Lotus was founded in 1982 by partners
Mitch Kapor and
Jonathan Sachs with backing from
Ben Rosen. The name referred to the three ways the product could be used, as a spreadsheet, graphing tool, and
database manager. The last two functions were less often used in practice, but 1-2-3 was the most powerful spreadsheet program available. Lotus was almost immediately successful, becoming the world's third largest microcomputer software company in 1983 with $53 million in sales in its first year mostly through
Softsel and
ComputerLand, compared to its business plan forecast of $1 million in sales. In 1982,
Jim Manzi — a graduate of
Colgate University and
The Fletcher School of Law and Diplomacy — came to Lotus as a management consultant with
McKinsey & Company and became an employee four months later. In October 1984, Manzi was named president of Lotus, and in April 1986, he was appointed
CEO, succeeding Kapor. In July of that same year, he also became chairman of the board. Manzi remained at the head of Lotus until 1995.
Dominance As the popularity of the
personal computer grew, Lotus quickly came to dominate the spreadsheet market. Lotus introduced other office products such as
Ray Ozzie's
Symphony in 1984 and the
Jazz office suite for the
Apple Macintosh computer in 1985. Jazz did very poorly in the market (in Guy Kawasaki's book
The Macintosh Way, Lotus Jazz was described as being so bad, "even the people who pirated it returned it"). Softletter estimated that in 1986 the "Big Three" of Lotus (9%, more than $275 million), Microsoft (8%), and Ashton-Tate (6%) together had 23% of total revenue of the top 100 microcomputer software companies. Of the 15 million Americans who used a personal computer in their job, a quarter used 1-2-3. Computer Intelligence estimated in 1987 that Lotus had 85% of the
Fortune 1000 PC financial analysis market, with Microsoft second at 6%. It also estimated a 20% share of the presentation software market, second to Ashton-Tate and ahead of Microsoft's 6%. A 1987
Computerworld survey gave Lotus a B grade for technology and product support, B+ for management, C+ for customer relations, and B− for marketing. Customers said that the company was slow to upgrade products, documentation and seminars were good but telephone support was poor, management had succeeded in defeating many competitors, customer relations had improved but
copy protection was still the top complaint, and Jazz's failure showed that Lotus's ability to market products other than 1-2-3 and Symphony was unknown. In the late 1980s, Lotus developed
Lotus Magellan, a file management and indexing utility. During the 1980s Lotus remained dependent on retail customers of 1-2-3 and Symphony.
Computerworld noted in 1987 that "the company has announced or acquired nearly a dozen products ... over the last two years, but none accounts for more than a few percentage points of the company's yearly revenue". The magazine added that, according to Lotus, "The spreadsheet is a hook ... into other major application markets such as word processing, data base management, graphics and communications". That year Manzi said that Lotus would release software for IBM's
OS/2 operating system before
Microsoft Windows, and his company announced 1-2-3 for
IBM mainframe. In the 1990s, to compete with Microsoft's Windows applications, Lotus had to buy in products such as Ami Pro (word processor), Lotus's dominant groupware position attracted IBM, which needed to make a strategic move away from host-based messaging products and to establish a stronger presence in client-server computing, but it also soon attracted competition from
Microsoft Exchange Server. In the second quarter of 1995, IBM launched a hostile bid brought it more in line with its parent company, IBM. IBM moved vital marketing and management functions from Cambridge, Massachusetts, to IBM's New York office. Gradually, the Lotus.com website changed its "About us" section to eliminate references to "Lotus Development Corporation". The Lotus.com web page in 2001 clearly showed the company as "Lotus Development Corporation" with "a word from its CEO" by 2002, the "About us" section was removed from its site menu, and the Lotus logo was replaced with the IBM logo. By 2003 an "About Lotus" link returned to the Lotus.com page on its sidebar, but this time identifying the company as "Lotus software from IBM" and showing in its contact information "Lotus Software, IBM Software Group". By 2008 the Lotus.com domain name stopped showing a standalone site, instead redirecting to www.ibm.com/software/lotus, and in 2012 the site discontinued all reference to Lotus Software in favor of IBM Collaboration Solutions. IBM discontinued development of IBM Lotus Symphony in 2012 with the final release of version 3.0.1, moving future development effort to Apache OpenOffice, and donating the source code to the Apache Software Foundation. Later that year, IBM announced it was discontinuing the Lotus brand and on March 13, 2013, IBM announced the availability of IBM Notes and Domino 9.0 Social Edition, replacing prior versions of IBM Lotus Notes and IBM Lotus Domino and marking the end of Lotus as an active brand. On December 6, 2018, IBM announced the selling of Lotus Software/Domino to HCL for $1.8 billion. ==Corporate culture==