Lotus Development: A Timeline
In January 1983 a small Cambridge, Massachusetts company released a spreadsheet for the IBM PC. It was called 1-2-3, it cost $495, and it did for IBM's machine what VisiCalc had done for the Apple II: businesses bought the computer to run the program. This video follows Lotus Development year by year.
Mitch Kapor and Jonathan Sachs founded Lotus in 1982, with $600,000 from Ben Rosen of Sevin Rosen and about $5 million raised in all. 1-2-3 combined a spreadsheet, graphics and a database in one fast program, written in assembly language. Lotus sold $53 million in 1983, went public in October that year, and reached about $157 million in 1984.
Then the harder years. Symphony (1984) disappointed; Jazz for the Macintosh (1985) sold 20,000 copies against 200,000 for Microsoft's Excel. Kapor left in July 1986 and Jim Manzi ran the company. Lotus sued over the look of its menus: it beat Paperback Software on 28 June 1990, but lost to Borland in the First Circuit on 9 March 1995, and a 4-4 Supreme Court left that ruling standing on 16 January 1996. Release 3 of 1-2-3 shipped more than a year late, Lotus backed OS/2, and Excel on Windows took the desktop.
Lotus's second act was Ray Ozzie's Notes, written at Iris Associates in Westford from 7 December 1984 and shipped on 7 December 1989. Notes is why IBM launched a hostile bid on 5 June 1995 at $60 a share, agreed at $64 a week later: about $3.5 billion. IBM dropped the Lotus name in 2012 and withdrew 1-2-3 in 2013-14, and sold Notes and Domino to HCL, completed 30 June 2019. HCL released Notes/Domino 2026 on 19 March 2026. Ben Rosen, who backed Lotus before 1-2-3 existed, died on 23 August 2026.
No figure appears without its date and source.
Educational documentary. Not financial or investment advice.
In these topics
Tags
Sources and credits
Photo credits (Wikimedia Commons)
- Apple II computer (the machine VisiCalc sold): Benoît Prieur, CC0 - https://commons.wikimedia.org/wiki/File%3AApple_Museum_%28Prague%29_Apple_II_%281977%29.jpg
- Mitch Kapor, Lotus co-founder: Unknown authorUnknown author, Public domain - https://commons.wikimedia.org/wiki/File%3AMitchKapor.jpg
- IBM PC 5150 with monochrome display, the machine 1-2-3 was written for: Vintageibmmt, Public domain - https://commons.wikimedia.org/wiki/File%3AIBM_5150_PC.JPG
- IBM PC 5150: Fried Dough, Public domain - https://commons.wikimedia.org/wiki/File%3AIbm_computer_pc_5150_%286049156797%29.jpg
- Apple Macintosh, January 1984 (the platform Jazz was built for): Photo: Bernard Gotfryd - Edited from tif by Cart, Public domain - https://commons.wikimedia.org/wiki/File%3ASteve_Jobs_and_Macintosh_computer%2C_January_1984%2C_by_Bernard_Gotfryd_-_edited.jpg
- Philippe Kahn, Borland founder (Lotus v Borland): Fullpower Technologies, Inc. (Uploaded to Commons by User:Ims), Public domain - https://commons.wikimedia.org/wiki/File%3APhilippe_Kahn_Fullpower_Camera_Phone_fullsize.jpg
- US Supreme Court building (Lotus v Borland, 4-4, 1996): Packer1028, CC0 - https://commons.wikimedia.org/wiki/File%3ASupreme_Court_from_Library_of_Congress.jpg
- IBM headquarters, Armonk NY, aerial 1991 (HQ at the time of the 1995 bid): United States Geological Survey (USGS), Public domain - https://commons.wikimedia.org/wiki/File%3AIBM_Old_HQ.png
Primary sources
- Lotus Development Corporation, Form 10-K for 1994, filed 30 March 1995 (SEC EDGAR, CIK 711761) - incorporated in Delaware April 1982; net sales 1990-1994 ($692.2M, $828.9M, $900.1M, $981.2M, $970.7M); 1994 net loss $20.9M; DOS spreadsheet revenue down about $215M in 1993; 1.35 million Notes users and 6.5 million cc:Mail users at 31 Dec 1994; 5,522 employees, 2,840 in sales, marketing and support.
- IBM Form 10-Q, 1995 (SEC EDGAR) - tender offer announced 5 June 1995 at $60; definitive agreement 12 June 1995 at $64, total equity value about $3.5bn; tender completed 3 July, announced 5 July 1995, about 97% of 47.4 million shares.
- Associated Press via The Spokesman-Review, 6 June 1995 - first offer valued at about $3.3bn; Gerstner's letter to Manzi. Deseret News (AP), 5 and 12 June 1995 - hostile bids rare in software.
- International Directory of Company Histories via FundingUniverse, 'Lotus Development Corporation' - Kapor's $500,000 and $1.7M buyout; Rosen's $600,000 and about $5M raised; IPO October 1983, 2M+ shares at $18, $41M; 1983 250 staff, 1984 $157M and 700 staff; Symphony sales disappointing; Kapor left July 1986; Release 3 shipped June 1989; first 1-2-3 for Windows replaced for bugs.
- Lotus Development Corp. v. Paperback Software International, 740 F. Supp. 37 (D. Mass., 28 June 1990), Judge Keeton.
- Lotus Development Corp. v. Borland International, 49 F.3d 807 (1st Cir., 9 March 1995), text via BitLaw; 516 U.S. 233 (16 January 1996), affirmed by an equally divided Court.
- Computer History Museum, 'Ray Ozzie' profile - led the Symphony team at Lotus in 1983.
- The Register, 19 November 2012 - IBM drops the Lotus brand from the next version of Notes.
- IBM Form 10-Q, 2019 (SEC EDGAR) - HCL acquired Notes, Domino and other products on 30 June 2019 for $1,775M including $150M contingent consideration.
- HCLSoftware Digital Solutions Community, 'HCL Domino 2026 (14.5.1) is here!', posted 19 March 2026.
- Caltech, 'Caltech Mourns the Loss of Trustee Benjamin M. Rosen (1933-2026)', August 2026 - died 23 August 2026, aged 93; backed more than 100 start-ups including Lotus.
Not regulated financial advice.