As president, Jeff Papows handles Lotus' financial and operational performance and overall strategy. In this interview with Educom Review, Papows discusses how technology will change education and the future of Lotus.
Educom Review: What do you think is the most important thing that is going on right now at Lotus?
Papows: We are dealing with the convergence of three primary technologies which have a direct impact on the educational environment, as well as dramatic social and cultural ramifications. Those technologies are our advanced message systems, meaning e-mail in its more advanced forms; document-centric classes of knowledge-based applications or, as they are sometimes called, groupware or knowledge management; and thirdly, and perhaps most important, the Internet or the World Wide Web. Those three technologies are converging in a way that is dramatically changing the market for companies and institutions worldwide. That convergence carries lasting social and cultural ramifications. And it is happening at a pace and scale that is somewhat atypical for the information technology industry.
ER: Why is that?
Papows: Well, I think it's a bottom-up thing. It's a consumer-driven phenomenon - a result of this tremendous explosion in the popularity of the Internet and the World Wide Web. It's an infrastructure that's been in place for many years - it's kind of like the movie star who's labored in relative obscurity with bit parts for many years, then has one smash hit and becomes famous overnight. The Internet - this piece of ubiquitous dial tone, if you will, for the information processing industry - quietly existed for more than two decades, until it spawned the graphical interface layer we call the World Wide Web. The Web suddenly made the Internet accessible to mere mortals, millions of students and those of us in search of new productivity tools for business purposes; and that's what has created this tremendous shift. As a result, we now have some 50 million "wired" business people worldwide connected to the Internet. We predict close to 250 million wired Internet users by the end of the decade, so you are talking about astronomically enormous growth rates.
ER: Is it fair to say that Lotus, along with many other companies, was slow to understand what they had to do?
Papows: I don't think so. Remember that Lotus was the first company to field a product in both its second-generation messaging space as well as in this groupware or knowledge-management space. But, if you go back two or three years, we didn't get as much credit for pioneering those areas with Lotus Notes software as we might have, because we didn't get the word out as well as perhaps we should have. The reality, though, is that two years later, we're the undisputed market share leader. We own 52 percent of the market, which is twice Microsoft's share. By the end of this year we'll have shipped 18 million copies of that product, which is four or five times what Microsoft or any other vendor has put on the market. So, if we were slow to get credit, we certainly weren't slow to innovate or slow to react. We're benefiting now as a consequence of having been very early to that market.
ER: Let's talk about another kind of benefit. Think of Lotus as an organization that benefits from, as well as provides, technology. How has the technology that Lotus supplies actually benefited Lotus? How has it changed Lotus?
Papows: Well, we have, you know, an atypically connected culture. Lotus is a company of about 8,000 employees today. It has grown from about 5,300 two years ago, for example. We couldn't have grown at that pace without a technology like Lotus Notes, because we've grown in a very global manner basis with operations in 128 countries. And you can't have that kind of disproportionate growth in a company that basically is managing intellectual capacity as a principal mechanism for our product without having an extremely connected culture in order to cross-pollinate those ideas. We don't own a factory; we've got people. It's a very empowering culture from a sort of social standpoint, you know - people five levels down the organizational chart can have a dialogue with me or other principal parts of the management system. This not only reduces a lot of decision cycle time, but it also allows people to have a lot more reach.
ER: How many people actually do?
Papows: I get regularly 400 or 500 e-mail messages a day. In an average day, I receive 200 messages from employees. I have 12 senior vice presidents and they report to me. So I might get 40 or 50 messages from the people who report directly to me and hundreds from people who don't.
ER: And how do you deal with them?
Papows: I answer them.
ER: Do you really?
Papows: I take the time. I sit down at night - you know this is a great tool for the Class A anal-retentive among us - I sit down at night and watch the Jay Leno monologue while I respond to however many hundreds of e-mail messages I need to - even in some cases as briefly as, "Thank you for your opinion," or "Thank you for asking," or "Gee, I'm not sure; why don't you talk to your manager?" But the point is, I take the time to make sure everybody gets heard.
ER: Do you think you are typical? At your level?
Papows: I don't know, to be honest.
ER: I would be surprised.
Papows: You might be right. I think it's more typical of CEOs in my industry. But, remember, my assets walk out the door every night, and if I'm lucky they come back the next day. In them, I've got a very, very precious commodity. You know, our volunteer attrition rate as a company is under six percent and the industry norm is about 15. So there's something different about the culture here. This is probably a piece of it. You know, success doesn't hurt either. But I think it does make a difference to people.
