| Pace 72

PC WEEKNAPPLICATION DEVELOPMENT

[DECEMBER 4, 1989

 APPLJED INTELLIGENCE

Lotus' Future Contingent on heaction to New Products

This 1s the

of articles on
the strategic di:

tus is pursutng,
and the signifi-
cance of those

A. strategies to or-
Mi ganizattons
m planning for
TA! the 19905.
JAMES a otus Pusta
Wi P ment Corp. has
MARTIN become synony-

mous with its 1-
2-3 spreadsheet, whose success has

dwarfed other Lotus products. 1-2-3 was
well-designed and has proven to be high-

ly durable.

Today, with significant changes occur-

ring in the industry, 1-2-3 is at a cross-
road. Two long-overdue upgrades have
finally been shipped, and to a large ex-

tent the reaction of the installed base to

these new products will define the fu-
ture for Lotus.

The momentum of 5 million users and

millions of 1-2-3 applications dictate
that change will take place slowly; but
even slow movements of this large base

produce big numbers in sales. For exam-

ple, upgrading to release 3.0 or release
2.2 by 20 percent of the installed base
would represent almost 1 million sales.

The strategy devised by Lotus for its
spreadsheet products takes advantage
of its installed base and positions the
company to respond to both technologi-
cal and market dynamics.

Lotus strategy with respect to

spreadsheets appears to be concentrated

in the following areas:

e Protecting and extending the market
base.

e Responding to the needs of character-
based users with larger and more com:
plicated spreadsheets, faster execution
and better output.

' Solving the "islands of computing"
problem by offering highly compatible
spreadsheet products on most major
platforms under all popular operating

systems, including mainframes and mini-

computers.
' Offering several levels of data sharing,
ranging from simple file compatibility to
dynamic exchange of data.
' Providing seamless data sharing and
application interaction under OS/2 for
both Lotus and other software products.
' integrating other Lotus products such
as GraphWriter [1 and Manuscript to
make them more valuable when work-
ing with 1-2-3.
? Continuing to extend spreadsheet
products with add-ins developed using a
new programming facility called Lotus
nm Toolkit for release 3.0,
ihis strategy won't be easy to imple-

mefit and is unlikely to be totally ske.
cessful, but. there are indications that
during this highly dynamic period of
change, KJ zz paenenao itself to
successfully meet the ci! nd op-
portunities of the 190905. kom pele

The introduction of the Intel 286 mi.
zle rtu om Created the opportunity to

ud microcomputers that had the po-

a

sirih in a series

rections that Lo-

sheets. Unfortunately, an enhanced op-
erating system for this processor, OS/2,
was not yet available, making it impos-
sible to take full advantage of the mi-
croprocessor's power. Under OS/2, as
much as 16M bytes of memory can be
accessed. Until OS/2 is commonly in use,
the majority of users will expect soft-
ware products to operate in the limited
DOS environment.

For the vendor, this discontinuity in
hardware/software capabilities creates a
difficult marketing problem. Does the
vendor develop highly funetional soft:
ware products (reguiring the capabili-
ties of OS/2) and sell them to a small
but growing market? Or does the vendor

' Apple Computer Inc.s Macintosh has
achieved a market share of about 15
percent.

6 Approximately 25 percent of PCs are
currently networked. Expectations are
that within two years approximately 50
percent of PCs will be networked.

6 OS/2 is at least one year behind initial
projections for market penetration.

8 The Unix operating system is continu-
ing to gain acceptance as an environ-
ment for business computing.

Lotus resolved the problem of discon-
tinuity between hardware and soft.
ware by incorporating a DOS extender
from Rational Software in release 3.0.
DOS extenders (otherwise known as

strategy that have affected the delivery
of its new spreadsheet products. As soft-
ware has become more feature-laden,
limitations on memory size have forced
as much as 40 percent of the develop-
ment process to be consumed with opti-
mization of code.

Along with code, a reasonably sized
spreadsheet must fit within 640K bytes
in the DOS environment. This is a tech:
nical problem shared by all software de-
velopers and is one of the primary rea:
sons that applications developers seek
alternative operating systems.

