TrePium Technologies

Former Lotus Chief Jim Manzi is a "wise guy."

The former Lotus chief, who's an Italian-American, has long cited "The Godfather" as his favorite movie, including Parts I and II. With apologies to Francis Ford Coppola, no one,Manzi included,seriously considers Part III an option. Manzi is also a wise guy in the Bugs Bunny sense, but more on that later.

In a video clip for his induction into the 2003 CRN Industry Hall of Fame, Manzi re-enacted the "Godfather" scene where Don Vito Corleone and Sollozzo discuss business opportunities. And Manzi more than held his own with the celluloid Sollozzo. At one point, Manzi says, in a Brando-like whisper, "So let me get this straight. I give you a million dollars and you give me $4 million? For applications? I thought you only make that kind of money with operating systems."

And the key question: "What is the interest of the company in the Northwest?"

That "company in the Northwest" was a huge thing for Manzi and virtually every other software CEO in what is now deemed as PC software's golden age. It was a time marked by a booming market for productivity applications, word processors, databases, spreadsheets and other software from more than just that one company in the Northwest. WordPerfect led in word processors, Lotus in spreadsheets, Software Publishing Corp. in presentation graphics and Ashton-Tate in databases.

When Manzi came into Lotus in 1982 and became an employee a year later, Lotus 1-2-3 was still king of the spreadsheet arena. But the writing was on the wall that Microsoft had its own ideas about spreadsheets, not to mention word processors and databases. And it was Manzi who steered Lotus away from stand-alone desktop applications into the uncharted territory of collaborative software or "groupware." It wasn't an easy sell, even within the company. In fact, after unsuccessfully trying to persuade his executive staff to buy into Notes, Manzi ended up bringing in his own team to get the job done, said Bob Weiler, one of Manzi's recruits and now CEO of Phase Forward, a Waltham, Mass.-based developer of data management solutions.

There were mixed results. Lotus backed the OS/2 operating system co-developed by IBM and Microsoft. When Microsoft and IBM went their own ways, Manzi followed IBM's lead. Subsequently, Microsoft kept plugging Excel, which ended up unseating Lotus 1-2-3 as PC spreadsheet kingpin. Manzi said it was clear that Microsoft would own the desktop business because of the Windows OS and its control of the Windows interfaces. OS/2 support was an attempted end-run around that, but it ended badly.

Still, Manzi's decision to go with and stick with Notes is his claim to fame. Notes was a collaborative application well before anyone other than the Notes team, led by Ray Ozzie, really knew what that was. It was a huge risk at the time. But Microsoft didn't get it, and it gave Lotus somewhere to go.

According to Manzi, the decision to pursue Notes was easy,at first. "From 1985 through 1988, it was a no-brainer because it cost us nothing," he told CRN. Once the Lotus 1-2-3 dollars began to dry up, though, Lotus was pressed to cut costs, and the company's old guard looked askance at Notes. After all, Lotus 1-2-3 was still selling, just not as fast, while Notes was making zero money for Lotus.

Ozzie, now chairman of collaborative software vendor Groove Networks, Beverly, Mass., remembered that in the Lotus 1-2-3 Release 3 time frame, Lotus "was forced to do layoffs across a number of areas to reduce expenses, yet investment in Notes continued and even grew in this same era."

Manzi, who entered the business as a consultant, often didn't get the respect that industry types typically afford techies. But even critics agree that it was Manzi who stuck with Notes through thick and thin. Many industry observers note that it has taken mighty Microsoft years to catch up with Notes, and some argue that the Redmond, Wash.-based software giant still hasn't done so.

It's easy to forget how big a gamble Notes was at the time, and Ozzie said Manzi's commitment was unequivocal. "It required strength from a management perspective to know how to deal with an organization so that it could transition from a desktop/retail world into an enterprise world," Ozzie said.

Manzi also recalls those tough times. "In '89 to '91, we were losing an enormous amount of money and knew at some level that this would be a very long haul," he said. "[Lotus had the opportunity] to do something very new, very different." Yet shifting resources and margin from desktop applications to this "speculative Notes effort" involved "a lot of agony," Manzi added.

Richard Eckel, who ran communications for Lotus and is now vice president of marketing communications at Groove, said Lotus' migration away from shrink-wrapped software products was difficult. "What Manzi did was re-engineer Lotus for the future while it was a public company. It was like changing the wheels of a car while it was going 60 miles per hour," Eckel said.

And that transition wasn't just technical; the sales process had to change. "In the early days, [Lotus] was geared for selling shrink-wrapped product through the channel. But Notes was selling to CEOs and CIOs. It was a strategic, consultative sell," Eckel said. "Jim once said it was like the difference between selling pots and pans and selling appliances."

