IBM's acquisition of Lotus Development has freed Lotus from some of the short term performance pressure it experienced as a separate entity, according to executive vice-president and chief operating officer, Jeffrey Papows. Mr Papows, who with Michael Zisman makes up the new office of the president following the resignation of chief executive Jim Manzi, who previously headed up Lotus's high growth communications division. IBM paid US$3.56 billion for Lotus in July in the industry's biggest ever buy-out. Mr Papows said IBM ownership would not change the company's fundamental business thrust. He said the future would see an extension of the current focus, rather than a change of direction. IBM did not intend to try to micro-manage the company's affairs. But by becoming part of a bigger group, it had radically changed the way Lotus was run. 'When we were a publicly held company operating independently, all of our management decisions were guarded in 90-day increments because of Wall Street expectations and the appetite for performance. 'We have been conditioned for years to think about the current quarter and now we can afford to take a longer term, much more strategic view and perhaps make some significant investments with a longer window to quantify the return. With IBM, we have $84 billion worth of air cover.' Mr Papows said it had become clear that IBM wanted to continue Lotus policies on platform priorities and operating system preferences, thus encouraging continued support from alliance partners such as Sun Microsystems, Digital, Hewlett-Packard and Intel. Mr Papows said IBM deserved credit for its speed in deciding upon replacements following Mr Manzi's resignation. 'Jim announced his departure to (IBM chief executive) Lou Gerstner on a Wednesday, then on Friday Michael Zisman and I were appointed to this new office of the president. 'It was a 24-hour decision, which sent a clear signal to the marketplace that they had a strong desire to see Lotus function as an independent autonomous unit, with Lotus executives continuing to run the company. It has been quite an overwhelming sensation. 'It has all happened very fast.' Mr Papows said IBM's aim in buying Lotus was to win 'as much competitive market share above the level of the operating system argument as they possibly could.' It was motivated in no small measure by the continued growth of Lotus Notes, version four which is due out by the end of the year. 'We'll ship it December 31 in all likelihood but we will make the end of the year,' Mr Papows said. Microsoft is planning to launch a competitive product, Microsoft Exchange, around the same time and is also planning to call it version four, although it will be its first incarnation. 'It is the first time I'm aware of someone doing that,' Mr Papows said of the unusual naming strategy. The launch of Notes version four is significant to Lotus, according to Mr Papows. 'We have several hundred person years of engineering in it and there's a lot of new functionality there that people are very anxious to have. 'Notes has been in the market for six years. It was 10 years in development and involved a $500 million investment.' Another key improvement, Lotus Smartsuite 95 with Windows 95 adaptability, will also be available. Mr Papows said Microsoft had 'in some large degree clearly won at the desktop level, the operating system war. Windows is pretty prevalent.' Notes' strength was that it was a heterogeneous operating system that glues disparate computing platforms together. 'Notes is the only product of its kind. 'It is ubiquitous from a platform perspective. 'I think that had a lot to do with IBM's desire to acquire the company in the first place. 'Clearly the next major battlefield in software is in the networking as opposed to the client or the server phase of it.' Mr Papows said Lotus's Notes business continued to grow by triple digits annually. 'We have had some phenomenal growth. 'We are looking forward to the release of a major new version and looking forward to the point where Microsoft is in the market with a real product as opposed to Chalkware. 'That will probably make it easier to deal with all the hype. They announced the product three-and-a-half years ago and have yet to deliver. 'It is the ultimate Vapourware and it's a little like shadow boxing. The biggest single favour they could do us at this point is to ship it.' Lotus has built up its Notes business to the point that it can now claim more than 12,000 companies as business partners; either as value-added resellers, service providers or systems integrators or independent software vendors that write applications on Notes. Mr Papows said Lotus had been fortunate in being able to operate its Notes business in an environment almost devoid of competition. 'The only products in the market place are Notes and Groupwise from Novell, and Groupwise is still file sharing as opposed to a true client server. 'In addition to the customer base, a large industry has been established around Notes. That would not have been possible if we hadn't had this completely unique market position for as long as we have. We have been fortunate in that respect.' He said that while Lotus was no immediate challenge to Microsoft's dominance in stand-alone productivity applications, it had in Notes a well established brand. 'We also have a large customer base and we are trying to change the ground rules by shifting from an emphasis on bells and whistles and the simple adding of more features for the spreadsheet or word processor to a focus on functional extensions that service groups or teams of people as opposed to individuals. 'That is a different form of reference than has been the traditional case in the office.' Notes and communications software have made up the bulk of the Lotus revenue base since the fourth quarter of 1994.