IBM Reorganizes; Lotus’ Head Resigns

On December 29, IBM reorganized its software units in Somers, New York, into line-of-business initiatives and reshuffled its upper-level general managers. Shortly thereafter, Jeffrey Papows, head of IBM’s Lotus Development division, resigned. IBM has broken up the Network Computing Software Division (NCSD) and refocused five units reporting to John Thompson, senior vice president and group executive of the IBM Software Group, who heads IBM’s $13 billion software business.1. The Software Solutions and Strategy unit under the direction of Steve Mills, general manager, now includes a new group, Solutions and Integration, dedicated to Java and e-business solutions. Paul Loftus, vice president, leads this group reporting to Steve Mills. Loftus’ team includes Rob Smith, vice president and head of the Java Products group, and John Soyring, vice president and head of the Operating System group. The Solutions and Integration group also covers the Lightweight Directory Access Protocol (LDAP) line of business.2. The Lotus Development unit, led by Al Zollar, former head of NCSD and now president and CEO of Lotus replacing Papows, handles the Organizational Effectiveness line of business. 3. The Business Information and Transformations unit, led by John Swainson, general manager, includes the Application and Integration Middleware (AIM), the distributed computing environment (DCE) development, and the host integration lines of business.4. The Database Management unit, led by Janet Perna, general manager, now handles the Leveraging Information line of business.5. The Tivoli Systems unit, led by Jan Lindelow, president of Tivoli, now includes the Managing Technology line of business. Carl Kessler, promoted to general manager, heads the Tivoli SecureWay products and reports to Lindelow.According to an internal IBM memo, “the changes are a continuation of the Software Group’s realignment of brands to its new market segmentation.” These changes make a lot of sense if you remember that IBM supports a diverse, heterogeneous client base that typically focuses on solutions and line-of-business initiatives, not on any particular platform or technology. The reorganization also plays well into IBM’s $35 billion Global Services group by letting IBM’s other business units better initiate and support that group’s projects.One casualty of this reorganization was Lotus’ Papows, who announced his resignation on January 6. Formerly Lotus president and CEO, Papows came under fire in 1999. In April, hostile news coverage claimed that Papows had falsified his resume data, claiming false military ranking and false personal history. In May, Papows and his executive assistant, Sharon Ricci, were accused of sexual discrimination against female employees. Although it’s unclear whether Papows resigned because of these criticisms, the charges probably blocked his road to future advancement at IBM. Under Papows, Lotus engineered a strategy to position Lotus Notes as a groupware platform introducing products such as Sametime and QuickPlace, with a heavy emphasis on collaboration features and knowledge management. Notes and Lotus Domino server have succeeded in the market and have become a corporate standard. Papows leaves Lotus in good shape with strong earnings, a well-developed position in messaging products, and good products in the pipeline.