The fact that Manzi didn't drop Notes in such an environment seems amazing now, especially since the ramp-up for the product was long. Ozzie, who started Iris Associates as a semi-independent entity within Lotus, agreed. "It took several years, until around 1994, for anyone to really be sure that the Notes business would scale," he said.

But now back to Bugs Bunny. No tale of Manzi is complete without a recounting of his wisecracks. The man who succeeded legendary Lotus founder Mitchell Kapor and became chairman, CEO and president within a few years is quick-witted and not one to let many things pass without a quiet comment. Some of it is schoolyard stuff. Most of it is pretty darn funny.

Manzi used to talk about one hefty executive from a rival company and his real (or imagined) penchant for doughnuts. Manzi also was famous for his rivalries,verging on the personal,with other software moguls, including Borland International's Philippe Kahn and Microsoft's Bill Gates, Steve Ballmer and Mike Maples.

At one CRN Comdex party years ago, Manzi literally hit the floor when Kahn entered the bar, making an elaborate show of not wanting to be seen in the same room. Standing back up a moment later, Manzi hiked up an imaginary gun belt and muttered, "This place ain't big enough for the both of us."

Weiler remembers trying to broker an alliance between Sun Microsystems and Lotus. He thought a golf game might help, even though Sun Chairman Scott McNealy was a scratch golfer and Manzi was a novice. "Jim and Scott had never quite bonded. Scott had to catch a plane," Weiler said. "The 13th hole is a very large, undulating green, a tough shot. Jim had a 30-foot putt to make,very difficult, up and down a hill. And he nailed it! McNealy was aghast. As they walked off the green, Jim said, 'So, let's talk about Notes running on Sun.' And Scott said, 'OK, let's get this done.' " And it was done.

Manzi discounts the story a bit. He denies that the deal was clinched on the links but admits, "I did sink a ridiculous putt."

When IBM launched its hostile bid for Lotus in the spring of 1995, there was little Manzi could do. He clearly didn't want to sell, even though the $60-per-share tender offer was a big premium on Lotus stock, which was trading at $32 at the time. After evaluating potential white knights and forcing IBM to hike its bid to $64.50 per share, for a whopping $3.5 billion, he succumbed. The shareholders, if not Manzi, were happy.

Weiler recalled he and Manzi sitting in their empty offices that October 1995 day, a few months after the sale. "We said, 'Well, I guess it's time to go.' And we walked out together."

Manzi, 51, is now chairman of Interwise, a Cambridge, Mass.-based Web conferencing and e-learning company, and Fresh Direct, a New York-area online grocery service.

The former Lotus chief, who's an Italian-American, has long cited "The Godfather" as his favorite movie, including Parts I and II. With apologies to Francis Ford Coppola, no one,Manzi included,seriously considers Part III an option. Manzi is also a wise guy in the Bugs Bunny sense, but more on that later.

In a video clip for his induction into the 2003 CRN Industry Hall of Fame, Manzi re-enacted the "Godfather" scene where Don Vito Corleone and Sollozzo discuss business opportunities. And Manzi more than held his own with the celluloid Sollozzo. At one point, Manzi says, in a Brando-like whisper, "So let me get this straight. I give you a million dollars and you give me $4 million? For applications? I thought you only make that kind of money with operating systems."

And the key question: "What is the interest of the company in the Northwest?"

That "company in the Northwest" was a huge thing for Manzi and virtually every other software CEO in what is now deemed as PC software's golden age. It was a time marked by a booming market for productivity applications, word processors, databases, spreadsheets and other software from more than just that one company in the Northwest. WordPerfect led in word processors, Lotus in spreadsheets, Software Publishing Corp. in presentation graphics and Ashton-Tate in databases.

When Manzi came into Lotus in 1982 and became an employee a year later, Lotus 1-2-3 was still king of the spreadsheet arena. But the writing was on the wall that Microsoft had its own ideas about spreadsheets, not to mention word processors and databases. And it was Manzi who steered Lotus away from stand-alone desktop applications into the uncharted territory of collaborative software or "groupware." It wasn't an easy sell, even within the company. In fact, after unsuccessfully trying to persuade his executive staff to buy into Notes, Manzi ended up bringing in his own team to get the job done, said Bob Weiler, one of Manzi's recruits and now CEO of Phase Forward, a Waltham, Mass.-based developer of data management solutions.

There were mixed results. Lotus backed the OS/2 operating system co-developed by IBM and Microsoft. When Microsoft and IBM went their own ways, Manzi followed IBM's lead. Subsequently, Microsoft kept plugging Excel, which ended up unseating Lotus 1-2-3 as PC spreadsheet kingpin. Manzi said it was clear that Microsoft would own the desktop business because of the Windows OS and its control of the Windows interfaces. OS/2 support was an attempted end-run around that, but it ended badly.

Still, Manzi's decision to go with and stick with Notes is his claim to fame. Notes was a collaborative application well before anyone other than the Notes team, led by Ray Ozzie, really knew what that was. It was a huge risk at the time. But Microsoft didn't get it, and it gave Lotus somewhere to go.

