Zollar's appointment at Lotus is only the latest-albeit the most dramatic-indication of the two companies' converging paths. In the last year, Lotus has worked closely with IBM to leverage potential synergies between their technologies. The companies, for example, are developing links between Domino and IBM's WebSphere Web application server, due later this year. These will let the vendors offer a complete Internet application and E-commerce platform with high-volume transaction, replication, search, and workflow and collaboration capabilities. Raven is expected to include core database technology from IBM's DB2. Later this month, Lotus will ship Mobile Notes client software that runs on IBM's version of the Palm personal digital assistant.

IBM and Lotus have been cooperating in a number of other areas-from the launch of the Mindspan Solutions unit, to the joint creation last year of the Knowledge Management Institute, which examines the business and social aspects of knowledge management, to increased cooperation between their sales forces. In an example of the latter, Zollar cites a recently won contract with the U.S. Navy to supply Lotus software for several carrier and battleship groups. Zollar says IBM's sales force, which has good connections in the Pentagon, will help Lotus capitalize on that win throughout the Department of Defense.

Could IBM and Lotus become too close? For some, the answer seems to be yes. Papows, Zollar's predecessor, gave as his reason for departing his desire to manage "an independent software company." IBM is already in charge of Lotus' human resources, finance, and administrative operations-and some analysts fear that Lotus' entrepreneurial spirit could be stifled if additional consolidation occurs. "It's no secret they've had a fairly significant brain drain since IBM acquired them," says Larry Hawes, a senior analyst with the Delphi Group. "They've lost a lot of experience, a lot of talent, and a lot of ideas."

In his short time as CEO, Zollar already has had to deal with a number of high-level defections, including John Throckmorton, who as executive VP of worldwide development and support oversaw Lotus' development efforts; James Feiger, who as executive VP of worldwide field operations ran Lotus' sales efforts; and Mike Laginski, senior VP for North America. Zollar attributes the turnover to the booming Internet economy rather than to concerns about Lotus' autonomy. "It's an outright war for talent," he says. "And we're engaged in the war just like everyone else."

Zollar has worked hard to debunk the idea that Lotus is losing its independence, beginning with his speech at the Lotusphere user group conference in January. Noting that he'd already been asked many times about whether his appointment meant the end of Lotus, he said, "I'm going to answer that for the last time. No, it doesn't." But, of course, Zollar has had to answer the same question many times since.

"Changing one person is not going to change the culture of an organization," Zollar insists. "I don't want to change Lotus' high-energy culture-I want to enhance it." Zollar has promoted from within to fill vacant executive posts. But he won't rule out reaching back to IBM to add to his management team. "I want to look for talent wherever I can get it," he says.

Lotus customers generally remain upbeat about its role as an IBM subsidiary. "The melding of the two companies has been nothing but positive," says Chase's Candela. He says that new availability and data integrity features in Domino Release 5 were based on transaction log technology from IBM operating systems, for example, and also points out that since IBM took over, Notes and Domino have been ported to the AIX, OS/400, and OS/390 operating systems.

That has worked to Lotus' advantage in more than one instance. For example, the ability to have a highly scalable system behind United Airlines Corp.'s MySkyNet portal for 130,000 employees was an "overriding requirement, given the company's geographical spread," says Ajay Singh, research and development director within United's IT group in Elk Grove, Ill. Domino on an S/390 met that requirement; competing products from Microsoft and others couldn't. The airline is constructing the portal based on Domino and Lotus' Sametime instant messaging and collaboration software. Currently being tested by 5,000 employees, the portal will become the primary interface for United workers into the airline's operational applications and other information systems. It will let workers share project plans, hold online meetings and group discussions, and communicate in real time.

GM's Scott has mixed feelings. He says being part of IBM has slowed Lotus a bit in reacting to marketplace changes, pointing to the delays with getting out Raven and Notes 5.0. But he admits his fears that Lotus "would lose its aggressiveness and entrepreneurial character haven't come to pass."

That edge will be important to maintain as Lotus again tries to shift direction. Rosy projections of market growth have fallen short in the past, and rosy estimates for the potential knowledge-management and distributed-learning markets may prove to be illusory. But Zollar is sure the company is heading in the right direction. The challenge, he says, is to communicate its mission to customers and the rest of the outside world. Adds Zollar, "We need to make our directions clear in terms of our ability to offer value to customers in this rapidly moving new economy."

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