1985 was a big year for a number of reasons: the Titanic was discovered on the bottom of the ocean, Ronald Reagan was sworn in for a second term as president of the United States and the first episode of Eastenders was aired on the BBC.
The same year saw the birth of two of the world’s most iconic and enduring computer programs. Two months before the launch of its flagship Windows operating system, Microsoft launched Excel 1.0 for Macintosh computers. Today, 30 September, is the 30th anniversary of that launch.
As someone who has worked with spreadsheets since before Excel existed, I remember this time well. For the first two years of its life, Excel was available only in a version for the Apple Macintosh, which was then much less commonly found in business settings than were IBM-compatible PCs. Excel’s straightforward visual interface, pull-down menus and mouse capabilities set it apart from Lotus 1-2-3, then the predominant programme of choice. Over the last 30 years, Excel has since been continually updated, overtaken all competitors, sold more than a billion copies and stands as arguably the most important business software in the world today.
In the preparation of our report to mark Excel’s anniversary, I was having a conversation with Professor Ray Panko on this, who summed it up perfectly: “Frankly, Lotus was better than Excel for quite a while,” he says. “But they didn’t invest the necessary amounts of money in its development. It didn’t keep evolving. A lot of the user interface was already defined and the limits of 1-2-3 were pretty obvious. I think if Lotus had just kept developing, Excel would not exist.”
Excel did keep developing and introducing more features which made it an accessible tool for users without a background in computer science. Because of this, Excel has made a huge contribution to the world, enabling the rapid rise of sectors like project finance, structured finance and equity analysis, as well being used by businesses in every corner of the world.
Despite playing a vital role in all aspects of business, very few people, even in the world of high-risk finance, treat Excel with the respect and diligence it deserves. It can be a dangerous tool when complicated workbooks are poorly constructed by the hands of the unskilled, and worse so when people can’t properly evaluate them. As the scope and complexity of spreadsheets in finance continues to rise, small errors are resulting in much larger disasters.
Our latest eBook explores the impact of Excel over the last three decades, the biggest hits and greatest misses, and provides advice, based on our decades of experience, for anyone working with financial models on best practice.
Download your free copy of our eBook here. I hope you enjoy the eBook and you can call the Operis team on +44 207 562 0400 if you would like any more information.