ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 10, 1996 TAG: 9610100068
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: LAKE BUENA VISTA, FLA.
SOURCE: Associated Press
Seeking to soothe worried computer customers, IBM's top executives told corporate managers Wednesday that the world's largest computer company will stick with Lotus Notes even though the software is not making money.
IBM Corp. chief executive Louis Gerstner, speaking from an industry panel that included four other top IBM managers, said that he wasn't ``worried one bit'' his company would forsake the popular spreadsheet for other software IBM is selling.
The reassurances, at an annual conference sponsored by the Gartner Group information technology consulting company, were IBM's strongest to date that companies are not wasting their time and money by continuing to develop systems that rely on Notes.
More broadly, the strengthened commitment further steers IBM away from a longtime strategy of primarily supporting computer products with a strong ability to turn a profit.
When IBM bought Lotus for about $3 billion a year ago, a key reason was to develop Notes as a software for businesses seeking to develop companywide computer networks, similar to the Internet's World Wide Web.
But since then Lotus has come under pressure as analysts and customers realized that some key Notes functions could be performed with less expensive software for finding and publishing information on the Web.
Notes lets employees collaborate on documents and projects through computer networks. Its distinguishing feature is the ability to update, or replicate, new information so the proper people receive it.
Part of IBM's push into so-called corporate ``intranets'' includes making features of Notes available to anyone who uses the global data network to produce or share information.
An analyst on the panel, his voice rising in a challenge to IBM, declared that IBM's giveaway has filled business technology managers with ``primal fear'' that ``Lotus will go broke with everyone using browsers'' to download free software.
Following the panel discussion, Tom Austin, the Gartner Group analyst who posed the query, said he thought IBM seemed to have stepped up its commitment to Lotus Notes.
``The message we just got here is that it's very clear the Notes division is strategic, it's not just a tactic'' for IBM to get a foot in the door of Internet-related software, Austin said.
``They are not going to kill the goose that laid the golden egg,'' he said.
In opening comments to the audience of about 5,000 technology managers, the head of IBM took a well-aimed swipe at his powerful counterpart in technology, Microsoft Corp. chairman Bill Gates.
Gerstner said that the U.S. high-technology industry should create the means for using software across a range of computer operating systems, not just the Microsoft Windows system that is used in 85 percent of personal computers.
``But there is still at least one player who doesn't like that set of outcomes,'' Gerstner said, in an obvious reference to Gates that drew enthusiastic applause from the audience.
Microsoft has been accused of abusing its position as the biggest supplier of operating system software, and of violating a 1994 consent decree with the Justice Department.
In a 1994 agreement with the government, Microsoft admitted no wrongdoing in its marketing practices but agreed not to use its dominance in operating systems to gain an advantage over rivals in other sectors of the computer industry.
IBM's concern may not be completely altruistic. It has invested heavily in software that allows IBM's incompatible computer lines to work together - and with other computer brands - on networks, including the Internet.
LENGTH: Medium: 74 linesby CNB