Lotus 1-2-3

The taking of Lotus 1-2-3? Blame Microsoft.


It seems downright disrespectful to think of Lotus 1-2-3 as a blast from the past. The fact is, the seminal application still has its fair share of devotees.

Nonetheless, it’s hard to ignore the reality that Microsoft all but owns the spreadsheet market (with its Excel program). And like Odysseus’ journey to the land of the Lotus eaters, it’s been a long, strange trip for Lotus 1-2-3.

The application, which was launched in 1983 by wunderkind Mitchell Kapor and his newly formed Lotus Development Corporation, was called 1-2-3 because it offered graphics, spreadsheets, and data management.

It was the spreadsheet feature, however, that caught the eye of corporate executives. Many senior managers immediately saw the value of a program that simply wiped out a monumental amount of numbers-crunching.

The overwhelming desire to run 1-2-3, however, meant corporations had to have personal computers to do the running. And in fact, it wasn’t long before demand for 1-2-3 fueled sales for corporate PCs. As it turned out, Kapor’s relatively simple piece of software was the killer app that ignited the personal computer revolution.

Finance folks, who are up to their collective navels in scut work, were among the first to embrace 1-2-3. Indeed, back in October 1985, CFO magazine reported that “droves of middle managers and most financial executives are crunching numbers with spreadsheet programs such as Lotus 1-2-3.”

So how did the onetime software behemoth end up on the wrong end of the market-share meter? After seizing a dominant position among finance and accounting folks and other early spreadsheet software users, Lotus management took its eye off the ball, recalls Simon Hayward, a vice president and research director for Gartner Research.

In the late ’80s, Lotus turned its attention to the next killer app — this time, electronic mail. But Lotus management’s focusing on its Notes groupware product left an opening for Microsoft Corp. — and Bill Gates rarely lets a businesses opening go by the board.

Gates and company had an ace up their sleeve, too: The company’s spreadsheet, Excel, was designed from the ground up to be Windows-compliant. Conversely, Lotus came out of the DOS universe. As Gartner’s Hayward recalls, Lotus “had a horrible period” around 1990 when it was struggling to move its product from DOS to the Microsoft Windows 3.0 operating system.

Lotus 1-2-3 never recovered from the advent of Excel. Although the program still has a substantial number of users today, Hayward proclaims, “Lotus is clearly a legacy product.” In fact, Excel so dominates the field today that Gartner no longer bothers to collect usage numbers on Lotus 1-2-3.

Nevertheless, IBM, which acquired Lotus in 1995, still maintains a Web site that touts 1-2-3 as “the spreadsheet that started it all.” An even stronger reminder of the glory days of Lotus 1-2-3: the recent resurfacing of Lotus founder Kapor.

Now the head of a nonprofit foundation, the enigmatic Kapor’s been busy creating an open-source, personal information management application that could one day compete with Microsoft’s Outlook Express. Kapor publicly denies revenge as a motive. But you can’t help but think the creator of 1-2-3 wouldn’t mind taking back some business from the company that pretty much killed his killer app.

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