|This article needs additional citations for verification. (September 2012)|
|Stable release||9.8 + Fixpack 6 / 2002|
|Operating system||Microsoft Windows, Mac OS|
Lotus 1-2-3 is a spreadsheet program from Lotus Software (now part of IBM). It was the IBM PC's first "killer application"; its huge popularity in the mid-1980s contributed significantly to the success of the IBM PC in the corporate environment.
The first spreadsheet, Visicalc, had helped launch the Apple II as one of the earliest personal computers in business use. With IBM's entry into the market, VisiCalc was slow to respond, and when they did, they launched what was essentially a straight port of their existing system in spite of the greatly expanded hardware capabilities. Lotus' solution was marketed as a three-in-one, integrated solution, which handled spreadsheet calculations, graphical charts, and database functionality - thus the name "1-2-3". 1-2-3 quickly overtook VisiCalc, as well as MultiPlan and SuperCalc, two VisiCalc competitors.
1-2-3 was the de-facto standard throughout the 1980s and into the 1990s, part of a triumvirate of products that included dBASE and Word Perfect to build a complete small business platform. It was not until the acceptance of Windows 3.0 started to grow that the market began to change. None of these companies had seriously considered the graphical user interface in the DOS era, and responded slowly to Microsoft's own products, Excel and Word. As the early 1990s ended, 1-2-3 was in the number three position, and never recovered. IBM purchased Lotus and continued sales, only officially ending sales in 2013.
VisiCalc was launched in 1979 on the Apple II and immediately became a best-seller. Compared to earlier programs, VisiCalc allowed one to easily construct free-form calculation systems for practically any purpose, the limitations being primarily memory and speed related. The application was so compelling that there were numerous stories of people buying Apple II's to run the program. VisiCalc's runaway success on the Apple led to direct bug compatible ports to other platforms, including the Atari 8-bit family, Commodore PET and many others. This included the IBM PC when it launched in 1981, where it quickly became another best-seller, with an estimated 300,000 sales in the first six months on the market.
There were well known problems with VisiCalc, and several competitors appeared to address some of these issues. One early example was 1980's SuperCalc, which solved the problem of circular references, while a slightly later example was Microsoft Multiplan from 1981, which offered larger sheets and other improvements. In spite of these, and others, VisiCalc continued to outsell them all.
The Lotus Development Corporation was founded by Mitchell Kapor, a friend of the developers of VisiCalc. 1-2-3 was originally written by Jonathan Sachs, who had written two spreadsheet programs previously while working at Concentric Data Systems, Inc. To aid its growth, in the UK, and possibly elsewhere, Lotus 1-2-3 was the very first computer software to use television consumer advertising.
1-2-3 was released on January 26, 1983 and immediately overtook Visicalc in sales. Unlike Microsoft Multiplan, it stayed very close to the model of VisiCalc, including the "A1" letter and number cell notation, and slash-menu structure. It was cleanly programmed and relatively bug-free, gained speed from being written completely in x86 assembly language (this remained the case for all versions until 3.0 when Lotus switched to C) and wrote directly to video memory rather than use the slow DOS and/or BIOS text output functions.
This reliance on the specific hardware of the IBM PC led to 1-2-3 being utilized as one of the two stress test applications for true 100% compatibility when PC clones started to appear in the early 1980s. 1-2-3 was used to test general application compatibility, with Microsoft Flight Simulator being used to test graphics compatibility. 1-2-3 required two disk drives and at least 192K of memory, which made it incompatible with the IBM PCjr; Lotus produced a version for the PCjr that was on two cartridges but otherwise identical. Because spreadsheets use large amounts of memory, 1‐2‐3 helped popularize greater RAM capacities in PCs, and especially the advent of "expanded memory" which allowed greater than 640k to be accessed.
Lotus 1-2-3 became the first "killer app" for PC compatibles, especially as it was available exclusively on that platform and no other computers. Many thousands of PCs were sold solely for the purpose of running 1-2-3, and its near-monopoly of the spreadsheet market remained unchallenged for a decade.
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Lotus 1-2-3 inspired imitators, the first of which was Mosaic Software's "The Twin", written in the fall of 1985 largely in the C language, followed by VP-Planner, which was backed by Adam Osborne. These were able to not only read 1-2-3 files, but also execute many or most macro programs by incorporating the same command structure. Copyright law had first been understood to only cover the source code of a program. After the success of lawsuits which claimed that the very "look and feel" of a program were covered, Lotus sought to ban any program which had a compatible command and menu structure. Program commands had not been considered to be covered before, but the commands of 1-2-3 were embedded in the words of the menu displayed on the screen. 1-2-3 won its case against Mosaic Software. However when they sued Borland over its Quattro Pro spreadsheet in Lotus v. Borland, the courts ruled that it was not a copyright violation to merely have a compatible command menu or language. In 1995, the First Circuit found that command menus are an uncopyrightable "method of operation" under section 102(b) of the Copyright Act. The 1-2-3 menu structure (example, slash File Erase) was itself an advanced version of single letter menus introduced in VisiCalc.
