Classy, competent and clued-in

Classy, competent and clued-in

Nobody will ever accuse Lotus Development CEO Jeff Papows of passing the buck. Whether it's taking personal responsibility for the delay of Notes Release 5 (R5), or missing the boat on the Linux phenomenon, Papows invariably takes the knocks with self-deprecating grace. If you're willing to call yourself a "jerk" or "clueless", chances are you're one of the most competent, clued-in executives around. Don Tennant sat down with the Lotus CEO for a quintessentially Papows-esque, tell-it-like-it-is interview.

IDG: You told the story recently about how you were accosted at the movies and in your driveway and everywhere else when you kind of dismissed Linux last year, and you said you've sort of seen the light now.

Papows: Well, it's because I put my foot in my mouth in Europe.

In any case, are you absolutely convinced now that Linux is going to be a strategic platform for Lotus, or are you just hedging your bets?

I'm probably just hedging my bets. I'm more convinced now than I have ever been, but I don't know a lot because we've got very little practical experience.

The feedback from the customer base and the business partners in the market is almost uncanny. I mean it's religious-like. I haven't seen this kind of fervour since [Lotus Notes creator] Ray Ozzie. So, if that's an indication, my bet is it probably is going to be reasonably important.

The irony was that when I said, "The world needs another Unix variant like a hole in the head" that day in Europe, what I didn't know is that we already had it running in the labs. I went out to the labs a couple of weeks later and I saw this server running that I didn't recognise and I said, "Gee, what's this? Oh, that's the Linux version." It would have been nice if somebody had told me. So I probably went through all that aggravation for nothing.

So what, exactly, are you doing with Linux right now?

It's a Domino server and it'll ship in the second half of the year. I don't know more than that because we have some other priorities preceding it, mainly the [IBM System] 390 version, which will ship about mid-year, which is comparatively more important. There's no client. In fact, we don't do any Motif or Unix clients anymore. There just hasn't been enough demand for them.

Do you think Microsoft has reason to be concerned about Linux?

I think they have reason to be concerned about Unix. What's interesting is we've always been very Microsoft-centric. We continue to be, because I'm not going to make the mistake of not being that. It would be the dumbest thing I could do. We default by being very NT-centric, very Windows 2000-centric, very IE [Internet Explorer]-centric. I mean, Microsoft operating systems, XML, anything they're interested in, I'm all over. I will never make that mistake.

That said, we had, if you go back to '97, been shipping maybe 65 per cent NT. Last year though, a couple of things happened: the AS/400 platform took off and that accounted for about 10 per cent of our servers. It was the single most successful first year mix we've ever had, partly because I think we have a captive base there, captive to some degree. Obviously we get a lot of help from IBM. It also scales like nothing I've ever seen, which is a credit to the IBM labs because, by the way, IBM did all that work, it wasn't Lotus.

I want to be candid about this, our data isn't perfect, this is like the cobbler's son without shoes, because my information's less precise than I'd like it to be -- but it's directionally correct. In the second half of last year, we saw NT flatten out and Unix catch up, meaning AIX and Solaris didn't see a whole lot of HP-UX - that dropped off. But AIX and Solaris picked up, I think because there was a lot of server consolidation going on.

People that were in the client/server craze who finally figured out the more moving parts on the network the more the aggravation, are consolidating to bigger four- and eight-way SMP boxes. Unix just scales. We have AIX and Solaris implementations with 10,000 concurrent Domino users on a single server. It's hard to do that on NT.

So, if I were Microsoft, I'd be doing what they're doing. I'd be working real hard on Windows 2000 and I'd be focused about Unix. Linux is just interesting because it has all of this fervour behind it, but I don't know that technologically it's any better.

Microsoft president Steve Ballmer threw out a teaser at the recent WinHEC conference that said Microsoft is "thinking with great interest" about opening up the Windows source code. Do you believe that?

I'm not a big believer in open source, generally - Linux or otherwise. I mean, if Ballmer said it, I'm sure he's considering it because he's not prone to running around speaking loosely. Personally, I think that open source and having this notion that you're going to get a lot of controlled incremental kind of development is a bit suspect. I mean, we came through this hernia of an R5 project where we had a thousand people working on this. I don't know how I would have managed another 1000 people outside the firewall I couldn't control. I think it's interesting he'd consider it, but I don't know that I'd go there.

Have you read Bill Gates' new book, Business @ the Speed of Thought?

Yeah, I did, actually. I thought it was pretty good. I actually thought it was better than the last one. It was very readable. I thought it was a well-written book. I was interested to find there was so much knowledge management stuff in it because a couple of years ago they were criticising us for having invented this buzzword, and now Microsoft is generally trying, I think, to co-opt our early market claim to that term. Bill talks about it very credibly. In fact, it would be very hard for me to criticise any of it because he talks about it in very much the same way we talk about it.

I thought the book was good. I now have a newfound respect for authors because having written a book [] last year, it was infinitely harder than I would have imagined. There are three phases to writing a book. There's phase one, which is sort of, "Oh I'll put on my bathrobe and slippers and gee, this is intellectually interesting." That lasted about a night. Then there's phase two, which is "Oh my God, that's only one chapter." Then there's phase three, which is, "This goddamn book," which is the longest phase. It's really hard.

How's your book doing?

Moderately well. I don't know anything about that business, so I have very few metrics to go by. In the United States, it's sold about 50,000 to 55,000 copies, which for a business book I guess is OK. The publisher seems to be happy. I gave all the proceeds to charity, so it's not like I'm financially tracking it all that closely. The Korean version has just come out; the UK version has just come out. The Chinese rights have been sold. The foreign rights are being snapped up - people are buying them. I guess it's a moderate success. The most successful part is that it's done.

What's your biggest headache right now? What are you most concerned about?

Average sales prices - meaning, to get what the list price is. Microsoft is continuing to dump product into the marketplace, basically giving it away. And we're continuing to win, competitively, but sometimes at some cost. And given the amount of R&D that we put into these platforms, to get paid less than the price of a cheap sandwich, or a coffee is less than gratifying.

I constantly look at the pricing model, I constantly look at what customers want and I have to bend to the customers' wishes, obviously. But I can't, in my own head, rationalise the prices SAP AG and PeopleSoft and others get paid for their software and the amount of R&D that goes into ours - the more ubiquitous use that it has. Let me put it this way - the industry is getting an incredible bargain. And it's not going to change. But in my wish list, I wish we'd get better price realisation.

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