What’s Good for the Groupware . . .

In launching a $3.3-billion bid for Lotus Development Corp., IBM Chairman Louis V. Gerstner Jr. ostensibly is looking for ways to better serve Big Blue’s customers and make the world’s largest computer company a real competitor in the fast-growing “groupware” marketplace. But there’s no question that this hostile bid is really about who gets to define and control the future of corporate computing.

IBM desperately--and desperately is the operative word here--needs to be seen once again as a company that can set technical standards in the information marketplace.

Where Microsoft pretty much defines the technical standards for operating systems for computers, IBM is now bidding and betting billions that it can define the standards for operating systems for corporations. This is really a battle to determine how people and computers will combine to create value in tomorrow’s companies. Having invested billions in abortive efforts to dislodge Microsoft as the standard in operating systems, IBM is trying to shift the battle to the organizational operating system.

At the center of IBM’s newest global ambition is a software package called Notes--the most successful product Lotus has shipped since it captured the electronic spreadsheet market in the 1980s with Lotus 1-2-3. Notes is one of the first--and most widely used--examples of groupware, software that’s designed to let people collaborate on personal computer networks.

The product is cleverly designed and has a wide following in organizations ranging from General Motors to McKinsey & Co. to Price Waterhouse to the Central Intelligence Agency. While there are competing groupware packages, such as Novell’s GroupWise and Collabra’s Share, there should be no argument that Lotus Notes has had an extraordinary impact on how organizations are rethinking the role of information technology in managing themselves. Many companies that bought Lotus Notes have transformed the way they shared information. Other companies, alas, have simply used it as value-added electronic mail.

Now, some pundits declare that what’s important here is that corporate computing is shifting away from being a collection of computational devices to becoming more of a medium of communication. That’s accurate without being quite true. What’s really going on is the gradual realization that computers and their networks are more valuable to corporations when they are used to create and manage interpersonal relationships, not just to create and manage information.

Groupware products such as Lotus Notes shift the technical design sensibility away from using software to structure data to using it to structure relationships--not unlike the way we use our voice mail systems to screen our calls as well as exchange messages. The goal becomes the creation of value through human interaction, not just better information. Groupware thus becomes a kind of operating system that helps manage and coordinate critical relationships and the flow of information in a corporation. That’s why an IBM feels compelled to seize on a product that’s perceived as a winner in this emerging marketplace.

The problem, however, is that groupware products such as Lotus Notes--no matter how cleverly conceived--have been created in the most tumultuous and volatile time in the history of network communications. The very admirable ideas behind a Lotus Notes are being superseded and absorbed by the rise of other kinds of computer networks.

For example, at precisely the same time Lotus Notes took off as a bestseller, the World Wide Web on the Internet--the multimedia section of the global computer network that connects networks--also began to skyrocket. Today it would be possible for every employee in, say, a Fortune 1,000 company to have his or her own “home page”--that is, a multimedia database where pictures, sound and text could be interlinked and interconnected to other home pages. Work groups could easily set up their own sites on the Web.

Now, does the World Wide Web have all the functionality and security of a Lotus Notes at this time? Of course not. On the other hand, every day entrepreneurs and established software companies--including Lotus and IBM--are introducing ways to make this portion of the Internet more valuable to businesses that want to re-network themselves.

In many respects, an innovative company could get most of the value of a Lotus Notes, at a far lower cost, by choosing to use the World Wide Web as its networking medium. In terms of sheer cost-effectiveness, technological infrastructures such as the Web are destined to be rivals as much as partners to groupware packages such as Lotus Notes. A company such as Netscape--which produces software that lets people browse the Web and build their own Web sites--is as much a rival to Lotus Notes as a Microsoft.

That doesn’t mean IBM’s multibillion-dollar bid for Lotus is either foolish or overpriced. On the contrary, a company such as IBM--or AT&T--might; be far more successful in rapidly turning Notes into a groupware networking software standard. IBM used to be quite successful in getting their big company customers to adopt single software standards. Perhaps it can be so again.

But the most important point here is that, as we see our technologies more as a medium to design how we should work together rather than merely design how we share our information, we are going to see all kinds of new groupware models and approaches enter the marketplace.

That’s a terrific thing for companies that want to use technology to customize how they create value internally and with their customers. That may not be such a good thing for giant companies seeking to establish new marketplace standards.

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Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology. He writes this column independently for The Times. He can be reached at schrage@latimes.com by electronic mail via the Internet.

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