ER: Let me ask you about training in your company. I feel certain that a fair percentage of it is traditional, classroom-based education.
Papows: Some of it is that. Some of it is what we call distance-learning, which is network-enabled, self-paced materials. But something on the order of about three weeks of training are directed at every employee annually, particularly in the engineering ranks. I'm just talking about company training. That doesn't speak to the advanced degrees and the other things we do to sponsor people's professional development, but in terms of what goes on in the way of company-organized training, it's about three weeks per year per employee, on average, of formal classroom time.
ER: Well, let's go out a few years, as many years as you care to, something short of 100. Let's say 10.
Papows: If I could go out more than three years in our business, I'd be prophetic.
ER: Okay, go out three and then go out 10. What is really going to be different about education in three years because of this technology?
Papows: For one, our quaint little definitions of a campus and the institutional organizational structures of the universities and higher education are clearly going to change. I'm on the Board of Trustees of my own undergraduate alma mater, as an example. And I can tell you, they are dealing with a lot of complexity. Norwich University is a military college like the Citadel or West Point. And, as a consequence, their connection to those alumni has got to be somewhat virtual, because they are spread all over the world. A lot are in the armed services or whatever. But other even more traditional institutions are seeing a significant percentage of their revenues coming from off-shore connections to what they call virtual campuses. And that's done through Lotus Notes and electronic communications technologies where they are creating virtual connections between faculty in different places and students in different places. I think, given the pace of lifestyles and the rapid sort of world that we are growing accustomed to living in, professionals are going to want to continue their education experiences. They will not be able to do that in the traditional classroom or even the traditional geography, because people today are much more mobile. So, if you look even three years out, I think you're going to see a much higher percentage of degrees sought, earned and awarded through that kind of virtual campus extension. If you look 10 years out, not only will that be a larger percentage, I would argue a majority. Certainly much of the research and whatnot will move out of the stacks and beautiful ivy-covered libraries to be in dorm rooms and homes via computers and modems. It may not be as aesthetically pleasing, but it's a lot richer. And that's becoming true today. All the people I talk to in higher education are enormously concerned with research and the accessibility of information, so it's going to happen at a rate that's much faster than any of us would be comfortable ascribing to now.
ER: As the world changes along the lines you suggest, how is Lotus positioning itself?
Papows: Well, we've got two issues. One, we've got a great technological solution, not just a product, which is a distance-learning medium or container with built-in tools to allow students to collaborate, i.e., Lotus Notes/Domino and LearningSpace. We are beginning to see many schools adopt LearningSpace so professors can spend their energies focused on developing content, not figuring out how to build Web pages. We are also advantaged by having other education content providers fill that container. So we are working with a lot of other organizations for that reason.
Secondly, we're a big employer, not just Lotus but IBM, our parent organization, which has about 240,000 employees. We sell our products at very low prices for two reasons. Schools can improve their business processes to deal with the rapid change we see today and we build brand awareness and loyalty with students and faculty. And we want to get students attracted to us that have some reasonable degree of acumen. This year, we have made LearningSpace available at no charge to more than 700,000 students at universities and graduate schools who have purchased the Total Campus Option. The reason for that, obviously, is to have people going into the work force with a Lotus brand preference and relevant skills. So, for us, the campus is the starting point of the sales cycle to the corporate world with whom we ultimately conduct business.
ER: I was interested in what you think of the graduates of colleges and universities who come to Lotus and other companies nowadays. There's a hue and cry about the educational system not being effective.
Papows: I personally haven't seen it. You know, we hire hundreds of college graduates every year. It's very competitive, so maybe we are getting the cream of the crop in some respects. But we've had enormous success in mentoring the students we are getting from both undergraduate and graduate schools, many of whom have gone on to become very senior managers, who started with us right off the college campuses and six or seven years later are running large organizations. And we've seen good acumen and work ethics displayed by the liberal arts graduates, by the computer science and the marketing and business graduates. It's not like we see the liberal arts schools producing one caliber of graduates and somebody else another. You can't label things that generically. I think there are under-performers and over-performers in anything And if you're careful to take the time to line up expectations and then do the homework - I frankly haven't seen a problem. And I'm not only an employer. I go out and talk to universities and I've done some commencement speeches. I've talked to faculty. I sit on the Board of Trustees of another university. I'm not seeing any decline in the work product.
