Part 10 - The Killer Application
By 1979 there were lots of microcomputers and a fair number of software programs, including word processing and accounting programs. The industry was somewhat standardized on an operating system - CP/M - although there were notable exceptions like Radio Shack and Apple, and the Apple II had emerged as an industry star, with its sound, graphics, and sleek design. But these programs duplicated what was already existing on mainframe and minicomputers, and in a horse race - micros really were out of the running.
What the industry needed was a Killer application - a software program that would let a microcomputer do something the other bigger computers couldn't do, and a MIT graduate named Dan Bricklin - came up with an idea. Dan already was a computer programmer, working on - you guessed it - DEC minicomputers - but when the microcomputer market began to happen, he realized that the people who used them would want powerful but simple to use business-oriented programs. He went back to graduate school at Harvard and came up with the idea of creating a program designed for generic business applications that would let people work with numbers on a microcomputer; build financial models, and have the computer do all the calculating. What will our profit be if we sell 10,000 gizmos at fifty cents each? What if our inventory expenses rise suddenly.
The concept was the traditional accounting worksheet with its rows and columns, except that everything would be magically hooked together - so that if a value in one row changed - any other values it effected would automatically be recalculated and changed. This would be a calculator program that would show you visibly onscreen the results - hence he named it Visicalc...
The market for it - was virtually every small business and corporation in the world. Even though big corporations had big computers, there was a tremendous backlog in submitting jobs and getting work back - weeks, months, even years. Rather than depending on centralized data processing departments, across the country thousands of corporate midmanagers were doing it themselves - working with traditional paper spreadsheets, penciling in amounts, changing, erasing, and using desktop calculators to create reports such as forecasts and budgets. Small business people were doing the same thing.
In actually writing the program, Dan Bricklin didn't even have his own microcomputer, but he met up with another Dan who was already writing and marketing micro software - Dan Fylstra - who felt they should write it for the industry star - the Apple II. They actually first wrote it using a procedure which should be familiar to those of you who have been following the series. Yes - using a DEC minicomputer they created an Apple II emulator program initially. Later, they wrote it on a real Apple II . In a few months they had a finished product designed specifically for Apple computers. The market response was incredible, because this was not just computer hardware and software - it was a complete business solution. Managers could buy an Apple II with Visicalc, bring it into their departments, and immediately increase their productivity. Budgets and forecasts that traditionally took weeks could now be done in hours.
Word spread so quickly and so many people recognized the productivity potential that people could walk into computer stores asking for a Visicalc system, as if it was all one thing. This was the true killer application that launched the industry - it appealed to virtually everyone - from the corporation - to small business - to home users. And you could buy the whole thing for only a couple thousand dollars - put it almost anywhere and learn it quickly - it was a small, portable, productivity system.
Visicalc was soon modified to run on other microcomputers, Radio Shack at first, then others. But the most significant point here is that people were buying a ready made solution and microcomputers were beginning to infiltrate American corporations by the thousands. This was a case of the tail wagging the dog - a hundred dollar piece of software was selling a two thousand dollar computer, and sales increased exponentially into the millions.
The industry had grown from hobbyists and long haired kids in garages into a business market generating serious money, and on the sidelines the world's largest computer company had been watching and studying it. Next week we'll learn how IBM planned to get a piece of the action, but ended up getting a whole lot more than they bargained for.
On to Segment 11, "IBM's Secret"
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