Once seen as the PC operating system that would eventually replace DOS, OS/2 was co-developed by IBM and Microsoft Corp. in the 1980s. But Microsoft eventually cast its lot behind Windows, and IBM never became as successful selling OS/2 to corporations, or the consumer version, Warp, to consumers. "The OS/2 group from PSP (the Personal Software Products division) will remain and will continue to promote and enhance Workspace On Demand [WOD] and OS/2 LAN Server as well as to support Warp," said an official with a partner close to IBM, who requested anonymity. "It does pretty much signal the end of feature development for the Warp desktop OS." Another developer characterized the reorganization, which went into effect Nov. 14, as "PSP closing its doors." PSP was the Austin, Texas-based group charged with developing, marketing, and maintaining OS/2 in all its forms. "PSP no longer exists," acknowledged an IBM spokesman. "But neither does Networking Software. The people who were part of PSP are now part of something bigger. We're now a piece of IBM's software strategy in the Java space." The IBM spokesman added that IBM had already stated that it did not plan to continue to enhance OS/2 as a consumer desktop. Instead, Workspace on Demand will be the preferred client and Warp Server will be IBM's server operating system, he said. A new version of Warp Server is on target for delivery at the end of 1998, he said. On Nov. 14, IBM created the Network Computing Software Division, headed by Mike Lawrie, former head of PSP, which absorbed all of the approximately 1,000 PSP employees. Lawrie will continue to report directly to John M. Thompson, senior vice president and group executive for IBM Software. According to sources with access to an IBM internal memo, the Network Computing Software Division "integrates the expertise and solutions from the Java team and the Networking Software and Personal Software Products organizations." The division will focus on networking and security offerings; Java technologies, including the JavaOS and Java Virtual Machine; Java customer and partner relationships; and OS/2, the memo said. Under the reorganization, a number of PSP, networking, and Software Solutions executives were reassigned to report to Lawrie in his new position. Donn Atkins, former vice president of PSP marketing, is now general manager of the OS/2 business unit. Art Olbert, former vice president of business development for PSP, was made vice president of business development for the new division. Patricia Sueltz, former vice president of Internet software for the Software Solutions division, was made general manager of the Java software business unit. Two other PSPers—Jeff Smith, director of OS/2 business line management; and John Soyring, director of technical projects—also now report directly to Atkins.