Lotus restructuring rumours fly in Florida

Lotus chief executive Al Zollar has dismissed as "just rumours" speculation that the IBM software subsidiary is embroiled in a management restructure and strategic repositioning.

At this year's Lotusphere user conference held in Orlando, Florida this week, the theme was 'In the know'. But many partners, customers and industry watchers felt very much in the dark over the future of Lotus.

Computer Reseller News (CRN) has learned that a restructuring process is underway to align the Lotus subsidiary closer to its IBM parent. As part of this, up to 40 per cent of 'non-revenue generating staff' in Lotus worldwide are set to be either trimmed or absorbed into Big Blue.

The recent departures of several high-profile staff have further fuelled speculation. Earlier last year, senior executives such as Cathy Daum, vice president of the IBM/Lotus Software Partner Organisation, and David Parry Jones, corporate sales director for Lotus UK, left the company for pastures new. A bigger loss was technology guru Cliff Reeves, vice president of communications for product management, who left before Christmas.

Although Zollar has denied the restructuring rumours, many familiar with the company have told CRN that more executives at Lotus were either "standing at the edge of the precipice" or "actively seeking alternative employment".

It is also believed that Big Blue has held focus groups to assess the impact of rebranding software offerings such as Notes under the IBM moniker. Already, certain back-end functions such as HR, payroll and expenses have been assimilated by IBM servers. The next phase, one industry watcher familiar with the company told CRN, was the convergence of the two companies' marketing machinery.

Going further ahead, many have suggested that the Lotus sales operation could be integrated into IBM in the near future, turning Lotus into a software division. This is a scenario that both Big Blue and Lotus claimed would never happen when the systems and software services giant bought the software development company five years ago.

Meta Group analyst Ashim Pal told CRN that the realignment of back-end Lotus functions into IBM makes good process efficiency sense. He claims that the previous strategy to keep Lotus and IBM at arm's length was probably the right thing to do in the past.

"But this is now," Pal said. "It makes sense [for the two companies] to be a lot more co-ordinated, especially as there is some competition between Lotus Professional Services and IBM's own offerings."

The Lotus brand looks secure, however, after focus groups stated a preference for Lotus' name over IBM's when offered an alternative branding for the company's Notes collaboration software, according to a source.

Pal also told CRN that he didn't believe that the two companies "will always remain apart with Lotus as a separate entity".

First published in Computer Reseller News