How Spreadsheets Changed the World: A Short History of the PC Era

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Apple II: The Story Begins

In 1978, my wife, Barbara McMullen, and I were in the process of leaving Morgan Stanley to form our own consulting business. We had 24 years’ worth of experience with large computer systems between us, of which seventeen was with securities processing systems. Our plan, therefore, was to concentrate on working on large, "mainframe" brokerage systems, and we had already signed a small retainer agreement with a data processing services firm to begin our independent life.

While still with Morgan Stanley, we were about to get on the elevator to go to lunch one day when a coworker from another area of the firm, Seth Gersch, met us and said, "I understand you’re leaving". When we nodded in affirmation, he said, "Have you seen the computer up on Ben Rosen’s desk?"

"No," I said. (I couldn’t imagine a computer on a desk)

"Then you should go look at it," he said. "There might be something in it for you."

So, instead of going down in the elevator, we went up to our Research Deptartment. We had never met Ben, but we knew that he was the firm’s well-renowned electronics analyst. And, on his desk, we got our first look at the Apple II. (Read some background on Apple’s product development in Creating the iWorld: A History of Apple.)

The computer had a modem connection to a Farmer’s Weather Service in Kentucky, a Dow Jones portfolio program and a game running off cassette tape. Not much there, but very intriguing all the same. I decided right then and there to buy one.

The First Electronic Spreadsheet

As luck would have it, shortly after we were introduced to the Apple II, we bought one from an ad in a local Pennysaver, complete with two disk drives. A few days later, we were in the office with one of our clients and I happened to mention the purchase of the Apple II. He surprised me by saying, "You should talk to a friend of mine, a doctor. He’s the South Jersey distributor for Apple."

"Your doctor is a distributor for Apple?"

"Yes, he gets into a lot of things," he said, and gave us Dr. Bill Merlino’s phone number.

As it turned out, Bill wasn’t a distributor for Apple, he had opened Jonathan’s Apple, a computer store in Marleton, N.J., and was watching it expand rapidly. We spoke to Bill and not only became the closest of friends, but also wound up collaborating on a number of business deals over the years in which he supplied the equipment and we provided the applications expertise and the customer interface.

The World’s First Spreadsheet Program

All this would have had little impact on our lives. But then, another Morgan Stanley friend called our attention to a piece in the "Morgan Stanley Electronics Letter" about a new software product called VisiCalc. VisiCalc was the first electronic spreadsheet! It seems old hat now, but when the product was shown to non-computer people, many were unimpressed, assuming that dealing with numbers was what computers do. On the other hand, computer people, knowing that a program had never been written for spreadsheets on a mainframe or a minicomputer, were more than taken aback – "astonished" would be a better term.

Ben Rosen, the electronics analyst at Morgan Stanely, had received an early copy of the program and rather rapidly perceived the possible impact of the program. His article discussed the product and then ended with one of the most prophetic quotes in the history of the business world: "So who knows? Visicalc could some day become the software tail that wags (and sells) the personal computer dog."

Build the Spreadsheet and Computer Users Will Come

What Ben’s quote to meant was that, up until this time, mainframe computers and minicomputers would be purchased and then the buyers would either write programs for their needs or buy software already written for their particular industries. But once people understood the value of spreadsheets, they would want to buy VisiCalc (at that time, $100) – and something to run it on. (At that time, the only option was an Apple II, which could cost from anywhere from $4,000 to $10,000 depending on the quality of the printer and monitor attached to the system.)

We rapidly became proficient with VisiCalc and many in the financial community began to both design VisiCalc models for personal business use and receive training in the use of the Apple II and VisiCalc. We did a turnkey installation with computers purchased from Jonathan’s Apple, developed a cassette and diskette-based training program for VisiCalc and marketed it through our own newsletter. We sent copies of the training material to Software Arts, the firm started by the developers of VisiCalc, Dan Bricklin and Bob Frankston, two special people who soon became friends.

