physical was one of the firstspreadsheet software programs everreleased it was released in 1979. it wasan immediate success and it quicklybecame the go-to tool for business andindividuals looking to organize andanalyze datathree years after the launch of visacookin 1982 a new spreadsheet entered themarket it was called lotus123 it was oneof the most groundbreaking programs ofthe 80s from its release it immediatelybegan to outsole the physical experiencesheet and became the dominant spiritualof the 80s but its dominance wouldn'tlast for long as it became victim to thechanging tides of the computer industrywhich led to the rise of Microsoft ExcelExcel became the most dominantspreadsheet from the 90s onwards this isa story that includes a pizza Legobattle for former employee who becamethe past employers downfall and theseismic Market shift caused by thepopularity of the GUI this is the storyof the spreadsheet Wars the spreadsheethas 16000 cells in it so it better be able torecalculate pretty fast this spreadsheetis being used in a presentation so ithas toOur Story begins with Dan Brooklyn in1978 at Harvard Business School Danheaded the green computer science andelectrical engineering from MIT anddecided that he wanted to start abusiness of his ownsince he had no idea how to start to runa business he decided that he was goingto go to business school to get thenecessary knowledge why did businessschool Brooklyn setting classes watchingprofessors manipulate rows and Columnsof figures to do financial analysis andforecasts he noticed that if one numberwas changed many other numbers had to berecalculated with much wasted effort herealized that a computer program couldperform these calculations and any otherrecalculations far more efficiently andaccurately and that's how the idea ofphysical was born then bricklin wasdirected to a former Harvard Schoolbusiness student Daniel feilstrom whowas sending computer game programs outof his apartment near the universityBritain also approached an oldprogrammer friend of his Rob Frankstonto help develop the software program inApril 1979 the trio signed a contractDan Brooklyn and Bob Frankston in courtcompleted a company called software Artswhich would develop the program andwould be responsible for developingfuture enhancements Daniel FeisterIncorporated a separate company known aspersonal software which should undertakeits best efforts to market the programand it pays off the outer royalty oneach copy sold Brooklyn and Frankstonspent several months writing code andfine-tuning the user interface of thesoftware program the result was aprogram that was both powerful and easyto useprior to the release of visaco datamanagement and Analysis was performedusing complex and expensive mainframecomputers with specialized softwarehowever visual changed all of that bybringing the power of spreadsheettechnology to personal computers thesoftware was incredibly user friendlyand allowed individuals to perform taskssuch as budgeting Financial forecastingand data analysis with ease physicalexploded in popularity and it was dubbedin the first killer app a term used todescribe an application so useful andvaluable that it drives the sales of thecomputer hardware it runs onit was a huge reason for the massadoption of computers in the businessWorld particularly the Apple II basicookwas built to run initially on Apple IIcomputers it sold so well with Apple 2that Steve Jobs claimed the visaco wasthe biggest single event that led toApple's successthere have been two real explosions thathave propelled the industry forward thefirst one really happened in 1977spreadsheet I remember when Dan filestrowho ran the company that marketed thefirst spreadsheet walked into my officeat Apple one day and pulled out thisdisc from hisvest pocket and said I have thisincredible new program I call it avisual calculator and it became visicaland that's what really drove propelledthe Apple II to to the success itachievedwithin a couple of years bizukalk hadsold more than 200 000 copies and softerodds that developers of the software hadreceived over 22 million dollars inroyaltiesduring this period of enormous successDaniel feistro who owned the publisherof visacob changed the name of thecompany from personal software tovisacob but it wouldn't take long untilthe fairy tale began to unravelin September 1983 Visa Corps Suitesoftware ads for 60 million dollars inDamages claiming that software Arts wasin some cases more than a year late indelivering Advanced versions of physicalsaid that instead of updating visacosoftware Arts had diverted its resourcesto developing new products with softwareOutsource marketing on its own softwareads countersuit arguing that visacobitnot marketed physical gives me its bestefforts all these fighting between thedevelop and publisher Visa code left thedoor open to competitors by 1982 morethan 50 spreadsheet programs stabbed thevisit loans came to market the mostsignificant of these competitors was acompany started by Midge couple andJonathan SachsMitch couple at the time was a businessschool student at MIT he began hisobsession with personal computers in thesummer of 1978 when he purchased anapple II he talked himself out toprogram and began making money bydeveloping programs for other peopleone of his clients was a graduatestudent of Finance at MIT he wrote aprogram called tiny troll that helpedthe graduate student analyze data forhis dissertation he realized that theprogram might be useful to other peopleat the time michobo co-founded the NewEngland apple tree which was an apple IIUser Group couple knew the authors ofphysical because they attended themeetings of the Apple II User Group thephysical creatures introduced Michikoport to their publisher which waspersonal software they were interestedin tiny Troll and wanted Mitch Copo torewrite and add additional features sothat they could sell it as a companionproduct to visit CokeBeach Corporal wasn't a programmer byeducation he was self-taught as heundertook the project to rewrite tinytroll into a new and improved program herealized it was going to take a lotlonger than what he had anticipated hehad to take a leave of absence frombusiness school in order to finish theprogram he told the publisher he wantedto come out to California where thepublisher was based and that they shouldhire him to be a product manager ofvisacowhile he