs and calculate numbers at lightning speed, so he partnered with Jonathan Sachs to develop Lotus 1-2-3.
Kapor raised $5 million (from investors) and, in January 1983, Lotus 1-2-3 became the number one software program on the planet, selling close to 110,000 copies in nine months at $495 per unit. By December 1983, Lotus was the second largest software company in the world (behind Microsoft) with sales of $53 million (which tripled) and a staff of 250 (which doubled) by 1984.
Today, Kapor has several projects in progress: www.kaporcapital.com, www.LPFI.org , and www.mkf.org, in addition to his main website at www.kapor.com. He's a partner at Kapor Capital, "an investment fund based in Oakland, CA that invests in seed stage information technology companies that aspire to generate economic value and positive social impact," including; for example, education, health, and consumer finance.
He's a board member at Level Playing Field Institute, a company that promotes innovative approaches to fairness in higher education and workplaces by removing barriers to full participation. "LPFI's Initiative for Diversity in Education and Leadership (IDEAL) assists exemplary underrepresented students at UC Berkeley to maximize their educational, service, and career opportunities," says Kapor.
According to Kapor, the Summer Math and Science Honors Academy (SMASH) is a three-year, summer math and science academy for high school students on the UC Berkeley campus that encourages students from under-represented communities to pursue studies and excel in science, technology, engineering, and/or math at top colleges and graduate schools.
In addition, he's the founder and trustee of the Mitchell Kapor Foundation, an organization that works to ensure fairness and equity, particularly for low-income communities of color. "We support organizations and activism that illuminate and mitigate the conditions and dynamics of inequality, which particularly impact vulnerable communities," says Kapor.
Asked about the demise of the Notes name, Kapor says, "I think 30 years was a really excellent run, and all things must pass.''
Jonathan Sachs was the co-creator of Lotus 1-2-3. He spent 10 months writing the program in Assembly for the IBM personal computer. He did such an excellent job, the program was almost completely bug-free. It was lightning fast and extremely efficient. Lotus introduced the onscreen, hierarchical, letter menus (accessed by typing the slash key prior to executing the commands), for example: keystrokes slash key, letter F, letter S means File Save. This user access design is still used in most Windows applications. Later versions of 1-2-3 were written in C, partially to accommodate the programs' growth and complexity and partially to make it easier for integration with other programs.
Sachs left Lotus in 1985. Currently, he owns a photo editing software program called Digital Light & Color. Based in Cambridge, Mass., Digital Light & Color's portfolio includes the advanced photo editing program Picture Window Pro 6.0; a color calibration tool called Profile Mechanic-Scanner; a plug-in program called Color Mechanic; and a post-production (frame and mat design) program called Frame Explorer.
"I am mostly retired now," he says, "But have been involved with Digital Light & Color since around 1993, a company that produces photo editing software for Windows."
Ray Ozzie founded Iris Associates in December of 1984 to create Notes. Iris and Lotus had an agreement from 1984 until Lotus acquired Iris in 1994. Iris was responsible for all product development, and Lotus was responsible for everything else (marketing, sales, distribution, support, etc).
[RELATED: Ray Ozzie seeks encore to Lotus Notes]
According to Ozzie, the Lotus brand was, initially, all about desktop computing; it was about tools for personal empowerment and personal computing. With the advent of Notes, the Lotus brand grew to be inclusive of tools for interpersonal empowerment and collaborative work things that today are regarded as "tools for social productivity."
"The post-PC world of today makes the 'desktop' attributes of the original Lotus brand far less relevant to today's offerings and, in that respect, it may have been a hindrance to IBM. Furthermore, IBM has itself evolved and expanded over the years from being a 'tools and technologies' company to being a 'solutions' company. And, over that period-driven, in large part, by the internet-social technologies have been woven into most every solution that they build," says Ozzie.
Today, Ozzie is the founder and CEO of an organization that concentrates on a new class of mobile-centric software and services. "Currently, I am focused on a new startup called Talko that's working on a new spin of my original passion using technology to facilitate human interaction but in a form that's designed for today's post-PC world of mobile devices and the web," says Ozzie.
