Gates: How Lotus boss helped MS inside IBM

Bill Gates' video testimony earlier this week included a reference to a Gates email which appeared to suggest Lotus boss Jeff Papows was engaged in some form of secret negotiations with Microsoft. (Earlier Story) The email in question, which the DoJ has now released, confirms this. Gates was writing to executives, including Steve Balmer, Joachim Kempin, Brad Chase and Paul Maritz, after a meeting with Lotus on the subject of "working with us on Windows initiatives." As we suspected, the discussion with Papows had revolved around Lotus' and IBM's relationship with Netscape. The email is dated 15th August 1997, just after Lotus had agreed to integrate IE more thoroughly with Notes. "At the end of the meeting Jeff Papows met with me in my office to explain some things going on between IBM and Lotus," wrote Gates. Papows seems to have been very informative. "Someone at IBM likes the idea of getting Netscape Java VMs out into the world. However when Communicator came bundled Lotus told IBM they should stop doing anything with Netscape clients. IBM went to Netscape with an ultimatum to unbundle." That's a fair summary of the state of play in summer 1997. Netscape had launched Communicator and was trying to pitch it as an integrated Web and mail package, and didn't want companies to take just Navigator any more. Lotus fell out with Netscape over this, and although IBM sabre-rattling had secured a Netscape promise to unbundle, the damage had been done. "Netscape hated to unbundle because they think it screws up their business model somehow [we wonder how?]" said Gates. And then he moves on to his dealings with Papows. "Lotus agreed to lobby Thompson [John Thompson, IBM's software chief] to let Charles Fitzgerald come out and present to a group about Java and describe what works and what doesn't and how the Java middleware OS isn't in IBM's interest." But although Papows seems to be in the Microsoft camp within IBM, there are rivals. "Papows feels there is a decision being made right now at IBM which will be concluded by early next week about what the PC Company does with Netscape. "He doesn't want anything attributed to me or he will get into trouble but he says he can just refer to all the rumours on the Web about what kind of deal is being done between Netscape and IBM." But it would appear that Papows wants it stopped, and has decided, whether or not his fellow IBM employees agree, that Microsoft has the winning formula. "Papows believes our strategy of integrating with the operating system will be the winner and he is having Lotus do a lot to integrate their products with IE. However he thinks we may be about to suffer a major blow from IBM and that we need to get on the phone to the PC company." Gates signs off with the thought that as Joachim Kempin, Microsoft OEM boss and the man with the interesting turn of phrase (Microsoft's 'hit team' to get IBM into line), is on sabbatical, Steve Ballmer will have to be the one to make this call. Pressure via the OEM relationship, anyone?