Monday January 18, 7:20 pm Eastern Time
Lotus unveils Web-ready Notes, tightens ties to AOL
By Eric Auchard
NEW YORK, Jan 18 (Reuters) - Lotus Development Corp. on Monday introduced a new version of its popular Notes inter-office software system that works like a Web browser and enlisted comic book hero Superman in a $100 million ad crusade to take market share from foe Microsoft Corp. (Nasdaq:MSFT - news).
Lotus, a unit of International Busies Machines Corp. (NYSE:IBM - news), also unfurled a pact with consumer Internet media giant America Online Inc. (NYSE:AOL - news) to deliver to news, e-mail and Web searching to the current base of 34 million Notes users.
The pact between the world's largest computer maker and the No. 1 supplier of Internet services to consumers and small businesses builds on Lotus' stronghold among Fortune 2000 office workers and AOL's 15 million mass-member service.
Lotus officials projected the number of Notes users to grow 47 percent in 1999 to surpass 50 million, an audience second only to Microsoft's more than 100 million Windows users. Those figures compare to 20 million Notes users at the end of 1997.
''In 1999, we will surpass 50 million Notes users,'' Lotus Chief Executive Jeff Papows said in a phone interview from Orlando, Fla., where his company announced the new Release 5 of Notes at Lotusphere, the company's annual customer conference.
The highly anticipated Release 5 of Notes was designed from the ground up with the Internet in mind, presenting to Notes users the look of an Internet browser instead of the electronic file and folder metaphor of older versions of the software.
At the same time, the new Notes business software system has begun to assume an increasingly central role in defining how corporate computer users locate, edit and share information on their PCs, across office networks and over the Internet.
Currently, Notes is neck-and-neck in a battle with Microsoft's Exchange software, a rival system for corporate messaging and inter-office collaboration that claims nearly as many users as Notes does.
IBM and Microsoft dominate the market for large corporate computer messaging systems. Notes had roughly 20 million users signed up at Sept. 30, but has been growing faster than Notes over the past year, according to industry estimates.
R5 Notes software makes it easier for office workers to send and receive business information and data over corporate Notes networks and to in turn stay connected with customers and suppliers via the Internet.
''We are taking on operating-system like proportions,'' Papows said, referring to the growing scale of Notes audience and the increasing importance of its software in how many business computer users locate and manage information.
The Lotus-AOL deal, the latest move in the industry to bring together two arch-rivals of Microsoft, will be followed by further deals to be unveiled within a month, Papows said.
''Watch this space,'' the Lotus CEO told Reuters, noting that he and other Lotus officials share close ties with top AOL executives. ''We're not done here,'' he said.
In a bid to open the woo customers away from Microsoft Exchange, Lotus introduced software that allows Notes to be run from any back-end database, including Microsoft Exchange.
This allows companies who have invested years to install such complicated systems to switch to Notes over time, without throwing away their prior investment in Exchange software.
Release 5 is do to ship in February, a few weeks or months behind Lotus' original schedule, but not an unusually long delay for corporate software as complex as Notes, Papows said.
Release 4.0 was introduced 22 months ago and Release 4.6, the last major version before R5, was issued 14 months ago.
Lotus said it had struck a deal with DC Comics, the Time Warner (NYSE:TWX - news) comic book unit, in which the superhuman image of Superman will be basis of an ad and marketing crusade on behalf of what Lotus is dubbing its ''Super.Human.Software.''
''Notes Release 5 gives humans super powers to do things they couldn't do before,'' John M. Thompson, group executive of IBM software unit, said in a separate interview.
He was expanding on how Notes provides users a single view of information stored locally on a PC, a remote office computer or out on the Internet, speeding access to information.
The worldwide Super.Human.Software campaign plans to use broadcast television, print, outdoor billboards, the Internet and unspecified nontraditional media and outdoor, Internet, and business and trade print advertising. The $100 million ad budget is a 35 percent increase over last year, Papows said.
Notes R5 front-end software provides users with quicker access to all of their most frequently used applications and combines Internet e-mail, news, calendars, Web browsing, document management and customized business software programs.
The deal with AOL would supply Notes users with access to real-time information culled from AOL's online print, audio and video news sources directly through Notes. Notes users could also chat via AOL's Instant Messaging service.
The AOL deal helps expand Notes potential audience beyond large corporations and into small and medium-sized businesses, Thompson said.
In a further effort to reach out to business networks, Lotus announced that Lawson Software had become the first maker of so-called ERP business integration software to link Lawson's system for creating business supply chains into Notes. Other ERP vendors such as SAP (quote from Yahoo! UK & Ireland: SAPG.F) and J.D. Edwards (Nasdaq:JDEC - news) are due to follow, he said.
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