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In 1982 Lotus Development Corp was formed with eight employees and the objective was to create a spreadsheet program for the IBM PC running under PC-DOS that made good use of the machine's facilities. As a marketing edge they decided that it would offer a spreadsheet, word processor and graphics and hence they called it 1-2-3 to indicate its three-fold function.
However, six months before 1-2-3 was released they saw a spreadsheet program called Context MBA that had a word processor that seemed to be the source of a lot of trouble. Sachs decided to drop the word processor and put in a database facility i to allow them to still call the product 1-2-3!
Sachs recalls that this was a really good idea because it was a lot easier to program the database than the word processor. It also, as it happens, established an easy to use way of working with database tables that it still difficult to beat today
Kapor and Sachs worked on 1-2-3 as designer and programmer. Sachs, being a better programmer than Kapor, worked with the code. Although based on the earlier DG spreadsheet, 1-2-3 was written in 8088 assembler which made it fast.
In many ways Sachs had the goals of a programmer - he wanted to make a programming language central to the product. Fortunately Kapor and pressure of time made him abandon this option. He did however manage to add a macro language to 1-2-3.
Mitch Kapor invented the idea of a "software designer" to describe the role he played in 1-2-3's creation. There is no doubt that Sachs worked on the code more or less alone and describes his working relationship with Kapor as more or less ideal. He would never go poking about in the insides of the program but kept his comments at the level of the user interface and exactly what the program should do.
There were few technical difficulties in producing 1-2-3 but they did break new ground with the recalculation problem. Until Lotus 1-2-3 spreadsheets either calculated in row or column order but one of the Lotus people, Rick Ross, noticed that the problem of which order to calculate formulae was the same as garbage collection in Lisp, which was his PhD thesis. Together they implemented a system for dependent order recalculation which once again gave Lotus 1-2-3 a speed advantage.
Version 1 of 1-2-3 went on sale on January 26, 1983. It not only made full use of the IBM PC it actually demanded that you buy more hardware. While the standard models shipped with 64KBytes of RAM installed, 1-2-3 needed a full 256KBytes - a very high memory requirement for those days.
The first advert for Lotus 1-2-3
While Sachs had been working hard on the code Kapor had been investing in marketing 1-2-3. He hired McKinsy & Co, a firm of business consultants, to market their new product and spent $1 million on the launch. They planned to sell $4 million worth of product in the first year - in fact they sold $53 million and quadrupled the sales of the IBM PC.
The spreadsheet in general, and 1-2-3 in particular, was responsible for pulling the personal computer out of the hobby market and into the professional arena once again.
The success continued and in 1984 Jim Manzi, one of McKinsey's consultants took over as president of Lotus. This made the company even more marketing (as opposed to software development) oriented.
Sachs left at the end of 1984 after working on Symphony - an attempt at a fully integrated package which included a word processor. Symphony was never as successful as 1-2-3 and Lotus tended to be regarded a one-product company, and its name was treated as being synonymous with "spreadsheet".
Kapor was losing interest - it wasn't fun any more. In 1984 Microsoft made a bid to buy Lotus and Kapor thought seriously about accepting and becoming a ceremonial vice chairman. Jim Manzi talked Kapor out of it - mainly because he wanted to remain boss of Lotus. How different things might have been if the take-over had gone ahead!
In 1985 an accidental meeting between Dan Bricklin and Mitch Kapor resulted in Lotus buying VisiCalc. Oddly neither Software Arts nor VisiCorp ever seem to have thought about starting a "look-and-feel" lawsuit against Lotus or any other spreadsheet clone. Buying VisiCalc allowed Lotus to kill the product and make sure that the foundations of the company were secure.
In 1986 Mitch Kapor left Lotus to Manzi. Not long after Lotus decided that legal action was a valid way to maintain a market leadership. They sued and won a look-and-feel lawsuit against VP Planner claiming that the 1-2-3 menu structure was copyright. They pursued the same action against Borland for using the 1-2-3 menu option in Quattro Pro. They may not have had the patent on spreadsheets but Lotus seemed determined to push the copyright angle as far as it would go. Later the court decided that the 1-2-3 menu is not copyright-able being a "method of operation" and not subject to copyright law.
Ironically Mitch Kapor became one of the leading lights in the Free Software Foundation's attempts to make all software freely available for everyone to use. If he'd given away 1-2-3 in the first place there would have been no Lotus and a lot fewer software copyright lawsuits!
During the early 90s, Windows grew in popularity and Excel, gradually displaced Lotus from its leading position. 1-2-3 eventually migrated to the Windows platform and for several years continued to be popular as part of Lotus SmartSuite.
IBM bought Lotus in 1995 for $3.5, mostly to acquire the rights to Lotus Notes - a groupware application. The final version of Lotus 1-2-3 was in SmartSuite 9.8.2 branded "the millennium edition" which is currently in maintainence mode. Lotus is still a brand of IBM but far less important in the market than it once was.
You can find out more about Mitch Kapor's later business interests, which include being a board member of the Mozilla Foundation, at his website.