When Popular Computing Magazine asked Dan to write an article about VisiCalc, he recommended that my wife, Barbara, write it instead. That led to a long career as writers. We repaid Dan somewhat a few years later when we wrote a cover article for Computers and Electronics Magazine, formerly Popular Electronics, which as a kid, Dan had dreamed about being featured in.

VisiCalc Hits the Big Time

The marketing of VisiCalc was done by a company called Personal Software, which was founded by Dan Fylstra and Peter Jennings. This left Dan Bricklin and Bob Frankston – VisiCalc’s developers – free to come up with new and improved versions of Visicalc, including one for the unsuccessful Apple III and one for a Hewlett Packard computer.

As VisiCalc propelled the sales of more and more Apple IIs, other software developers looked for opportunities to provide products to the same marketplace. One of the early ones was Mitchell D. "Mitch" Kapor, who developed a statistical and graphing program based on a mainframe product known as TROLL, which he named "Tiny Troll" and marketed for $100. We got an early look at the product and began to install it for our customers.

Computer Frustration Is Born

While customers were pleased with both products, they soon came to what we referred to as "the next level of dissatisfaction." At first, they were first blown away by the new products. But, once they became proficient in using them, they began to find things that they wish were improved. A big one in this case was that the programs "did not talk to each other," so the same data had to be keyed into both programs.

Solutions and Success … For Now

Quickly, the bright group of players came up with solutions. Bob Frankston developed an interface format, "dif", which he published for developers and users to use in transporting VisiCalc data. Personal Software, to capitalize on the VisiCalc brand, changed its name to VisiCorp, and reached an agreement for Kapor to develop a new product based on Tiny Troll that would both contain color graphics and interface with VisiCalc. The resulting product actually turned out to be two products: VisiTrend + VisiPlot, which contained graphics and statistical functions, but was intended for those who only wanted to develop graphics from manual or VisiCalc input.

For a while everything was wonderful. Software Arts and VisiCorp were making money hand over fist, Bricklin, Frankston and Kapor were software heroes, and Barbara and I had built a consulting firm. We had professional and office staff and were travelling all over the U.S. and Latin America training customers and developing systems!

Competition Heats Up in the Spreadsheet Market

In 1980, cracks began to appear in monolithic spreadsheet world populated only by Software Arts, the firm that developed VisiCalc, and VisiCorp, the firm that marketed VisiCalc and related products (VisiPlot, VisiTrend + VisiPlot and VisiFile). In that year, Sorcim introduced a spreadsheet, SuperCalc, which ran on the CP/M operating system. SuperCalc was bundled on the first portable (or, more accurately, luggable) computer, the Osborne One, when the computer was released in 1981. Coincidentally, I was standing with VisiCalc developer Dan Bricklin at a computer show in Chicago at the Osborne booth watching one of the first public demonstrations of SuperCalc. It was obvious to both of us that the demo version of SuperCalc was not ready for prime time, but it would be soon.

IBM Introduces a PC

In 1981, IBM introduced its personal computer, the IBM PC. Once IBM decided to enter into competition with Apple in this market, it pulled out all stops by entering into contracts with the leading Apple II developers to provide versions of their programs for the PC. It set up arrangements with Microsoft, VisiCorp, Capt’n Software and Peachtree. Once the IBM-PC was available on the market, it rapidly displaced the Apple II as the personal computer of choice in the corporate workplace.

Lost in the euphoria of the early IBM success, however, were two items that would have a huge impact in the spreadsheet world:

  1. VisiCalc actually ran faster and had a larger workspace (more columns and rows) on a 64K Apple II than on a 64K IBM-PC. On the Apple II, Software Arts had gone beyond the restrictions of the Apple DOS operating system to maximize the power of VisiCalc, while on the IBM-PC, it ran under the confines of MS-DOS.
  2. Mitch Kapor, the original developer of VisiPlot and VisiTrend + VisiPlot for the Apple II, decided not to develop a version for the IBM-PC. Instead, he sold his rights to VisiCorp and used the proceeds to start his own venture capital firm, Sevin Rosen Funds. Eventually, he would form the Lotus Development Corporation.

