Papows to Resign as Lotus CEO

Jeffrey Papows, the embattled CEO of Lotus Development, revealed he will leave the position Feb. 1 to possibly head an Internet start-up company.

Papows will turn over the reins of Lotus to Al Zollar, general manager of the IBM network computing software division. IBM purchased Lotus in 1995.

“[Naming Zollar CEO] is a cross-pollination that sounds like it will be healthy for the product set — [IBM] doesn’t seem to be moving to shake Lotus up at all or absorb it any more into IBM than it already is,” said Joyce Graff, vice-president and research director of e-mail at the Gartner Group, in Stamford, Conn.

Papows, who has been with Lotus for seven years, will stay with the company until some unspecified time in the second quarter of this year to assist with the transition.

According to one former Lotus executive, Papows may have been pressured to leave because Lotus Notes was losing new-user market share to Microsoft Exchange.

“As long as Notes had leading [market] share, [IBM] didn’t care how much money [Lotus was] burning in Cambridge,” the former executive said. “But then Exchange 4.x started outselling it among new seats.”

Jeff Tarter, editor of The Soft Letter, an industry newsletter in Cambridge, Mass., believes Papows may not have fit in with IBM’s changing focus.

“When IBM bought Lotus, the premise was that Notes would be the glue that held together this worldwide network of very disparate machines, and that’s a pretty good story,” Tarter stated. “Unfortunately for Lotus, IBM has come up with a much better story, which is [electronic] commerce.”

According to analysts, Papows’ resignation is not a complete surprise, considering the hoopla in April and May 1999 regarding several lawsuits and an article in The Wall Street Journal alleging Papows embellished his personal and military histories on resumes.

In April of last year, The Journal reported that Papows repeatedly lied about his personal history. The article stated that Papows padded his resume, concocted tales about daring feats when he was in the U.S. Marine Corps and on reserve duty, and lied about his personal history. Lotus officials and Papows denied the claims.

In May, Lotus was the target of several discrimination complaints, some of which specifically named Papows, including a sex-bias claim. Lotus officials countered that the complaint was “without merit” and contained “reckless and unfounded allegations.”