Published on VentureBeat
When IBM bought Lotus for $3.5 billion in 1995, it looked as though the venerable computing giant was just about to lock up the software industry and coast to unstoppable profits.
Eighteen years later, Lotus looks more like a millstone around IBM’s neck than a flywheel giving it extra speed.
According to a report in the Wall Street Journal, in advance of IBM’s Q4 earnings release today, Lotus was the weakest performer in IBM’s software portfolio, shedding 6.4 percent of its sales volume in the first nine months of 2012.
It probably accounts for about $1 billion in annual revenue, according to estimates sourced by the WSJ, or one-sixth to one-fifth of IBM’s overall software business.
Ironically, Lotus once led the way toward today’s hottest enterprise technologies, the collaborative software that helps teams communicate and work together on projects. One of the success stories of that niche is Yammer, which Microsoft acquired last year for $1.2 billion. So, why is IBM sitting at the back of the pack instead of leading from the front?