finishes tiny troll in hisspare time they agreedthe publisher software Arts was in themidst of a big expansion they hadrecently taken Venture Capital fundingand kept adding New Management the morethe company grew the more marginalizedMitch Kapoor felt he no longer had asmuch freedom and control over theproduct management of physical so aftersix months he decided to move back toBoston and finish tiny troll which wasrenamed to Visa plot it was released in1981. mitchko poured a royalty agreementto the publisher similar to the physicalcreators and from the moment visiblotwas released it began generating hugeroyalties about one hundred thousanddollars per month despite the successthe relationship between corpore andpersonal software would sour whilst didit personal software image couple workedon software that helped the exchange ofdata between physical and third-partysoftware programsfor example the exchange of data betweenvisaco can visit plot provided a way tomake crafts out of spreadsheet data butthis process was still cumbersome firstyou had to boot up visaco make aspreadsheet then you'd have to save thefile then you'd have to quit out ofvisaco completely and then start upvisual plot and then read in the savedfile then you'd see the graph theobvious solution here would have been toput both programs in one disk whichKapoor suggested to software Arts butthey were not interested in the idea atall he raised a number of ideas with thepublisher but they weren't interested atall it's important to note that thepeople behind physical get serioustechnical backgrounds in a bunch ofcomputer science training mean alcoholas previously discussed had no technicalbackground so his ideas were never takenseriously because of this after muchfrustration with dealing with personalsoftware he sold his Visa plot royaltyrights to personal software for one 1.2million dollars parts of the buyoutagreement was that he could not competewith visacoap in the future with oneexception a product is described in aone-page document attached to thebuyouts agreement personal softwaredidn't pay much attention to thedocument but perhaps it should havebecause it essentially described a NextGeneration spreadsheet program thatwould completely wipe out visaco butthey didn't take our post seriously sothey agreed to the sale kapo used hisprocess from the sale to co-found theLotus Development Corporation withJonathan Sykes who had worked in aspreadsheet for the data Generalcomputersand was the main architect of lotus'sfirst product which waslotus123 Lotus one two three wasreleased in January 1983 and it quicklygained popularity physical and othercontemporary species of the time werewritten for 8-bit computers inparticular the Apple II which had 64kilobytes of memory but when IBM enteredthe computer Market they released a16-bit computer which had 640 kilobytesof memory 10 times that of the Apple IIso Lotus focused on building a NextGeneration spreadsheet which would makefull use of the 640 kilobytes of memorythat were in the IBM computerswhen the IBM computer came out in Augustof 1981 it had a version of visaco canmultiplying but neither of them tookfull advantage of the capabilities ofthe IBM PC they were simply ported overversions of the 64 kilobytes bridge inversions Lotus made complete use of the640 kilobytes in the IBM machineone of the key features that helpedLotus 123 stand out was its ability tocreate charts and graphs this made itfar easier for users to visualize andunderstand their data compared tophysicalit had a very user-friendly interfacethat didn't require users to be techsavvy and it made it easier forrelatively novice employees ofbusinesses to get started and dosophisticated calculations and financialpresentationsin addition to its Advanced features anduser-friendly interface Bluetooth 123also had strong marketing anddistribution channelsit was widely available in computerstores and through mail order making iteasy for users to purchase the softwareby the mid-1980s Lotus 123 had overtakenvisacoach as a dominant spreadsheetsoftware on the market from the momentLotus 123 was released physicalsales declined so rapidly that hisdeveloper personal software was sooninsolvent Lotus ended up purchasing thecompany in 1985 and immediately endedsales of physical this solidified Lotus123 as the market leader forspreadsheets Lotus 123 was astate-of-the-art spreadsheet and thestandard throughout the 1980s and intothe early 1990s but it was caught offguard by the graphical user interfacethey focused solely on creatingspreadsheets for Emma stars andcompletely missed the graphical userinterface Revolution which Microsoftcapitalized on when they released aspreadsheet for the Macintosh GUI calledExile in 1985. it arrived in PCS withthe release of Windows 2.0 in 1987.but as Windows was not yet popular itposed no serious threat to low to thestronghold on spreadsheet sales howeverLotus suffered technical setbacks inthis period version 3 of lotus 123 fullyconverted from its original macroassembler to the more portable Clanguage was delayed by more than a yearas the totally new one two three had tobe made portable across platforms andfully compatible with existing macrosets and file formats the inability tofit the larger code size of compulsiinto lower part machines forced thecompany to split its spreadsheetofferings by the time these versionswere released in 1989 Microsoft erodedmuch of lotus's market share they hadbeen working on a spreadsheetapplication since the early 80sit was initially called Microsoftmultiplan multiplan was quick to adoptthe GUI in the mid 80s this GUIdevelopment experience put Microsoft inthe perfect position to releaseMicrosoft Excel at spreadsheet built forsolely guis it was released at a timewhen gui's were going mainstream theLotus management kept making baddecisions including betting on the IBMos2by releasing a version of lotus one twothree on iton top of this its co-founded headVisionary Mitch Kapoor had left thecompany in 1987. after his departureLotus 123 was noticeably less Innovativein the meantime Excel kept growing untilit became the market leader and Lotus123 simply never caught up again itwould Fade Into Obscurity until it wasdiscontinued in 2013.and Excel while Excel established itselfan almost Monopoly on the spreadsheetmarket and is a major pain for manyunfortunate professionals today thankyou for watching