Lotus CEO Abruptly Steps Down : Computers: Few are surprised by Manzi’s move, which comes just months after the firm was acquired by IBM.
Lotus Development Corp.’s controversial chief executive, James P. Manzi, resigned abruptly Wednesday, just three months after the PC software pioneer was acquired by IBM Corp.
Although Manzi had said at the time of the takeover that he would stay on to lead the company as a division of IBM, few in the software industry were surprised at his quick exit.
Manzi denied there was any particular event that caused his departure. But a source close to Lotus said Manzi had tried to persuade IBM Chairman Louis V. Gerstner Jr. to consolidate all of IBM’s software operations and place them in his charge.
“He made a big play for the software piece of the business and lost,” said a former Lotus executive. “When that happened, he decided to leave.”
Instead, Gerstner charged veteran IBM executive John Thompson with managing the company’s scattered software operations, a man with whom Manzi often clashed, sources said.
Manzi said little about alleged differences with Gerstner: “It would be silly to say that we disagreed about everything and it would be silly to say that we agreed about everything,” he said.
Rather, Manzi said, during the last two to three weeks he had begun thinking about his role at an IBM-owned Lotus and concluded, “While I have the attributes to run a $1-billion, or even larger, independent software company, I am not exactly the right person to be leading a division within a much larger company, one that is about $70 billion in revenue.”
Gerstner’s response was terse: “I understand and respect Jim’s decision,” he said in a prepared statement. “Jim has made many important contributions to Lotus and we all wish him well.”
Manzi’s resignation raised few eyebrows among those in the computer industry who know him as a strong-willed, sometimes abrasive man. In an industry that is clubby, Manzi was known as a loner.
“He probably has close friends, but they’re just not in our business,” said Dan Bricklin, considered the father of the Boston software industry. Even Lotus founder Mitch Kapor, who hired Manzi from McKinsey & Co., said the two never enjoyed a close relationship.
“I don’t think Jim Manzi could adjust to having a boss, even though he was given a great deal of latitude,” said Sam Albert, a former IBM executive who has close ties to both Manzi and IBM.
Manzi leaves Lotus a wealthy man. In early June, IBM launched a $3.3-billion hostile takeover of Lotus after Manzi had rebuffed Gerstner’s overtures for several months. The $60-per-share offer was nearly double the price at which Lotus had been trading at the time. But Manzi held out for more than a week, forcing IBM to sweeten the price to $64 per share, or $3.5 billion--and raising Manzi’s personal take to $77 million. Manzi said he has given little thought to what he will do next, but at the age of 43 it seems unlikely that he will retire.
Manzi’s legacy is decidedly mixed.
In the late 1980s, he began pulling resources away from the company’s flagship software package, Lotus 1-2-3, the PC software industry’s first smash-hit product, believing that it had peaked. Some say Manzi felt overshadowed by the more flamboyant Kapor and wanted his own hit, one that would rival 1-2-3.
PC software giant Microsoft Corp.’s success with a competing product, Excel, proved that Manzi was wrong; there was still plenty of life left in spreadsheets. Microsoft used the product to anchor its “suite,” a package that combined a handful of office productivity software programs, and it eventually became the leading supplier of both spreadsheets and suites.
But Manzi correctly recognized the importance of software that would allow PC users to communicate and collaborate. In Notes, Manzi thought he had a worthy encore to Lotus 1-2-3, and he carefully nurtured the Notes team, led by the gifted software programmer Ray Ozzie.
It was Notes that attracted the interest of IBM, which believed it could lead the way with a new generation of communications-oriented software products and eat away at the dominance of Microsoft.
But IBM must move quickly if Notes is to be successful. There are now a number of competitors with Notes-like products, and the Internet allows computer users to send electronic mail and share files.
Most expect Manzi’s departure to have relatively little impact on Lotus’ operations--unless several of the company’s creative talents, especially Ozzie, decide to follow him out the door.
“There are two things that motivate Ray [Ozzie], and that’s freedom and money,” said Heidi Sinclair, a former marketing executive with Lotus. “Jim was able to ensure that. But IBM could as well.”
IBM shares rose $1.75 to $92.50.