According to Manzi, the decision to pursue Notes was easy,at first. "From 1985 through 1988, it was a no-brainer because it cost us nothing," he told CRN. Once the Lotus 1-2-3 dollars began to dry up, though, Lotus was pressed to cut costs, and the company's old guard looked askance at Notes. After all, Lotus 1-2-3 was still selling, just not as fast, while Notes was making zero money for Lotus.

Ozzie, now chairman of collaborative software vendor Groove Networks, Beverly, Mass., remembered that in the Lotus 1-2-3 Release 3 time frame, Lotus "was forced to do layoffs across a number of areas to reduce expenses, yet investment in Notes continued and even grew in this same era."

Manzi, who entered the business as a consultant, often didn't get the respect that industry types typically afford techies. But even critics agree that it was Manzi who stuck with Notes through thick and thin. Many industry observers note that it has taken mighty Microsoft years to catch up with Notes, and some argue that the Redmond, Wash.-based software giant still hasn't done so.

It's easy to forget how big a gamble Notes was at the time, and Ozzie said Manzi's commitment was unequivocal. "It required strength from a management perspective to know how to deal with an organization so that it could transition from a desktop/retail world into an enterprise world," Ozzie said.

Manzi also recalls those tough times. "In '89 to '91, we were losing an enormous amount of money and knew at some level that this would be a very long haul," he said. "[Lotus had the opportunity] to do something very new, very different." Yet shifting resources and margin from desktop applications to this "speculative Notes effort" involved "a lot of agony," Manzi added.

Richard Eckel, who ran communications for Lotus and is now vice president of marketing communications at Groove, said Lotus' migration away from shrink-wrapped software products was difficult. "What Manzi did was re-engineer Lotus for the future while it was a public company. It was like changing the wheels of a car while it was going 60 miles per hour," Eckel said.

And that transition wasn't just technical; the sales process had to change. "In the early days, [Lotus] was geared for selling shrink-wrapped product through the channel. But Notes was selling to CEOs and CIOs. It was a strategic, consultative sell," Eckel said. "Jim once said it was like the difference between selling pots and pans and selling appliances."

The fact that Manzi didn't drop Notes in such an environment seems amazing now, especially since the ramp-up for the product was long. Ozzie, who started Iris Associates as a semi-independent entity within Lotus, agreed. "It took several years, until around 1994, for anyone to really be sure that the Notes business would scale," he said.

But now back to Bugs Bunny. No tale of Manzi is complete without a recounting of his wisecracks. The man who succeeded legendary Lotus founder Mitchell Kapor and became chairman, CEO and president within a few years is quick-witted and not one to let many things pass without a quiet comment. Some of it is schoolyard stuff. Most of it is pretty darn funny.

Manzi used to talk about one hefty executive from a rival company and his real (or imagined) penchant for doughnuts. Manzi also was famous for his rivalries,verging on the personal,with other software moguls, including Borland International's Philippe Kahn and Microsoft's Bill Gates, Steve Ballmer and Mike Maples.

At one CRN Comdex party years ago, Manzi literally hit the floor when Kahn entered the bar, making an elaborate show of not wanting to be seen in the same room. Standing back up a moment later, Manzi hiked up an imaginary gun belt and muttered, "This place ain't big enough for the both of us."

Weiler remembers trying to broker an alliance between Sun Microsystems and Lotus. He thought a golf game might help, even though Sun Chairman Scott McNealy was a scratch golfer and Manzi was a novice. "Jim and Scott had never quite bonded. Scott had to catch a plane," Weiler said. "The 13th hole is a very large, undulating green, a tough shot. Jim had a 30-foot putt to make,very difficult, up and down a hill. And he nailed it! McNealy was aghast. As they walked off the green, Jim said, 'So, let's talk about Notes running on Sun.' And Scott said, 'OK, let's get this done.' " And it was done.

Manzi discounts the story a bit. He denies that the deal was clinched on the links but admits, "I did sink a ridiculous putt."

When IBM launched its hostile bid for Lotus in the spring of 1995, there was little Manzi could do. He clearly didn't want to sell, even though the $60-per-share tender offer was a big premium on Lotus stock, which was trading at $32 at the time. After evaluating potential white knights and forcing IBM to hike its bid to $64.50 per share, for a whopping $3.5 billion, he succumbed. The shareholders, if not Manzi, were happy.

Weiler recalled he and Manzi sitting in their empty offices that October 1995 day, a few months after the sale. "We said, 'Well, I guess it's time to go.' And we walked out together."

Manzi, 51, is now chairman of Interwise, a Cambridge, Mass.-based Web conferencing and e-learning company, and Fresh Direct, a New York-area online grocery service.

Written by or Source from : - Dec 2003

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