Lotus Gets Into the Spreadsheet Market

In 1982, not only was Lotus founded, but Microsoft also introduced its first spreadsheet, MultiPlan, which would later become the first spreadsheet available for the Macintosh. While VisiCalc and later SuperCalc used CnRn as cell identification (C = Column, n = Number, R = Row), MultiPlan reversed the scheme to RnCn. This notation, while understandable, caused confusion and annoyance to any prior VisiCalc user and, other than on the Macintosh, MultiPlan never gained significant market share.

In the meantime, both VisiCorp and Software Arts were expanding their product lines beyond VisiCalc and VisiCalc related products. VisiCorp was developing, on Digital VAX machines, VisiOn, a graphical user interface to unite products written for its standard and VisiWord, the first application to run under this standard. Once the applications were developed, they were transported to be run on an IBM-PC (although a very high-end PC with a large hard disk). The products were demonstrated to much fanfare at Fall COMDEX 1982 and announced for release for fall 1983.

At the same time, Software Arts was working on TK!Solver, a rule-based equation-solving program, as well as on problem kits that would allow various industries or professions to work with the equation-solving engine. Unlike with VisiCalc, Software Arts, whose relationship with VisiCorp was beginning to deteriorate, would market this product itself. Both the development of VisiOn and TK!Solver were funded by sales of both companies’ cash cow, VisiCalc.

Lotus 1-2-3 and a Major Market Shift

On January 26, 1983, Lotus Development introduced a new spreadsheet program, 1-2-3, and the entire spreadsheet market changed. 1-2-3 was fast and provided features that VisiCalc did not, such as business graphics (pie, line, bar charts, etc.,) and data management (sort, lookup, statistics, etc.) functions.

1-2-3 was an overnight success. A huge success, in fact. The original sales projection was for $1 million in the first year – actual sales hit $64 million. This turned Lotus Development into the largest independent company in the world.

Why Lotus 1-2-3 Beat Out the Competition

1-2-3’s success had two immediate impacts on the industry:

  1. Fledging computer manufacturers, such as Columbia and Eagle, had begun to copy the IBM-PC. Their hope of blockbuster success soon crashed, however, when it became evident that the clones would not run the IBM-PC’s killer app, 1-2-3. Lotus’ non-adherence to the standards of MS-DOS caused problems. This "IBM-PC only" restriction changed with the introduction of the Compaq Portable in March 1983 by Compaq Computer. Compaq’s stated commitment to run all business software that runs on the IBM-PC, and its ability to run 1-2-3, was the beginning of the demise of IBM as the standard bearer of PCs.
  2. The VisiCalc cash cow dried up almost immediately, and hostilities broke out between VisiCorp and Software Arts, with Software Arts accusing VisiCorp of not living up to its marketing responsibilities because of its focus on VisiOn and VisiCorp. Software Arts rescinded its marketing agreement with VisiCorp, and took over the marketing of VisiCalc. But the game was over for both firms. Lotus acquired Software Arts in 1985 and discontinued the VisiCalc product. That same year, VisiCorp was sold to Paladin Software.

Lotus’ Major Missteps

Lotus’s dominance in the software industry was not without missteps. In 1984, Lotus introduced Symphony, which it envisioned as a high-end successor to 1-2-3. Symphony added the functions of word processing and telecommunications to the spreadsheet, business graphics, and data management functions of 1-2-3, providing the user with a totally integrated package. Although Symphony quickly spawned competition from other firms, it became obvious that the integrated package was a flawed concept. The products tended to be resource hogs, were not intuitive to use, and were too expensive for many users. Moreover, market surveys (which should have been done earlier) showed that while approximately 20 percent of 1-2-3 users used the business graphics functions occasionally, only a negligible negligable few used the database functions. In other words, 1-2-3 was successful because it was the best available spreadsheet! Symphony, therefore, was a failure.

