In the 1990s, Lotus Notes gained notoriety, in part, for the nifty collaboration features it brought to corporate e-mail. IBM's CEO at the time, Lou Gerstner, was so impressed that he paid a premium to consummate what began as a hostile tender to buy Lotus in 1995.
Notes went on to become an unqualified commercial success with some 145 million users around the world who use the product. Still, Lotus hasn't quite secured for itself the reputation of offering the must-have enterprise collaboration technology in the age of the Internet.
What with the proliferation of competing Web-based technologies targeting that market, it will be tough for any one company to claim that moniker for itself. But Big Blue will stake its claim with its upcoming entry--courtesy of its Lotus division in Cambridge, Mass.--with a cloud computing angle.
The work comes out of a project that got under way at Lotus last fall to develop an Internet-based collaboration and social-networking service. In Web 2.0 parlance, the idea was to meld social networking with business-collaboration tools in a way to make it easier for corporate users to use and share information. The project was to culminate in finding a way for users to tap the Web to access applications such as instant messaging or document sharing.
So it is that IBM on Wednesday will announce a service called LotusLive Engage, what it bills as an integrated social networking and collaboration cloud service. You can go up on the Web site today and take a tour, but this is a teaser test run. Although the official announcement will take place at the O'Reilly Web 2.0 Conference, which opens in San Francisco, LotusLive Engage becomes commercially available on April 7.
Brendan Crotty, program manager of LotusLive said the project, initially geared at the small to mid-size business market, benefited from often frank feedback by beta testers who told IBM what they liked and disliked about the interface. In the hour-long demo I had Tuesday afternoon, it appeared that IBM's designers had taken those comments to heart. The console layout was lapidary and intuitive. Enterprise users who previously worked with products like Notes or Microsoft Exchange shouldn't have any trouble figuring out what does what.
LotusLive Engage's communications and collaboration tools work both within and beyond the corporate firewall so that employees can interact with clients, partners, or suppliers. IBM's phrase to describe what's going on is "extranet collaboration." The short list of the features include profile and contact management, online meetings, file sharing, instant messaging, and project management capabilities.
Any information warehoused on LotusLive services will live in a cloud managed by IBM. Pricing will range from $10 to $45 per user.
I don't think the question is so much whether the product's bells and whistles will spark the same keen interest evinced by the corporate world when Lotus Notes debuted. Cloud computing may be the buzzword du jour, but let's take a breath. Fact is that enterprise customers are still in the tire-kicking phase. There remain myriad questions within IT about security and the guarantee of up time for companies which rely upon the cloud.
But the fact that this is coming out of IBM helps account for the approximately 30,000 businesses that were involved in the pilot program leading up to Wednesday's announcement. Let's make no mistake about it: here's one case where size really does matter.
History never repeats itself exactly, but rereading Kevin Johnson's memo updating the troops on Microsoft's bid to buy Yahoo, I was struck by the contrast with another software mega-merger saga that dominated headlines 13 years earlier.
As we reported on Friday, Johnson, who heads up Microsoft's Platforms & Services division, detailed how a combination with Yahoo would have a tonic impact: Online advertising customers would gain a viable alternative to Google, while Microsoft would carve out a bigger piece of a nearly $80 billion market.
Money was no object for Lou Gerstner.
(Credit: IBM)In June 1995, IBM stunned Lotus with a unsolicited $3 billion buyout bid. At the time, Lotus was in a world of hurt. Sales of the company's franchise product--its office applications suite--were slumping thanks to stepped-up competition from Microsoft. CEO Jim Manzi knew that the company's future depended on Lotus Notes, the hot groupware product spearheaded by the company's star developer, Ray Ozzie.
Unfortunately for Lotus, sales of Notes weren't climbing fast enough to compensate for the accelerating sales slump elsewhere at Lotus. So when IBM launched its unsolicited tender officer, Lou Gerstner expected a welcoming response.
Manzi instead gave Big Lou the middle finger.
And so what followed was a week full of back-and-forth statements and head feints as the real negotiations played out in the back rooms. At one point, Gerstner got on his plane to pay a special call on Ozzie, whose team of developers worked outside the corporate headquarters in the Boston suburb of Beverly. (The biggest historical irony in all this is that Ozzie is now the go-to technology luminary at Microsoft.)
Whatever charm Gerstner used to convince Ozzie to stick around, it worked--that and a corporate decision by IBM to up its offer by a half billion dollars. Suddenly, Manzi was all smiles for the cameras, touting the combination with Big Blue as a big win for customers, shareholders, and employees. (Amazing how the same script winds up getting used time and again.)I've often since wondered how Lotus might have fared if it remained an independent company. Would Notes really prove to be Lotus' savior? Impossible to say, but my back-of-the-envelope recollection is that Microsoft was marshaling its muscle behind its own groupware product. Bill Gates wasn't strong enough to shove around Gerstner, but he had already shown himself capable of outmaneuvering Manzi's Lotus. My guess is that Lotus would have wound up no differently than WordPerfect, a one-time software powerhouse also brought low by Microsoft.
Jerry Yang knows the history of the software business. In the absence of a white knight emerging, he doesn't have a lot of good cards. So for the time being, playing hard to get may the best way to coax a higher bid out of an unwanted suitor. After all, it worked for Manzi.
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