Microsoft's early spreadsheet Multiplan eventually gave way to Excel, which debuted on the Macintosh in 1985. It arrived on PCs with the release of Windows 2.x in 1987, but as Windows was not yet popular, it posed no serious threat to Lotus's stranglehold on spreadsheet sales. However, Lotus suffered technical setbacks in this period. Version 3 of Lotus 1-2-3, fully rewritten from its original macro assembler into the more portable C language, was delayed by more than a year as the totally new 1-2-3 had to be made portable across platforms and fully compatible with existing macro sets and file formats. The inability to fit the larger code size of compiled C into lower-powered machines forced the company to split its spreadsheet offerings, with 1-2-3 release 3 only for higher-end machines, and a new version 2.2, based on the 2.01 assembler code base, available for PCs without extended memory. By the time these versions were released in 1989, Microsoft was well on its way to breaking through Lotus's market share.
During the early 1990s, Windows grew in popularity and along with its Excel, which gradually displaced Lotus from its leading position. A planned total revamp of 1-2-3 for Windows fell apart and all that the company could manage was a Windows adaptation of their existing spreadsheet with no changes except using a graphical interface. Additionally, several versions of 1-2-3 had different features and slightly different interfaces.
1-2-3's intended successor, Lotus Symphony, was Lotus's entry into the anticipated "integrated software" market. It intended to expand the rudimentary all-in-one 1-2-3 into a fully-fledged spreadsheet, graph, database and word processor for DOS, but none of the integrated packages ever really succeeded. 1-2-3 migrated to the Windows platform, as part of Lotus SmartSuite.
IBM's continued development and marketing of Lotus SmartSuite and OS/2 during the 1990s placed it in direct competition with Microsoft Office and Microsoft Windows, respectively. As a result, Microsoft "punished the IBM PC Company with higher prices, a late license for Windows 95, and the withholding of technical and marketing support."
IBM wasn't granted OEM rights for Windows 95 until 15 minutes prior to the release of Windows 95, August 24, 1995. Because of this uncertainty, IBM machines were sold without Windows 95, while Compaq, HP, and other companies sold machines with Windows 95 from day one.
On June 11, 2013 IBM announced it would withdraw the Lotus brand: IBM Lotus 123 Millennium Edition V9.x, IBM Lotus SmartSuite 9.x V9.8.0, and Organizer V6.1.0. IBM stated, "Customers will no longer be able to receive support for these offerings after September 30, 2014. No service extensions will be offered. There will be no replacement programs." 
The name "1-2-3" stemmed from the product's integration of three main capabilities. Along with being a spreadsheet, it also offered integral charting/graphing and rudimentary database operations.
Data features included sorting data in any defined rectangle, by order of information in one or two columns in the rectangular area. Justifying text in a range into paragraphs allowed it to be used as a primitive word processor.
It had keyboard-driven pop-up menus as well as one-key commands, making it fast to operate. It was also user-friendly, introducing an early instance of context-sensitive help accessed by the F1 key.
Macros in version one and add-ins (introduced in version 2.0) contributed much to 1-2-3's popularity, allowing dozens of outside vendors to sell macro packages and add-ins ranging from dedicated financial worksheets like F9 to full-fledged word processors. In the single-tasking MS-DOS, 1-2-3 was sometimes used as a complete office suite. All major graphics standards were supported; initially CGA and Hercules, and later EGA, AT&T, and VGA. Early versions used the filename extension "WKS". In version 2.0, the extension changed first to "WK1", then "WK2". This later became "WK3" for version 3.0 and "WK4" for version 4.0.
Version 2 introduced macros with syntax and commands similar in complexity to an advanced BASIC interpreter, as well as string variable expressions. Later versions supported multiple worksheets and were written in C. The charting/graphing routines were written in Forth by Jeremy Sagan (son of Carl Sagan) and the printing routines by Paul Funk (founder of Funk Software).
Other operating systems
A (single) version for Unix System V/386 was also released in June 1990. It was certified for SCO Xenix 2.3 and SCO Unix 3.2.0, but also expected to work on AT&T's plain System V and on ISC's 386/ix.
After previewing 1-2-3 on the IBM PC in 1982, BYTE called it "modestly revolutionary" for elegantly combining spreadsheet, database, and graphing functions. It praised the application's speed and ease of use, stating that with the built-in help screens and tutorial "1-2-3 is one of the few pieces of software that can literally be used by anybody. You can buy 1-2-3 and [an IBM PC] and be running the two together the same day". PC Magazine in 1983 called 1-2-3 "a powerful and impressive program ... as a spreadsheet, it's excellent", and attributed its very fast performance to being written in assembly.
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