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PC Software: Spreadsheets for Everyone

Paul Ceruzzi, National Air and Space Museum
Burton Grad, Burton Grad Associates

Pages: pp. 4-5

Abstract—In the October-December 2006 issue of the Annals, devoted to the history of word processing, we noted that word processing has long been the primary use for personal computers (although lately it may be in second place after Web "surfing"). Yet when one looks at the history of the personal computer's adoption, another entirely different program stands out: the electronic spreadsheet. Why is that?

One reason that spreadsheets stand out was mentioned in our Guest Editors' Introduction to the IEEE Annals of the History of Computing issue (vol. 28, no. 4) on word processing: although a very useful program, little about word processing was truly revolutionary. At the time of its introduction, many offices employed typists, often employed in pools of human beings who did the same work at a fairly low cost in terms of wages and equipment. And there were many successful shared word processing programs running on minicomputers. By contrast, the spreadsheet enabled its user to do something that hardly anyone, no matter how rich or powerful, could previously do: develop sophisticated financial models that could be rapidly and easily modified.

Venetian merchants had been recording data in rows and columns perhaps since the 15th century. But theirs was a static system. Bound ledger books provided a permanent record, but their very nature discouraged modification. In the early 20th century, IBM marketed tabulator equipment that allowed the easy and accurate calculation of data in rows and columns. But that system, too, did not allow for rapid changes, and those who needed the data did not typically have direct access to the machines. With the introduction of the spreadsheet, a person had that power on his or her desk. Whenever new information came in, the model could be updated, making it much more valuable and useful. And, of course, one could also enter hypothetical data into the model, giving instant reality to "what-if" calculations-thus our assertion that the spreadsheet's invention was revolutionary.

VisiCalc: Breakthrough application

This issue is focused on the history of that invention. When we refer to spreadsheets today, we mean the model pioneered by Dan Bricklin and Bob Frankston with their development of VisiCalc, the first spreadsheet program that enabled instant recalculation as any entry in the grid was changed. It was considered at the time (and since) as a breakthrough application, creating a new paradigm for business calculations. But Bricklin and Frankston viewed it as something more: it was a structured model for entering and examining information and was not limited to numbers or numeric problems. Many historians believe that VisiCalc was the "killer app," which jumpstarted the growth of the personal computer industry, moving it from the hobbyist and restricted-use marketplace to center stage in the computer industry.

In 1979, VisiCalc was introduced into the market by Personal Software, a company founded by Dan Fylstra and Peter Jennings. It was evangelized by Ben Rosen through his Morgan Stanley Electronics Newsletter and through his personal contacts; and within a short time it became a major force in the marketplace rivaling WordStar, the most successful word processing product at that time. Tens of thousands and then hundreds of thousands of copies were sold to individuals and to companies. The electronic spreadsheet became a "must-have" tool for anyone doing financial calculations. The ability to do instant "what-if" analyses thoroughly changed how mergers and acquisitions, and budgets, were analyzed. Many alternative assumptions could be examined to determine the projected outcomes. Financial analysis moved into an entirely different level because of this new technology.

In this issue, Burton Grad describes how Bricklin, Frankston, and Fylstra remember the creation (and then the demise) of VisiCalc. It is a fascinating story of the right people at the right time creating a seminal advance in the use of computers.

Lotus 1-2-3 takes the lead

Rapidly, a number of competitive products copied the VisiCalc row/column model, but VisiCalc remained the top spreadsheet program until a company named Lotus Development came out with Lotus 1-2-3: a much faster implementation that was "tuned" to work best for the recently announced IBM PC. As the IBM PC and its clones came to dominate the market for personal computer hardware, Lotus 1-2-3 took over the spreadsheet market in a short time. This issue has the recollections by Mitch Kapor and Jonathan Sachs on founding of the Lotus Development Corporation and the creation of Lotus 1-2-3.

To tie all of these pieces together, Martin Campbell-Kelly provides a historic overview of the use of spreadsheets to do "number crunching." He reviews the foundation for spreadsheet use, describes the various companies and products which successively dominated the spreadsheet marketplace, and tells about the other companies that provided direct competition and a wide range of add-on and extension products. These products broadened the marketplace and increased dramatically the ease of use of spreadsheets.

We hope that reading these articles will give the reader a better understanding of the elements that enable certain people and products to achieve greatness, and of how those same people can then misread the market and lose their positions of eminence. In addition, this issue also reveals another fascinating aspect of the personal computer market, which was also hinted at in the word processing issue: how differently the PC software business developed from the mainframe and minicomputer software businesses.

Multiple platforms

In the mainframe arena, IBM's operating systems provided a large, stable base of users encouraging application developers to spend the time and money to produce broadly marketable products. In the minicomputer and midrange computer arenas, the presence of multiple platforms discouraged the growth of major software companies, until the DEC PDP and VAX machines, and the IBM System 3 series and the AS/400, provided large enough markets to support substantial software companies. In the personal computer world, the high volume of sales—of first the CP/M machines, then the Apple II, and finally the IBM PC and other personal computers that used the MS-DOS operating system—provided a large enough user base that enabled a number of software companies to grow and become major factors in the marketplace. Eventually Microsoft, with its Windows operating system and its Word and Excel applications, would dominate the market for word processing and spreadsheets. That fact, however, does not diminish the excitement and drama of the events unleashed by the invention of these early spreadsheet programs, of which VisiCalc and Lotus 1-2-3 remain the most significant.

About the Authors

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Paul E. Ceruzzi is curator of aerospace electronics and computing at the Smithsonian Institution's National Air and Space Museum in Washington, D.C. He recently published A History of Modern Computing (Cambridge, Mass., MIT Press). Currently, he is working on a research project to document the history of systems engineering firms located in the vicinity of Tysons Corner, Virginia. He is a senior consulting editor of the IEEE Annals of the History of Computing editorial board.
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Burton Grad has worked on computer software since 1954 when he wrote the first production and inventory control programs for General Electric on the Univac I. He worked for IBM during the 1960s and 1970s, having initial responsibility for its CICS software. Since forming his consulting company in 1978, he has performed strategic planning and valuation studies for computer software and services companies. Heavily involved in ADAPSO/ITAA from the early 1970s, he then cofounded the Software History Center in 2000 with Luanne Johnson. Grad is cochair of the Software Industry Special Interest Group of the Computer History Museum. He is a graduate of Rensselaer Polytechnic Institute.
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