Lotus did get the latest release of its LearningSpace application out the door on time. Version 4.0, which shipped last month, has been beefed up with "Web self-directed learning" technology, which allows for self-paced training via the Net. Lotus gained that technology when it acquired Macromedia Inc.'s Pathware software last July. The new release of LearningSpace also offers improved testing and results tracking and reporting capabilities.

By combining LearningSpace with IBM's consulting and professional services and hosting infrastructure, Mindspan Solutions is able to deliver end-to-end distributed learning packages that let users take courses live or at their own pace. "We're the only company that can do that," VP Sanders says. It's not the only company that's trying, however. LearningSpace competes against such distributed learning software and service providers as Docent, Hewlett-Packard, Mentergy, and Ninth House Network.

But analysts say Sanders' boast is not idle. "It's an extensive solution," says Brandon Hall, founder of E-learning research firm BrandonHall.com, of Mindspan Solutions' software and services. "It's world-class in scope and scalability."

Rouse Co., a Columbia, Md., real-estate development and management company, tried out several Web-learning products and services before settling on LearningSpace. The other offerings suffered from technology problems, such as slow download times for course materials, says Joel Manfredo, Rouse's VP and information strategies director.

The company, which says it has seen significant savings by using LearningSpace, plans to do most of its training online. It first deployed LearningSpace about a year ago, training more than 600 employees in 70 locations to use a custom-built budgeting and financial forecasting system through its intranet. The company was able to train employees in eight days, rather than the five weeks it would have taken using a traditional classroom approach, Manfredo says. Training employees the old way also would have meant putting 12 instructors on the road for those five weeks; in addition to the expenses they'd incur, their absence would have an impact on Rouse's productivity. The company would also have to eat the costs of the delay in implementing the technology while waiting for all employees to get up to speed.

Rouse seems to be proof of Zollar's argument that time-to-training is as important as time-to-market in helping companies stay competitive. And Manfredo is sure he's betting on the right company to keep Rouse competitive. "The most significant piece of choosing Lotus was my comfort in Lotus having a handle on what E-learning is all about, where the industry is going, and that its product would be a leader in that direction," he says.

For the moment, Notes and Domino remain at the core of Lotus' product strategy. Despite several years of head-to-head competition from Microsoft Exchange, Notes sales continue to grow. As of the end of 1999, Notes/Domino had 55.3 million installed seats vs. 44.2 million for Exchange, according to the vendors. Boosted by Lotus' midyear shipment of Release 5 of the Notes/Domino system, Notes outsold Exchange in the fourth quarter, 8.5 million seats to 5.5 million, according to market-research firm Messaging Online.

"Lotus is still the kingpin in its core area," says James Kobielus, an analyst with the Burton Group, a market- research and consulting firm. "It's still at the top of the groupware and collaboration software market."

Notes is a cornerstone technology within many of the world's largest companies, including Chase Manhattan and GM. It's the primary E-mail and collaboration system for more than 100,000 GM employees, Scott says, and the foundation for hundreds of applications.