When Apple’s Macintosh was introduced in January 1984, the only spreadsheet available for it was Microsoft’s MultiPlan. So, when would there be a version of 1-2-3 for the Mac? Lotus’ response was that the 128K Mac was underpowered for spreadsheet processing and, when the Mac was expanded to 512K, there would be a spreadsheet from Lotus. In 1985, there was 512k available and Lotus introduced Jazz, its Macintosh spreadsheet. Jazz was, to put it kindly, a complete failure. In his book, "The Macintosh Way," Apple software evangelist Guy Kawasaki put it more bluntly, saying that it was so bad that "even the people who pirated it returned it." Later that year, Microsoft introduced Excel, a full-featured spreadsheet that rapidly became the Macintosh spreadsheet. Jazz faded into oblivion.

In 1987, Lotus sued a number of software companies, claiming that their spreadsheet offerings infringed on the Lotus look and feel. Lotus was successful against two small firms, Paperback Software and Mosaic, which both went out of business. It was unsuccessful in its claims against Borland’s product, Quattro Pro. Lotus’ actions enraged many in the software industry, particularly Free Software Foundation founder Richard Stallman, who led picketing of Lotus’ Cambridge, Mass., offices and in 1989 founded the League for Programming Freedom to oppose such activities as the Lotus suites.

None of these missteps was enough to derail Lotus as the dominant applications software firm of the 1980s and into the 1990s. It would take a major error in the 1990s to do that.

As far as my own consulting business, the massive proliferation of PCs in the early 1980s had caused most corporations to purchase centrally and to build in-house support teams, leading my firm to move to database development. My wife, Barbara McMullen, and I also wrote one of the first – if not the first – book on microcomputer communications, "Microcomputer Communications: A Window on the World" (John Wiley & Sons, 1983), and we expanded our writing to regular pieces in Computer Shopper, InfoWorld and PC Magazine, among others. We also began teaching college courses.

The Spreadsheet Industry in Retrospect

Looking back at this period, a few things stand out. First, both Software Arts and VisiCorp essentially had all their eggs in one basket, which is never a good thing in the business world. Both companies were totally dependent on the one flagship product, VisiCalc, as they explored other directions. Would greater focus on VisiCalc have led to enhancements that would have helped it compete with 1-2-3?

Another issue was new competition. 1-2-3 came out of nowhere to dominate the industry, much like IBM arrived, pushing Apple aside. There will always be a new player, one with the benefit of building on newer faster technology. Companies that don’t keep looking over their shoulders while pushing ahead, may find themselves on the sidelines.

Finally, the leader can often get away with some missteps. We have seen Lotus make errors and survive. As long as it didn’t lose focus on improving its industry-leading product, 1-2-3, it could keep its preeminent position. In the next section, we’ll explore what finally ended its reign.

OS/2 Brings Down the House

Neither the failure of Symphony, nor Jazz were enough to derail Lotus as the dominant applications software firm of the 1980s and into the 1990s.

While Lotus was dominating the applications software market and drawing much of the attention of microcomputer users, there was a good deal of movement going on behind the scenes in the operating system and user interface areas.

A Surge in Operating Systems and User Interfaces

Steve Jobs had been to Xerox’s Palo Alto Research Center (PARC) in 1979, had seen the graphical user interface controlled by a mouse on Xerox’s Alto computer and was enthralled by it. He rapidly arranged to license the interface, a move opposed by most of the Xerox development team. They were overruled by Xerox top management, and the licensing went forward.

Apple had begun the Local Integrated Software Architecture (LISA), an acronym, according to Apple developer Andy Hertzfeld, that was reverse engineered from the first name of Jobs’ daughter, Lisa Nicole Brennan. Years later, Jobs confirmed the story to his biographer, Walter Isaacson. Since 1978, Apple had been working to develop a successor to its then-dominant Apple II. Its previous attempt, the Apple III, had been a failure. The GUI licensed from Xerox quickly became part of the development effort.

IBM Supplants Apple … For Now

In 1980, IBM introduced the IBM-PC and quickly supplanted Apple as the dominant microcomputer manufacturer. The success of the PC resulted in a great deal of activity in the computer industry. Software companies began either porting existing software to the PC while hardware companies began strategizing about whether they could "clone" the PC to provide other platforms on which to run the burgeoning software for that market. Most companies (Hewlett-Packard and Tandy, for example) chose the clone approach. This was not really successful until Compaq Computer introduced its Portable PC in November 1983. Meanwhile, Apple continued to go its own way.

