Lotus CEO Resigns

FRAMINGHAM (01/07/2000) - With almost 50 million e-mail messaging seats credited to his tenure at Lotus Development Corp., the company's president and CEO, Jeffrey P. Papows, surprised observers last week and announced his intention to resign effective Feb. 1. Papows remained vague on his postdeparture plans.

He denied that published allegations of impropriety and pending sexual harassment charges factored into his decision.

IBM has named a 23-year IBM veteran, Al Zollar, to the CEO slot at Lotus. For the past 18 months, Zollar, 45, was general manager of IBM's Network Computing Software Division. Zollar plans to move from New York to assume his new role in Cambridge, Mass.

Analyst Tim Sloane at Aberdeen Group Inc. in Boston said Papows' departure will give IBM a chance to bring the Lotus unit in closer to the fold.

"Since its acquisition by IBM, Lotus has been repositioning its products as part of the IBM product line, slowly and gradually," Sloane said. "They are at the point now where their sales and marketing components are tightly coupled with IBM's sales and marketing campaigns." He also said he expects IBM to downplay Lotus' separate brand identity.

IBM didn't comment on the reason for Papows' move. Papows, 45, started at Lotus as a marketing executive in 1992. After IBM bought Lotus in 1995, Papows was promoted to president, and a year later, to CEO. Papows said he has no specific job plans but would like to "own and build" an independent company.

"I was determined not to do what is sometimes done and look for a job while I was in this job. It's not fair to the customers or employees, so I've literally done nothing about that," Papows told Computerworld. "But I'm sure I'll end up running a consequential software organization, as I have always done." Papows had been president of Ottawa-based Cognos Corp., before Lotus. Analysts said his marketing prowess, with backing from IBM, helped grow Lotus Notes and Domino sales. "Seven years makes a big difference in this market," said President Amy Wohl at Wohl Associates Inc. in Narberth, Pa.

Then last April, The Wall Street Journal published reports that Papows trumped up his résumé and stretched the truth about his military background and personal history. Papows still faces charges of sexual discrimination from a female subordinate.

Papows said those allegations didn't factor into his decision to leave. "It was never pertinent from a business perspective to begin with. IBM was never less than fully supportive," Papows said. "It certainly has nothing to do with my decision now."

One business partner, however, disagreed. David Shimberg, chief marketing officer of IT Factory Inc. in Cambridge, Mass., a Lotus independent software vendor (ISV), said Papows' stepping down "removed the black cloud that was sitting over this organization and its most senior manager."

"The fact that Jeff has decided to resign and will stay on to make the transition, from our perspective, is a good decision," Shimberg said. "It clears the air and gives us a better opportunity to build a longer-lasting relationship."

Shimberg said the negative publicity created uncertainty among customers with ISVs hoping to build a better relationship with Lotus. "We've been treading water and it's been a distraction," he added. "Jeff is a good person and he understands the partner, but there was a loss of the ability to move things forward [after the allegations arose]."

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