He was at Microsoft from 2005 to 2010. He became the chief software architect in June 2006 responsible for the company's overall technical strategy and product architecture when Bill Gates retired to work at his foundation.
From 1997 to 2005, Ozzie founded Groove Networks "to create personally-empowering, secure, mobile, ad hoc, decentralized collaboration software for both individuals and enterprises." His co-founders were Ken Moore, Jack Ozzie, and Eric Patey. Microsoft purchased Groove Networks in April of 2005.
On IBM's decision to kill the Lotus name, Ozzie explains that to keep customers from being confused, IBM really only had two choices: to grow the use of Lotus as a "social ingredient brand" in all its relevant solution offerings, regardless of its technical heritage or to eliminate it and say "IBM itself means social."
"Either one of those conclusions would make sense, so the determination to retire the Lotus brand was likely a good one. It had a good run. I'm not surprised and it was a wise business decision," says Ozzie.
Iris Associates co-founder Tim Halvorsen recalls, "We were all friends from our college days, having all worked on the development team of a computer system at the University of Illinois called PLATO, a computer-based learning system. The PLATO system had a number of features that allowed people to interact; e.g., electronic mail, real-time chatting, and group discussions."
According to Halvorsen, the trio decided to use their experience to create ways for the new personal computers to easily communicate, which would then allow the users to easily and effectively communicate and collaborate with each other.
"We started out immediately designing and writing the first version of Lotus Notes to provide these features," says Halvorsen. "Ray and I worked on the low-level coding framework, as well as developing the Notes database (aka "NSF") implementation and the word processing component (the part that I am using right now to write this email). I also acted as the overall development Project Leader coordinating the work lists and tracking development schedules, plus coordinated the work of creating intermediate beta versions of the code for testing."
"Over the next 17 years, I continued to work on many other aspects of the code, my primary job title being chief technology officer, and also continued to coordinate development schedules and plan various releases of the product. Iris merged with Lotus in 1994 and Lotus merged with IBM in 1995. I finally retired from Iris in March 2002," Halvorsen says.
Since his retirement, Halvorsen has been involved at the board level with various startups and worked as a part-time software consultant. In 2003, he invested in a company that purchased the Fantastic Sam's hair-care salon franchise out of bankruptcy, then joined the company for several years as its chief technology officer.
"I have recently joined a new startup called "Clear Ballot Group" as CTO and the primary designer," says Halvorsen. "This company's product performs a fully-independent audit of 100% of the ballots cast in an election, and provides a visual system to allow anyone to verify its accuracy. It is the only system of its kind (that I know of) that can perform these functions."
Len Kawell was the third co-founder, co-designer, co-developer of the Lotus Notes project, and vice president of Iris Associates, Inc. in Westford, Mass., from 1985 to 1998. He was responsible for the ongoing development of the Lotus Notes Mail client and the server software. In addition, he developed and co-designed the Internet and TCP/IP-based protocols for the integration of the Notes and Domino products.
"I was primarily responsible for creating the Notes user interface, mail, and security features," says Kawell. "And later, I led the teams that continued the development of the entire Notes client. I also engineered and managed the transition of the Notes client to supporting Internet and Web features in the early 90s. For 13 years, I co-managed and grew the development team from our original team of three people to over 300 developers."
According to Kawell, he has co-founded many, successful startup companies such as Iris Associates, Glassbook and Pepper Computer. He's also founded or has been involved with various corporate entrepreneurial teams such as Microsoft's Mobile Labs, Alchemy Ventures, and Digital Equipment's DECwest.
"I specialize in creating total user experiences that combine software, hardware, networking, collaboration, and digital media," says Kawell.
Steve Beckhardt worked on Notes/Domino for 15 years, from 1985 to 2000. He joined Iris Associates about three months after the company started. "I designed the original Notes Server (before it was renamed Domino)," says Beckhardt, "But I'm probably best known for designing the Notes replication system. I also worked on many other areas including encryption, networking, full text search, etc. After Ray Ozzie left in 1998, I took over as president of Iris Associates until I left to join IBM Life Sciences in 2000."