In 1981, Xerox introduced the Star, a minicomputer that used the GUI as an interface. It also launched its Ethernet local area networking standard, which it released into the public domain. The following year, VisiCorp released its VisiOn GUI for MS-DOS systems. While it ran on MS-DOS systems, it and applications developed for it were developed on a Digital VAX computer. In 1983, Apple introduced the Lisa and Microsoft announced Windows, its GUI interface for MS-DOS. Both happened in the same year that Lotus delivered the first version of 1-2-3.

The Lisa was a failure for many reasons. It was more expensive than competing MS-DOS machines, it was a closed computer, running only software developed by Apple, and it was, in the words of industry guru Peter Norton, "ahead of its time." I remember being in many computer stores and seeing customers gathered around a Lisa going "wow" and "that’s nice" – while they waited to take their IBM-PCXTs home.

The Debate Over User Interfaces

At the time, there was a continuing debate as to whether the VisiCorp approach or the Microsoft one would be the successful one. I sat in forums and other conferences and listened to VisiCorp’s Dan Fylstra and Microsoft’s Bill Gates debate the rationales of their approaches. Gates maintained that the user interface should be part of the operating system, while Fylstra insisting that the interface was separate; it was an "environment" that was much more efficient when maintained as a separate entity.

It turned out that both approaches were doomed to, at least initial, failure. VisiCorp, following the loss of its cash cow, VisiCalc, could not support the ongoing development and marketing of VisiOn and was acquired by Paladin Software in November 1985. Microsoft did not release Windows until 1985 and it was less than impressive, to say the least. Bitmapped text was close to unreadable. This was not really Microsoft’s fault – the resolution on 1985 PC monitors did not provide for high-quality text display. Microsoft applications written for Windows were also less powerful than those running under straight DOS.

Apple Introduces the First Mac

On January 24, 1984, Apple introduced the Macintosh, the first GUI system that not only captivated the public, but also generated sales. It did not have the baggage of the Lisa; it was cheaper and was relatively open in the sense that it ran third-party software that conformed to the requirements of the GUI. Microsoft and others had Macintosh software available on the announcement. Apple, while trying to seduce users away from the MS-DOS platform, attracted a new group of users: artists, writers and, after the introduction of page layout capability, magazine publishers and advertising agencies. It was less successful at attracting MS-DOS users, though, because the file structures were not compatible and the most important MS-DOS program, 1-2-3, was not available on the Macintosh. (To read more about Apple’s product development, see Creating the iWorld: A History of Apple.)

OS/2 Brings Down the House

As the use of personal computers expanded through businesses, the shortcomings of MS-DOS became more and more apparent. It was only able to address 640K of memory (and that included both the operating system and application program) even though the 80386 and 80486 Intel chips could address millions of bytes of internal memory. DOS could only run a single program at a time, and was a single-user, non-networkable system. There were many DOS add-ons to try to add these features. The downside of these products was that each one made the MS-DOS system less stable.

I did not add the lack of a GUI to the list of defects in MS-DOS because it was not available when MS-DOS was developed and, more importantly, the techie community saw little value in GUIs. "Real computer people" worked at the command line. To them, the Macintosh was not a real computer but an end-user device, and the overhead of the GUI degraded the performance of the system. They would later have to be forced into the GUI world.

During the same period, IBM had lost control of the platform that it had brought into being. The ability of the Compaq Portable to run 1-2-3 had shown that full PC-compatibility was possible and other manufacturers soon followed, including Dell and Gateway. IBM saw an opportunity to regain its lead with the introduction of a new and faster I/O gear that would only run with a new operating system. It entered into an agreement with Microsoft under which Microsoft would develop a new GUI-based, multiuser, multiprogram operating system to be called OS/2.

IBM would simultaneously introduce both an expanded version of OS/2 called OS/2EE (OS/2 Extended Edition), which would support a much faster I/O bus called Micro Channel and a group of computer models called PS/2, which contained Micro Channel. IBM and Microsoft signed a joint development agreement in August 1985 and announced OS/2 in April 1987.

