Lotus started life with the first major spread-sheet product, 1-2-3. As Microsoft tightened the squeeze on the PC software industry by buying up competitive products (Word, Excel, PowerPoint, etc.) and selling them as one package, Lotus saw the writing on the wall and they also bought other products (Amipro, Freelance, etc.) and created Lotus Smart Suite. They failed to compete with Microsoft and like the rest of the PC software industry could have gradually faded away. However, unlike the rest, they made a very astute investment before the axe fell and took over one of the start-ups they had sponsored, acquiring the Notes product, and securing their future. Microsoft missed the capabilities of Notes and never succeeded in filling the gap with a competing product, although they have been very successful with Exchange in later years.
There is a big difference between Exchange and Notes. Notes is based on a text database while Exchange is file based. As a result Notes is a true peer-to-peer cooperative system as opposed to Exchange, which as its name implies is basically a post box system, a fundamental advantage that in my experience the Lotus sales force simply fails to get over to customers. However Lotus were in luck when the Internet came to the fore, because they could relatively easily adapt Notes to handle the HTML requirements of the Web, resulting in the current version, now called Domino. To compete Microsoft have to offer multiple products such as Exchange and IIS, instead of the one integrated one. Lotus, like Microsoft, lived in the Wintel camp, but now with IBM's backing, Notes/Domino has been ported to other platforms, notably mainframes, AS/400 and Unix, opening the door for Linux. Domino supports Web browser user interfaces, but many of the more powerful applications still depend upon Windows clients, even with a mainframe server.
But the Internet bandwagon has rolled on and IBM's core business has been one of the major beneficiaries. Quite apart from the increase in sales of "big iron", IBM have successfully adapted the major software products such as DB2, CICS, MQSeries and Tivoli to deal with the needs of e-commerce. They have not been slow in pushing the capabilities of Domino either, but even more important they have exploited the Java revolution and with WebSphere are now vying to be the leading vendor of Application Server software.
Now that Lotus Domino has become an important element in the corporate IBM plan for e- commerce, the separate identity of Lotus is going to become a bit of a problem. On one hand Lotus sell a lot of Notes seats to non-IBM customers, simply because they are typically front- office users in large corporations, who are using Microsoft Office and need something better than Exchange. They often don't have any other IBM products. But now that IBM is favouring dominance of the Enterprise Integration market, then many Domino customers need to access DB2 data and much tighter integration with WebSphere. These features IBM and Lotus have promised will be in the new release of Domino, but they won't be of much interest to the other users. Of more interest to them are features for open integration with other e-commerce type systems other than IBM's.
At the present there is a lot of overlap in the functionality of Domino and WebSphere, particularly in the handling of HTML pages. If they refine Domino and integrate its best features into the core IBM products, then this means removing features which non-IBM users favour. In other words there appears to be a growing need for two Lotus products, one a stand-alone Domino and the other an option for WebSphere users. This is going to make the situation of whether or not Lotus becomes absorbed into IBM even more difficult to resolve!