"I have worked on a number of very different products since leaving the Notes team," says Beckhardt. "I worked two years for the Life Sciences group at IBM where I became an IBM Distinguished Engineer. Then I worked at several different startups, two of them working with RFID technology. Currently, I work in the software development team at Sonos, Inc. Sonos develops a highly-acclaimed wireless HiFi system and it's great fun working in consumer electronics on a product that all my friends and family can enjoy."
Before Sonos, Beckhardt was the executive director of systems architecture at Tego, an architectural design and software development company for a high memory radio-frequency identification chip (RFID) and related applications for storing maintenance information on high value flyable parts for the aviation industry.
From 2004 to 2007, he was the president of Red Brook Harbor Consulting, a software design and development company working in the areas of embedded and distributed systems. In 2003 and 2004, he was the vice president of software development at ThingMagic, LLC., in Cambridge, Mass., a company that develops RFID reader software and intelligent sensor systems. And from 2001 to 2003, he was a distinguished engineer at IBM Life Sciences and helped promote high-end IBM hardware and software to the pharmaceutical and life sciences industries.
Sheldon Laube was not a Lotus Notes founder, developer, creator, or designer, but Ray Ozzie and Larry Moore both credit Laube and Price Waterhouse for Lotus Notes initial acceptance and success. Laube was Price Waterhouse's first CIO, responsible for improving client services through technology. He was the driving force behind standardizing desktop productivity applications on a global basis and solely responsible for the largest software acquisition ever made (at that time). The program was Lotus Notes and Price Waterhouse purchased 10,000 units the day before the official product release. Then, later, Bill Eisner ordered 10,000 copies for the CIA.
Until recently, Laube was the Chief Innovation Officer for the U.S. firm PricewaterhouseCoopers (PwC). His team was responsible for inspiring new ideas, reducing barriers that could block the implementation of these ideas, and accelerating these innovations. He continues this work now as a consultant for various large enterprises across the globe.
He left Price Waterhouse in 1995 to become the executive vice president and CTO of Novell where he was responsible for the technological direction of 4,000 plus professionals. In addition, he developed the firm's strategic vision and became the overseer of Novell's R&D labs.
Many Lotus players (including Kapor, Ozzie, Moore, and Halvorsen) have commented, in published interviews, that "from an overall Lotus growth perspective, especially as a public company, the most notable leader was Jim Manzi.'' Manzi was president of Lotus from October 1984 to 1995, and CEO from April 1986 until IBM's hostile takeover in 1995. During Manzi's tenure, Lotus 1-2-3 sold 750,000 copies in 1986 (three times its nearest competitor, Microsoft's Multiplan). At one point, Lotus sales represented 17.6% of all software sales in the business world.
"I think my record as CEO at Lotus is well documented already as is my role in leading the company from a desktop software business which faced extreme competitive challenges to a new network-based business at the time that computer networks were just becoming important," says Manzi.
Since 1995, Manzi has had many ventures in the works and been involved (including creation, development, and financing) with many new technology companies. For example; he's been the chairman of StoneGate Capital Group, LLC since 1995; invested in and became chairman of a web and voice conferencing company called Interwise; was appointed to board of directors of Thermo Electron Corporation (2000); then became chairman of the board at Thermo Electron in December 2003. In 2006, Thermo Electron acquired Fisher Scientific and Manzi was chairman of the combined Thermo Fisher Scientific company, a life sciences industry worth $12 billion. He was also named chairman at the following companies: Freshdirect (2011) in New York City; Skyword, Inc., in Boston; and RayV.
In addition, he has served as a consultant, director, or board member for the following companies: Partners Healthcare; Flooz.com; McKinsey & Company; Gather; SOMA Networks; Continental Grain Company; Brigham and Women's Hospital in Boston; plus he is as an active member of the Council on Foreign Relations; a member of the Advisory Committee of Business Breakthrough; and Trustee Emeritus of Colgate University.
"As for IBM dropping Lotus as a brand, this is not something I am going to lose sleep about," says Manzi.
