ISP: Electronic Spreadsheets

What is a spreadsheet?

In the realm of accounting jargon a “spread sheet” or spreadsheet was and is a large sheet of paper with columns and rows that organizes data about transactions for a business person to examine. It spreads or shows all of the costs, income, taxes, and other related data on a single sheet of paper for a manager to examine when making a decision.

An electronic spreadsheet organizes information into software defined columns and rows. The data can then be “added up” by a formula to give a total or sum. The spreadsheet program summarizes information from many paper sources in one place and presents the information in a format to help a decision maker see the financial “big picture” for the company.

Beginnings and the “Tale of VisiCalc”

In 1961, Professor Richard Mattessich pioneered the development of computerized speadsheets for use in business accounting. Some historical information on the computerization of accounting spread sheets using mainframe computers is discussed on Mattessich’s web page “Spreadsheet: Its First Computerization (1961-1964)“. Rene Pardo and Remy Landau co-invented “LANPAR” LANguage for Programming Arrays at Random in 1969. This electronic spreadsheet type application was used for budgeting at Bell Canada, AT&T, Bell operating companies, and General Motors. They received a US patent (no. 4,398,249) for LANPAR in August 1982 after 12 years of litigation. Mattessich, Pardoe and Landau’s work and that of other developers of spreadsheets on mainframe computers probably had no influence on Bricklin and Frankston. Therefore, a history of the modern era of microcomputer-based electronic spreadsheets should begin with the “Tale of VisiCalc”.

The tale of VisiCalc is part myth and part fact for most of us. The story is that Dan Bricklin was preparing a spread sheet analysis for a Harvard Business School “case study” report and had two alternatives: 1) do it by hand or 2) use a clumsy time-sharing mainframe program. Bricklin thought there must be a better way. He wanted a program where people could visualize the spreadsheet as they created it. His metaphor was “an electronic blackboard and electronic chalk in a classroom.”

By the fall of 1978, Bricklin had programmed the first working prototype of his concept in integer basic. The program helped users input and manipulate a matrix of five columns and 20 rows. The first version was not very “powerful” so Bricklin recruited an MIT acquaintance Bob Frankston to improve and expand the program. Bricklin calls Frankston the “co-creator” of the electronic spreadsheet. Frankston created the production code with faster speed, better arithmetic, and scrolling. He also expanded the program and “packed the code into a mere 20k of machine memory, making it both powerful and practical enough to be run on a microcomputer”. For more details check Dan Bricklin’s email from May 12, 1999.

During the fall of 1978, Daniel Fylstra, founding Associate Editor of Byte Magazine, joined Bricklin and Frankston in developing VisiCalc. Fylstra was also an MIT/HBS graduate. Fylstra was “marketing-oriented” and suggested that the product would be viable if it could run on an Apple micro-computer. Bricklin and Frankston formed Software Arts Corporation on January 2, 1979. In May 1979, Fylstra and his firm Personal Software (later renamed VisiCorp) began marketing “VisiCalc” with a teaser ad in Byte Magazine. The name “VisiCalc” is a compressed form of the phrase “visible calculator” (see email from Frankston, 4/15/1999b).

VisiCalc became an almost instant success and provided many business people with an incentive to purchase a personal computer or an H-P 85 or 87 calculator from Hewlett-Packard (cf., Jim Ho, 1999). About 1 million copies of the spreadsheet program were sold during VisiCalc’s product lifetime. Dan Bricklin has his version of the history of Software Arts and VisiCalc on the web at www.bricklin.com/history/sai.htm. Bricklin includes early ads and reviews and pictures of the VisiCalc packaging and screenshots.

What came after VisiCalc?

The market for electronic spreadsheet software was growing rapidly in the early 1980s and VisiCalc stakeholders were slow to respond to the introduction of the IBM PC that used an Intel computer chip. Beginning in September 1983, legal conflicts between VisiCorp and Software Arts distracted the VisiCalc developers, Bricklin and Frankston. During this period, Mitch Kapor developed Lotus and his spreadsheet program quickly became the new industry spreadsheet standard.

What is Lotus 1-2-3?

Lotus 1-2-3 made it easier to use spreadsheets and it added integrated charting, plotting and database capabilities. Lotus 1-2-3 established spreadsheet software as a major data presentation package as well as a complex calculation tool. Lotus was also the first spreadsheet vendor to introduce naming cells, cell ranges and spreadsheet macros. Kapor was the VisiCalc product manager at Personal Software for about six months in 1980; he also designed and programmed Visiplot/Visitrend which he sold to Personal Software (VisiCorp)for $1 million. Part of that money along with funds from venture capitalist Ben Rosen were used to start Lotus Development Corporation in 1982. Kapor cofounded Lotus Development Corporation with Jonathan Sachs. Before he cofounded Lotus, Kapor disclosed and offered Personal Software (VisiCorp) his initial Lotus program. Supposedly VisiCorp executives declined the offer because Lotus 1-2-3’s functionality was “too limited”. Lotus 1-2-3 is still one of the all-time best selling application software packages in the world (see email from Mitch Kapor, 04/15/1999).

Kapor served as the President and Chief Executive Officer of Lotus from 1982 to 1986 and as a Director until 1987. In 1983, Lotus’ first year of operations, the company reported revenues of $53 Million and had a successful public offering. In 1984, Lotus tripled in revenue to $156 Million. The number of employees at Lotus grew to over a thousand by 1985. This rapid growth led to a shakeout in the spreadsheet segment of the personal computer software industry.

In 1985, Lotus Development acquired Software Arts and discontinued the VisiCalc program. A Lotus spokeperson indicated at that time that “1-2-3 and Symphony are much better products so Visicalc is no longer necessary.”

What about Microsoft Excel and Bill Gates?

The next milestone was the Microsoft Excel spreadsheet. Excel was originally written for the 512K Apple Macintosh in 1984-1985. Excel was one of the first spreadsheets to use a graphical interface with pull down menus and a point and click capability using a mouse pointing device. The Excel spreadsheet with a graphical user interface was easier for most people to use than the command line interface of PC-DOS spreadsheet products. Many people bought Apple Macintoshes so that they could use Bill Gates’ Excel spreadsheet program. There is some controversy about whether a graphical version of Microsoft Excel was released in a DOS version. Microsoft documents show the launch of Excel 2.0 for MS-DOS version 3.0 on 10/31/87.

When Microsoft launched the Windows operating system in 1987, Excel was one of the first application products released for it. When Windows finally gained wide acceptance with Version 3.0 in late 1989 Excel was Microsoft’s flagship product. For nearly 3 years, Excel remained the only Windows spreadsheet program and it has only received competition from other spreadsheet products since the summer of 1992.

By the late 1980s many companies had introduced spreadsheet products. Spreadsheet products and the spreadsheet software industry were maturing. Microsoft and Bill Gates had joined the fray with the innovative Excel spreadsheet. Lotus had acquired Software Arts and the rights to VisiCalc. Jim Manzi had become CEO at Lotus in April 1986 and in July 1986 Mitch Kapor resigned as Chairman of the Board. The spreadsheet entrepreneurs were moving on ..