Lotus chief executive resigns

Jeff Papows has resigned his post as president and chief executive of IBM's Lotus subsidiary, after a year of controversy.

He will remain at the company until 1 February and will be replaced by IBM veteran Al Zollar at a later date.

Papows' resignation comes after a year of controversy. Last May he was named in a sexual discrimination complaint filed by a former Lotus executive and was also accused of lying about his education and military record.

In a memo sent to Lotus employees, Papows wrote: "I have made a decision to resign my position as Lotus president and CEO and will remain at the company until 1 February to assist in a transition until sometime in the second quarter."

He also wrote that "while past years have meant more to me than I can easily articulate, I would like once again to lead an independent organisation. It would not be fair to you, our customers, or IBM for me to pursue that objective while continuing as your CEO."

Company officials said Papows, a seven-year veteran of Lotus, wants to pursue entrepreneurial goals elsewhere but he had no specific plans at this time.

Bob Djurdjevic, president of Annex Research, pointed out that in a software company, "your assets walk out the door every day." He also said this is indicative of when IBM bought Lotus in 1995 and wondered how Big Blue would keep talent such as Jim Manzi, Papows' predecessor, who walked after about 90 days.

"Anything with an e- before it tends to be more exciting and more lucrative," Djurdjevic said, compared to IBM and the opportunities in an old-fashioned company.

He said while IBM does not reveal the finances of its divisions separately, it usually highlights the successes of its other software acquisitions including Tivoli, but not Lotus. "IBM points to the parts doing well and glosses over those that are not, and Lotus has not been heralded lately," he explained.

There are roughly 36 million Lotus users worldwide against 29 million for Microsoft Exchange, but the Seattle giant won 8.1 million new users in the first half of 1999 as opposed to 7.4 million new users for Lotus, according to IDC.