Let me turn the question around. To the degree that companies are not meeting their expectations or seeing success with the graduates they are getting off the college campuses, what are they doing to mentor them? If you think that you're going to take a young man or a young woman off a college campus and just throw them in front of a terminal and plant them there and get something of value, you know, you are not making the investments necessary to make that particular tree bear fruit. And, boy, I tell you, I haven't seen it. Some of my most exciting evenings are going over and talking to inbound classes, new hires, Management 101 training for second-year employees and what not, and I haven't seen any flaws in the system that are obvious to me.
ER: Treat me as a man from Mars, which is fairly accurate, because I must confess I've never seen a genuine demonstration of Lotus Notes. So I've just come in from Mars and you've got to tell me what it is and why it's good and why I need it.
Papows: Okay. I'll give you the simplest definition. This is a technology which allows you to communicate with your organization or outside your organization to your partners in your network, suppliers and customers irrespective of the boundaries of time and space, with the same level of fidelity and richness of information-sharing you could face-to-face. Whether you are doing that sitting at a computer in your office or in an airplane or in a hotel, it's as rich an experience mobilely as it is in a static environment.
ER: Compare and contrast it to e-mail.
Papows: E-mail is sort of 15 percent of it. So, yes, I've got e-mail, but I've got e-mail I can use as I travel. I've got e-mail that can embody a whole set of applications, and I've got e-mail that can connect me dynamically to the Internet. So e-mail is sort of the tail wagging the dog, in some respects.
ER: Tell us Martians about the other 85 percent.
Papows: Well, I've got a set of object services that provide you with a platform to share information that transcends all the complexities of operating systems and network protocol stacks and development languages - all of which, as a Martian just using the stuff, you don't know anything about, you probably don't want to know anything about. But what's very special about that is if I have you using a student portfolio application or a sales force automation tool that happens to have been built and resides in Lotus Notes, when you're sending information to somebody on Venus who uses a different language and a different computing platform, it's going to get through and look exactly as relevant to that person on Venus as it is to that person on Mars or Pluto or some place else.
In other words, it takes all of the complexities out of a hodge-podge of disparate computing technologies today and renders them seamless, so you've got a consistent face for this range of services - from e-mail, from specific application variants, to Internet pages, and there isn't another product from Microsoft or anybody else, (because there are obviously built-in biases) that allows you that universal experience irrespective of computing platform.
ER: Let's stick with that 10 years out question. What would you expect it to do 10 years from now that it's not doing now? Or three years, whatever?
Papows: Well, I think the principal difference is that bandwidth pipes, if you will, between the connections will get wider, faster and richer so we'll be able to dispense information at even greater speeds, with even richer objects. Today we regularly send video and audio - sound as well as text and graphics. Ten years from now you'll be able to do that at even smaller expense and even more rapid rate. You know the hourglass in Microsoft Windows - have you ever seen that? It appears when you hit the Enter key and then wait for something. There'll be no hourglass, because the principal difference between 10 years and today - and really the only difference - will be the increased capacity of the data pipes. It will be the infrastructure, because there's really nothing you'd want to do ten years from now, that you don't have the basic or inherent capability to do today functionally.
ER: Let me ask you whether you think the technology is essentially an enhancement or is it getting to the point where it will be a replacement for existing kinds of communication and learning? At some point will the richness be sufficient to actually replace, let's say, ordinary classroom learning to a large extent?
Papows: I don't think it will ever replace it. But you know, garbage in, garbage out. What you've got is a wonderful container for sharing institutional knowledge. You take passive knowledge and institutionalize it and share it. So the usefulness of that educational experience will never be more or less meaningful than the quality of the intellectual content that goes in. The difference is, it's a wonderful extender of that acumen, because it transcends the boundaries of time and space or culture. I had a conversation, as an example, with the Deputy Prime Minister of Malaysia several months ago. He was a student activist who was in prison for seven years - tremendous social conscience, brilliant man, passionately committed to his people, who is sitting on top of a very modern, but enormously diverse area geographically, culturally and ethnically. We talked about distance learning as a way of breaking down the class structures and the social hierarchies, because of the accessibility of the same quality of information on a country-wide or region-wide basis. So it's an enabler or extender of the richness of the educational experience, and it's an enabler that makes it ubiquitously available irrespective of cultural diversity. Today, frankly, not everybody can afford to go to MIT or Harvard. That's not to say that there are not lots of students in the cities today, in different parts of the country, or different parts of the world, who haven't got the acumen or the intellect to benefit. This provides that capacity.
