IBM's Bid for Lotus Development Corp.: A Critical Acquisition for the Software Industry

IBM's ambitious bid for Lotus Development Corp. at $60 per share has sent shockwaves throughout the software industry, potentially altering the competitive landscape forever. The acquisition, which involves IBM compelling Lotus' board of directors to redeem the poison pill, marks a significant move by the technology giant to expand its presence at the desktop and influence significant IS purchase decisions. With Lotus' innovative products, particularly Lotus Notes, the deal promises to unlock new growth curves for IBM's software revenues.

Key Takeaways:

• IBM is acquiring Lotus Development Corp. for $60 per share, a move that could change the competitive landscape of the software industry.
• The acquisition will grant IBM presence at the desktop, a crucial asset in the industry, allowing it to influence significant IS purchase decisions.
• Lotus Notes, a product that has been praised for its market-defining software, will provide IBM with a much-needed distributed computing and working environment for the Fortune 500.
• The deal will likely increase competition in the systems arena, forcing Microsoft to respond.
• Jim Manzi, Lotus' CEO, is a uniquely gifted individual who deserves praise for competing with Microsoft on their terms.
• The acquisition will create a level playing field in the software industry, a goal that the Justice Department has lacked the resources to achieve.
• The price tag of $2.22 billion may seem expensive, but the value of Lotus' products and management independence will need to be maintained for consumers and shareholders to benefit from the purchase.

Statistics:

• The acquisition price is $60 per share, totalling $2.22 billion.
• IBM will gain control of 32-bit versions of Lotus' personal productivity applications.
• Lotus Notes is the market-defining software product of the 90's.
• The Fortune 500 will benefit from the distributed computing and working environment provided by Lotus Notes.
• The program will grant IBM huge quantities of Lotus Notes to be sold to its large customers.

Sources:

• International Data Corporation Analyst Scott C. McCready
• The Wall Street Journal (not explicitly mentioned, inferred from the content)
• Lotus Development Corp.
• Microsoft Corporation
• Fortune 500 companies
• Justice Department
• AT&T
• Novell Corporation
• Jim Manzi (Lotus CEO)