Louis V. Gerstner is another leader in the Lotus/IBM story who has garnered much notoriety and respect from his colleagues for his place and contribution to the success of Lotus Notes. Gerstner was chairman and CEO of IBM from April 1993 until February 2002. He is credited for restoring IBM to its former glory. He laid off thousands, restructured management, reorganized the company's infrastructure, modernized the products (hardware and software), while simultaneously revamping the company's mainframe division. As a result of his efforts, Gertsner grew Lotus products from 2 million users to over 22 million users and re-established Big Blue as a corporate giant.
Before IBM, Gerstner was chairman and CEO of RJR Nabisco (four years). Prior to Nabisco, he spent 11 years at American Express as president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Services Company. During Gerstner's time, American Express membership increased from 8.6 million to 30.7 million.
In 1994, Lou Gerstner co-authored a book titled "Reinventing Education: Entrepreneurship in America's Public Schools " in line with his "Reinventing Education" program, a partnership with 21 states and school districts. The program uses IBM technology and provides technical assistance to students and faculty throughout these districts to aid and maintain student performance in these areas .
In 2001, Queen Elizabeth II awarded Gerstner the rank and title of Knight Commander of the British Empire (KBE) for his services to education in the United Kingdom and his contributions to the Internet.
Gerstner was named chairman of The Carlyle Group, in Washington, DC. (a private equity firm) in January 2003 and, in 2008, he received the Legend in Leadership Award from the Yale School of Management. In addition, Gertsner has served as a board of director for many companies such as America-China Forum, American Express Company, AT&T, Bristol-Myers Squibb Co., The Broad Center, The Business Council, Caterpillar Inc., Council on Foreign Relations, Daimler Chrysler, Jewel Companies, Melville Corporation, Memorial Sloan-Kettering Cancer Center, The New York Times Company, RJR Nabisco Holdings Co., and Sony Corporation.
On May 9, 2013, (during its fourth annual Simon New York City Conference) the Simon School will present the Executive of the Year Award to Lou Gerstner for his landmark contributions in the field of information technologies.
Larry Moore was another key executive in the Lotus line-up. He was vice president and general manager of the Communications Products Division/Lotus Notes from 1988-1992 and the motivating force behind the release of Lotus Notes, which has generated over $7 billion in sales; that is, about $450 million a year. His colleagues credit his management and marketing expertise for much of Notes initial success. One of his strategies included the creation of the Lotus Notes reseller channel, which had over 6,000 resellers of Notes during its high point. In addition, from 1992 to 1995, Moore managed the IBM/Lotus relationship through its acquisition.
Keeping his Lotus connections alive, Moore and Halvorsen are principals in the Clear Ballot Group, "a company focused on bringing a new class of tools to election officials that lowers the cost while improving the accuracy and transparency of elections in America," says Moore.
On the end of the Lotus name, he says, "Notes was a very special product. Introduced three years before the Internet began to take off and well before broadband, it answered a need that exists today: tools that help people communicate and share information routinely and more efficiently. As to how I feel: a little sad but, in reality, the acquisition was in 1994, so it's probably time," adds Moore.
Lepofsky worked for IBM/Lotus from 1993-2007. He helped run the Notes/Domino customer council, was part of the product marketing team, worked with the business partner organization, and worked on the strategy team that helped share the future software products. "I made my name within the Lotus community by running the Lotus Notes Hints and Tips blog which I started in January 2005," says Lepofsky.
For three years, Lepofsky was the director of product marketing at Socialtext, one of the pioneering "social business" startups. For the last 18 months, he has been vice president and principal analyst at Constellation Research, an organization that studies and provides efficiency methods for employees to adopt teamwork strategies to more effectively accomplish job tasks.
On the end of the Lotus name, "I think it' an excellent move and one I was outspoken about for a long time," says Lepofsky. "However, let's not single out the Lotus name; I wanted to see all the Software Group division names gone from public use. The products customers buy from IBM are no longer developed in divisional silos. Lotus, WebSphere, DB2, Rational, Tivoli all these divisions contribute to each other. Customers are not buying from a division, they are buying from IBM."
Sartain is the author of "Data Networks 101" and a freelance journalist. She can be reached at email@example.com.
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