Can Lotus pick up the pace

CAMBRIDGE, MASS. - Despite top billing in the collaboration market, Lotus faces critical challenges this year after a lackluster 2000 in which it failed to ship any major new products, including a promised cornerstone server for knowledge management.

With the company's annual Lotusphere conference next week, Lotus will try to rebound by focusing on key areas such as knowledge management, XML integration, and wireless and hosting features for its flagship Domino server. The company plans to announce a restructuring at Lotusphere to help it accomplish these goals.

Lotus' success in rebounding will hinge at least to some degree on two pieces of software - Lotus Discovery Server and RNext, the follow-on to Notes and Domino R5.

The first will finally ship this year but take time to mature, while the other probably won't be available until late this year or early next.

Those lag times are just part of the battle Lotus will have this year. It also must explain why parent IBM is partnering with key Lotus rivals and how the two companies are progressing in their technical integration of Domino and IBM's WebSphere application server.

Lotus customers appear to be itching for action.

"Last year was flat for Lotus from a release perspective," says Dave Bailey, e-commerce and messaging architect for Imerys, a global mineral processing company in Atlanta. "Maybe they were focused on getting people to move to R5. But this year they have to deliver compelling reasons to migrate to the R5 client, explain what [the knowledge management system called] Raven is, and ship XML tools we can start testing with our current applications."

But pressure is also coming from current innovations evolving outside the traditional collaboration market. Those include a number of interesting options for IT executives, including Web-based and hosted collaboration tools, customer interaction applications, and peer-to-peer software such as that introduced by Notes creator Ray Ozzie called Groove.

"I see the collaboration market heating up with Lotus as the leader that can't get by with the suite approach anymore," says Matt Cain, an analyst with Meta Group. "Lotus needs to be more nimble as the market evolves."

Cain says it would be logical for Lotus to head toward offering Domino as components "so that you could pop collaborative objects inside of applications or portals" instead of having a discreet collaboration system. He says that brings collaboration "in context" with applications firms already use.

In the meantime, Lotus must ship the two products that will help it keep pace with major industry trends toward knowledge management, hosting, wireless and XML.

Next week, Lotus is expected to announce an imminent shipping date for its key Discovery Server, which was due six months ago. The server is the highlight of Raven, which has been troubled since its debut. Lotus broke the package into two pieces last year, shipping the portal-building tools called K-Station after development of Discovery Server lagged.

Now Lotus faces an uphill climb as its impatient parent IBM signed deals in December with Lotus competitors Plumtree and Tacit Knowledge to fill holes in IBM's Corporate Portal Offering, which will compete with Raven.

"If Lotus had delivered Raven six months ago as planned, IBM wouldn't have had to partner like it did and Lotus wouldn't be competing with the mothership," says a Lotus business partner who requested anonymity.

Lotus also will spend significant time at Lotusphere detailing RNext, the upgrade to Domino R5 designed to boost Domino's credibility in major markets, particularly application service providers (ASP). CEO Al Zollar, who took the helm at Lotus last year, has said the company's ASP strategy will be a major source of revenue.

RNext features will include the ability to securely isolate multiple customers on a single Domino server, delegated administration and performance improvements aimed at hosted services.

The features are an answer to a big push in the industry to deliver "software as services" instead of shrink-wrapped applications.

But another move by IBM, this time a deal to include messaging software from SendMail on IBM's eServer series for service providers, creates another hurdle for Lotus with ASPs.

"The relationship sends a signal to the market that Domino will remain an enterprise-based messaging system," says James Kobielus, an analyst with The Burton Group. "It means Lotus will have trouble positioning Domino as a boundary messaging system for ASPs."

In addition to ASP support, RNext will bring enhancements in support for XML, a key data exchange format for e-commerce. RNext will include a set of classes that make it easier for developers who know LotusScript and Java to use XML.

"What I'm looking forward to is Lotus to streamline the handling of XML, so that a developer can treat it just like any other data source," says Scott Wenzel, who maintains a number of unofficial Lotus-related Web sites and is a Notes administrator for a federal agency.

The Domino XML classes will be paired with the Lotus XML Toolkit, a major milestone for Lotus that should ship early this year.

"The toolkit will allow everything in the Notes data store to be represented in XML, including rich text," says Beverly DeWitt, senior manager for Domino developer marketing.

Wireless is another key area for RNext, as the software will improve upon connectivity offered by Mobile Notes and Domino Everyplace.

Can Lotus pick up the pace?

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