IBM Increases Ties with Lotus Unit

THE APPOINTMENT of a longtime IBM executive as Lotus' next president and CEO, and a product strategy that increasingly merges Lotus Development Corp. and IBM Corp. technology have sparked concerns among customers and some partners that the familiar yellow and black of Lotus could be fading to IBM blue. Specifically, concerns were raised that the needs of Lotus users may be overlooked if its strategy is tied too closely to that of IBM.

One Lotus user, who requested anonymity, said he worries about IBM's involvement.

"I'm a little wary of having [IBM] talk so much about 'synergy' and working together," the user said. "I get the feeling they're hovering around and waiting to scoop Lotus up completely into the IBM way of doing things. It's not a comforting feeling, I'd say."

However, others said they would welcome a more active IBM role.

"IBM is definitely exerting control, in a positive way, over a somewhat unruly pupil," said Mark Elder, vice president of Transaction Information Systems, a New York-based systems integrator and consulting company that is a major partner of both IBM and Lotus. "Lotus' product development has been undisciplined. They need to grow up."

Some traditionally loyal business partners voiced objections over Lotus and IBM waltzing into product and service areas previously left to the channels.

An official at Lotus, who asked not to be identified, said partners have brought home the point that better communication and coordination are needed to avoid conflicts, especially at marquee accounts.

Another area of uncertainty is how heavy-handed IBM will be in favoring WebSphere as it integrates it more tightly with Notes/Domino. Despite assurances from high-level IBM executives that both products will continue to serve important, although different functions, some believe that WebSphere will become the more strategically important platform.

"I know what they are saying now, but I have to believe that over the next couple of years they will gravitate more toward Websphere given its more natural ties to things like the Internet and platforms like Linux," said Josh McCabe, a LAN administrator at a large brokerage company in the Midwest.

At the Lotusphere business partners event, tension rose over the issue of channel conflict, several attendees said. However, not all partner feedback was negative, and many third parties rated prospects as very good.

"They have a good, strong partners program, and there's plenty of business for everybody," said Joseph DiGangi, manager of information systems at RWD Technologies, in Columbia, Md., noting that Lotus needs to be able to help partners meet the deadlines of intranet and electronic-commerce projects.

Relations with the business-partner community are inherently tricky, said Michael Zisman, Lotus executive vice president of strategy, but he added that market demands mean that these relationships must evolve.

"The challenge is to be clear in communicating what the high watermark is of the infrastructure you're developing and where the partner can add value," he said. "They need us. We need them. It really is an ecosystem."

Lotus Development Corp., in Cambridge, Mass., is at