What Killed Lotus and WordPerfect?

I was at the April announcement and saw the announcement of one of the worst business decisions made in the short history of microcomputer development. Once the benefits of the new operating system were described – with both Microsoft and IBM maintaining that the new operating system would be "the business operating system" – the rest of the presentation dealt with the many software firms that had signed on to develop versions of their software for OS/2. Among the many firms were the leaders in DOS-based software, Lotus Development Corporation and WordPerfect Corporation.

When the presentation went to question and answer, Bill Gates was asked whether with the introduction of OS/2, Microsoft would stop its development of Windows. Gates replied that it would not because OS/2 would require a great deal more resources than the individual or home office business would require and Microsoft was committed to keep supporting that market. Sometime later, Jim Manzi, CEO of Lotus was asked if, since Lotus was now developing a GUI version of 1-2-3, it would now create one of Windows. I can still hear Manzi replying "No, you heard Bill say that Windows would be for the individual or home office market and that is not our market."

WordPerfect made the same decision. Conspiracy theorists over the years have surmised that Gates saw the future and sandbagged both Lotus and WordPerfect. I certainly can’t ascertain whether that is true, but their decision to stay out of the home office market effectively killed both companies.

The Downfall of DOS

In 1989, Lotus began marketing Notes, a system that integrated all commonly used computer functions – spreadsheets, word processing, email, database, etc., into one format that would be accessible to users. Each document or sheet developed in any software was a "note," accessible through a Notes database or email. The system was a client/server system, with an OS/2 server as its centerpiece. Clients were to be developed for OS/2, Windows, UNIX and Macintosh.

Notes was originally developed by Isis Associates, a firm founded by Data General, Software Arts, and Lotus veteran Ray Ozzie (later the founder of Groove Networks and, after Groove’s acquisition by Microsoft in 2005, Microsoft’s chief software architect.) Lotus acquired Isis in 1994.

IBM Makes a Fatal Mistake

All might have been well for Lotus and WordPerfect had OS/2 gone as announced, but major problems developed. IBM’s hardware plan for Micro Channel would have involved purchasers replacing all of their I/O interface cards with new Micro Channel cards. IBM’s competitors seized on this weakness and came together to form a group to work on an Extended Industry Standard Architecture (EISA) standard that would allow its members (Compaq, HP, Tandy, AST and others) to develop equipment with slots that would support both the older Industry Standard Architecture (ISA) cards, and the new, faster EISA cards. The new machines would have the same speed and features as the IBM PS/2 and would invariably be cheaper.

IBM and Microsoft had difficulty working together for a variety of reasons. For one thing, the firms had different cultures. IBM saw Microsoft’s continued development of Windows as a dilution of its OS/2 effort, while Microsoft saw IBM’s main interest as selling hardware. The firms each developed a lack of respect for the other’s technical competence, and the initial releases of OS/2 were panned by critics as slow resource hogs. Industry pundit Stewart Alsop referred to OS/2 as "a fascist operating system" for the way it took away the control of the system from the user. (In later years, Alsop recanted this judgment, but the damage had already been done.)

Microsoft Gets It Right With Windows 3.0

Meanwhile, Microsoft continued to miss out on commercial success with Windows until it released version 3.0 for MS-DOS in 1990, a GUI that, like the previous versions, sat on top of MS-DOS rather than replacing it. It was, therefore, not an operating system, but just a user interface. Unlike the previous versions, however, the screen was quite readable and, more importantly, there was quality software that ran under it as Microsoft was able to transport its Microsoft Office Suite from the Macintosh to the MS-DOS/Windows systems.

Graphic Browsers and the World Wide Web

Even with these enhancements, techies still saw Windows 3.0 as inefficient and a waste of resources. And besides, 1-2-3 didn’t run on it. As such, Windows 3.0 would not have reached widespread use were it not for the arrival of Mosaic, a free graphic browser for the World Wide Web.