Exacerbating this problem is an ele

ment of Lotus' strategy that places 1-2-3
on multiple platforms. Maintenance and
enhancements on a software product
this size, running on multiple platforms,
are almost impossible if the core code
modules are not in a platform-indepen-
dent common language.
To implement the multiplatform strat-
egy, it was necessary to develop the
new product in the C ze The re-
sulting increase in code size (vs. the
more compact Assembler implementa-
tion) along with the addition of new
features caused release 3.0 to exceed the
targeted memory limits and miss the an-
nounced delivery dates.
During the lengthy development pro-
S/2, DOS, DOS My cess of release 3.0, the microcomputer
Extenders; 286, 386 4%. —< —-/ // poka industry was not static. Despite the fact
| s aii SA 1-2-3/3.0 As that the operating system for the 286
BLO SR, ni aaa k ica chip is lagging far behind the hardware,
pred tions became larger and more corporate purchasers have moved guick-
complex, a shift lo 286 and 386 ly to the 286 with IM byte of memory
machines has occurred. as a standard for all new purchases.
ij Fewer than 20 percent of new sales
|. are of the older 8088 and 8086 ma-
- chines. It is estimat

How Spreadsheets Have Influenced Changes
In Hardware and Software

poroki 9o«
1-2-3/1A 1989
S r23wasa major reason  "«.;7,—.
for the initial popularity Osi /
of the IBM PC.

see (jj vem pc,
Expanded PC-DOS
Memory —
Specification

Apple li

Presentation Manager,
OS:

The future includes a ne
cross-platform strategy .—
wherein 1-2-3 will

reside on Ni po 4

multiple V

ur
udi

platforms. ——

UE zetio

personal computers.

Challenges to 1-2-3

Even with the product delays, com-
petitive threats, changing hardware en:
vironments and delayed operating sys-
tem availability, 1-2-3 continues to be
the best-selling spreadsheet in the world.
There are currently more individuals

MVS >.
—VM |

Minicomputer

oe
a
zm ča zom

m, mag m

a iii

Future Platforms

kom Avakan—"who use 1-2-3 that any other software
product.
PSE Lotus will continue to face tough mar-
Le e LI. A keting challenges and strong competitive
this highly dynamic o RAČUH BRIC:

threats, but the company is now better
eguipped to exploit more advanced com-
puting platforms, use improved operat-
ing systems and serve the future needs
of its huge customer base.

in the final article in this series next
week, Ill discuss personal information
managers, a new software category pio-
neered by the Lotus Agenda produtt,
that are used to manipulate text and
ideas. B

period of change, Lotus has positioned itself to successfully
meet the challenges and opportunities of the 1990s.

constrain the funectionality of the prod-
uct so that it will operate in the popular
DOS environment?

Lotus did not anticipate facing this di-
lemma during the development of re-
lease 3.0, but it was guickly discovered.

Lotus first announced release 3.0 on
April 27, 1987, The personal computer

protected-mode technology) can pro-
vide access to 16M bytes of memory
while still operating under the DOS en-
vironment.

— The figure outlines the major shifts in
hardware and operating systems, driven
to a large extent by the need to work
with spreadsheets.

To learn more about the subject of
these articles, please call The James

| Gi Raozjšea | Martin Report, an information service

market has always been unpredictable, — As these shifts occurred, investments updated guarterly, a (800) 242:1240

Robi uge projections have rarely in spreadsheet products, applications For information on seminars, please
fol see occurred since and training grew so large that solutions contact (in the United States and Can-

2 raloona AO have occurred since 1-2- — unable to protect these investments ada) Technology Transfer Institute,

(ooo Ze a Z anonetable la shori, 189 had 741 0th St, Santa Monica, Calif

$ The large base of 8088 and 8086 voven itseli so successfully and so thor- 90402 (213) 9394-8305. In Europe, con-

obno la ope lO aii Šale PE opora paputini cu... tad peli ž Nav St, Carnforih

nd 3 | in | SEN poznat doteka o WAL cha | " Imited Kinado
and 386 machines in 1989. There are two elements of Lotus' (A Da RBA United Kingdom
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