ER: But think of it in terms of the railroad or the airplane. The airplane didn't replace ground transportation, but it did somewhat, with a lot of footnotes, replace the railroad.
Papows: Well, this is a similar thing. You're right. Air transportation didn't replace ground travel, but it certainly collapsed the time frames and made the world a smaller place. This is no different in some respects than your analogy to air travel. We now have a sophisticated enough device at either end of the wire, and the ubiquity of information accessible from the wire - meaning the Internet - to make the world an equally small place. Whether I'm a student in Singapore, Mountain View, California or Cambridge, Massachusetts, I can access the same institutional knowledge in Copenhagen, irrespective of race, gender or socioeconomic status. That's the power of it. It's no different than the telephone. When a few select people have it, the cost is absurd. The same thing with television or broadcast. It's the ubiquity that's really driving the power. And that ubiquity requires you to think in different terms about user interface design, usability and the power of the machine, because it does no good to simply build an increasingly complex mousetrap if nobody can use it.
I think we have that knowledge now. We have that learning. We have the ability to merge multiple media types like video and sound and graphics, multiple kinds of objects, and make them available, so that the remaining challenge is to harness the intellectual imagination and place that content in the network. Notes is a vehicle for that.
ER: Is there anything you worry about?
Papows: Sure there is. This is a competitively fragmented market. I made the point that we now have twice the market share of Microsoft, but, you know, there are lots of companies that have been there before and have been eclipsed by them, so we are not about to get complacent. I worry about our ability to generate the infrastructure on a global basis to keep pace with the rate of growth. We have to train 1.8 million students - train and certify; we actually have to test them this year in order to have the corporate and business skills in the marketplace to deal with consulting, support and design. Those are obviously not our employees. That's 1.8 million people in the corporate world. That's a massive training and education requirement. Lotus is a huge university in its own right. Now we do that through a network of authorized education centers and partners, some 600 strong, where we leverage a lot of the technology. So we are a living example of a lot of what I've described. But the thought of training almost two million people every year is pretty daunting.
ER: Let me go back to all those e-mail messages or Notes messages you get from your own employees at different levels. Characterize them. I mean not the ones from the vice presidents but the ones from the people.
Papows: Some of it I would characterize as market intelligence. It's a sales rep in England or a sales rep in Sao Paulo, Brazil saying, "I'm running into this competitive information vis-a-vis Microsoft and it seems to have changed in a predictable way in the last couple of weeks, and I want to make sure you are aware," which is a wonderful thing, because my own learning is enormously enhanced because of that kind of reach. That's 15 or 20 percent of it. Some of it is more direct: "Gee, I've got this idea about the company and I'd like to see us head more aggressively in this direction; I don't think we're getting the message across and here's my idea." It's sort of a big electronic suggestion box. And a big chunk of it is human resources issues, the complexities of managing tens of thousands of people. You know, "I've been passed over for promotion and I've spent 10 years in the company, and I'd like you to be aware." Some of it gets a little out of the management hierarchy, but that's okay at times. Some of it's just, "Gee, you know, you spoke in Tokyo last week and we got an enormously positive reaction from customers and I closed three deals as a consequence. We'd love to have you back in February and thank you very much."
ER: If any of our readers who read this interview send you e-mail, will you answer them?
Papows: Yes. My address is jeff_papows@lotus.com, So you can try out my theory. Or if readers have questions about our academic solutions, they can e-mail us at academic@lotus.com.
ER: Are there any other points that you would like to make?
Papows: Well, I guess this is sort of obvious in some respects, but to the degree that this is going to be consumed by educators and students - from where I sit, this is one of the most incredibly exciting and riveting times that we've ever experienced professionally. You know, there are profound changes in the way people work. We go through different decades in our professional development: there've been times when we've been focused on different things - automating office tasks or the explosion of the personal computer and all the things that brought about. This network-centric phase is virtual enterprise. It's about a fundamental change in humanity. This is about changing the way civilization works and interacts. If there are educators and students out there who are as excited about the notions of change in those kinds of global social and economic proportions, this is a wonderful place for them to be involved. We are always reaching out for smart people.