In August 1991, Tim Berners-Lee, working at CERN (the particle physics laboratory in Geneva, Switzerland) introduced a client/server method of finding and exchanging information throughout the Internet, which he named the World Wide Web. Berners-Lee published standards for developing Web pages (HTML), publishing the pages (HTTP) and providing an addressing standard for the finding the pages (URL). (Read more about Berners-Lee in The Pioneers of the World Wide Web.)

Berners-Lee’s client was text-based and made innovative use of the Telnet/Terminal utility found on all computers. It was extremely interesting and useful for experienced computer and Internet users – but of little interest to inexperienced users.

Marc Andreessen and Eric Bina, graduate students at the University of Illinois Urbana-Champaign who were working at its National Center for Supercomputing Applications (NCSA), saw an opportunity to expand the use of the Web by developing a client, or browser, with a graphic interface. Development of Mosaic began in December 1992 and a version for X-Windows, a GUI for UNIX, was released in April 1993 with other versions for Windows, the Macintosh and the Commodore Amiga released by October of the same year. The graphic browser spread like wildfire and became the killer app that moved personal computers into the home (as VisiCalc had been the killer app for the Apple II and 1-2-3 had been for PCs in the business world. We are still looking for the next killer app!)

Once the ball started rolling on the graphical Web browser, techies had to recognize that GUIs were here to stay and businesses began to accept and support them. Plus, while 1-2-3 and WordPerfect were not available under Windows, Excel and Word were – game over!

Game Over for Lotus

Ironically, Lotus suffered the same fate as Software Arts and VisiCorp. Each firm embarked on the development and marketing of an innovative product. When the cash cow disappeared suddenly, however, it was game over for the firm. This is what happened to Lotus, and the firm was sold to IBM in 1995. WordPerfect suffered a similar fate and was sold twice, first to Novell in June 1994 who then to a short while later Corel.

Lessons Learned

Looking back at the spreadsheet history and our involvement, a few things stand out:

  • Luck
    We were incredibly lucky to have run into Seth Gersch at that elevator and taken his advice to go up to see Ben Rosen and his computer. That one incident set the tone of our 35-year business life. Microsoft had similar luck when the graphic browser "came out of nowhere" to drive people to GUI environments. Microsoft repaid the debt later by driving Marc Andreessen’s company, Netscape, out of business.
  • Too Many Eggs in One Basket
    Software Arts, VisiCorp and Lotus relied on one cash cow to fund heavy development and marketing of new products. This is very dangerous, and it helped contribute to the downfall of all three companies.
  • Some Things Can’t Be Predicted
    Neither Lotus nor Microsoft could have predicted the World Wide Web/Mosaic, but Microsoft was in a position to benefit from it while Lotus was not.
  • It’s Hard to Get Away from Bad Work and Bad Decisions
    In retrospect, it’s obvious that Lotus made a major "you bet your company" blunder in not developing for Windows. Perhaps, if it had done a better job of understanding the wants and needs of Macintosh users, it would have developed a much better product for the Macintosh than Jazz and staved off Microsoft’s success with Excel. Macintosh users wanted a spreadsheet from Lotus but not an inferior one. Perhaps if it had developed a successful version of 1-2-3 for the Macintosh, it would have had a product ready to port to Windows.
  • Love What You Are Doing and Keep Learning And Adapting
    As for my wife Barbara and I, we slowly moved into teaching college full time and writing. We have taught and/or held administrative positions at NYU, The New School for Social Research, Marist College, Tufts University, Westchester Community College, Monroe College, Purchase College of SUNY and Iona College. We’ve also continued to write about tech. By learning and adapting as the tech world changed – and sincerely enjoying having a place in it – we’ve carved out an exicting and interest career and life.
John F. McMullen

John F. McMullen lives with his wife, Barbara, in Jefferson Valley, New York, in a converted barn full of pets (dog, cats, and turtles) and books. He has been involved in technology for more than 40 years and has written more than 1,500 articles, columns and reviews about it for major publications. He is a professor at Purchase College and has previously taught at Monroe College, Marist College and the New School for Social Research. MucMullen has a wealth of experience in both technology and in writing for publication. He has worked as a programmer, analyst, manager and director of…