WhereIsAtlas · Software

Lotus Development

The company whose 1-2-3 spreadsheet made the IBM PC worth buying, sold to IBM for $3.5 billion in 1995 — with the brand retired in 2012 and Notes, Domino and Sametime now run by HCL

Defunct — Lotus Development Corporation was an American software company founded in 1982 in Cambridge, Massachusetts, by Mitch Kapor and Jonathan Sachs. Its Lotus 1-2-3 spreadsheet became the killer application of the IBM PC, and its later groupware product, Lotus Notes, was valuable enough that IBM bought the whole company in July 1995 for $3.5 billion. IBM maintained the business as Lotus Software until around 2012, when it announced it was dropping the Lotus brand; support for the last version of Lotus 1-2-3 and the rest of Lotus SmartSuite ended on 30 September 2014. IBM sold the Notes and Domino business to HCL Technologies in a deal announced on 6 December 2018 for $1.8 billion, and HCL completed the transfer of that and six other products in July 2019. Notes, Domino and Sametime are still developed and sold by HCL Software.

Lotus Development Corporation was founded in 1982 by Mitch Kapor and Jonathan Sachs, with backing from the investor Ben Rosen, and based in Cambridge, Massachusetts. Kapor had been head of development at VisiCorp, the distributor of VisiCalc, and had sold his rights to VisiPlot and VisiTrend before leaving [1].

Lotus shipped its first spreadsheet on 26 January 1983. The name 1-2-3 described three functions — spreadsheet, graphing tool and database manager — though in practice the first was what mattered. IBM and VisiCorp had an arrangement under which VisiCalc was shipped with the IBM PC, but 1-2-3 was the more powerful product, and it became the reason many businesses bought a PC at all [1].

The commercial result was immediate and extreme. Lotus became the world's third-largest microcomputer software company in 1983 with $53 million of sales in its first year, against a business plan that had forecast $1 million. The company filed for an initial public offering that October. Jim Manzi, who arrived in 1982 as a McKinsey consultant and became an employee four months later, was named president in October 1984, chief executive in April 1986 and chairman that July, and ran Lotus until 1995 [1].

The 1980s were a period of dominance and failed diversification. Lotus bought Software Arts in 1985 and discontinued VisiCalc, the program 1-2-3 had displaced. It shipped Symphony in 1984 and the Macintosh suite Jazz in 1985, and Jazz failed badly commercially. By the middle of the decade Forrester Research grouped Lotus with Ashton-Tate, Microsoft and Borland as the "Big Four" of personal computer software, and Computer Intelligence estimated that in 1987 Lotus held 85 per cent of the Fortune 1000 market for PC financial analysis, with Microsoft second at 6 per cent [1].

Lotus's most consequential legal strategy also dates from 1987. The company sued Paperback Software and Mosaic over their cheap clones of 1-2-3, and sued Borland over its Quattro spreadsheet. Both Paperback and Mosaic lost and went out of business. Borland won, and survived [1][2]. The case was watched closely enough that Richard Stallman founded the League for Programming Freedom in response to Lotus's position and held protests outside the company's offices [1].

The most valuable thing Lotus ever owned was not a spreadsheet. In 1984 it made a founding investment in Iris Associates, the company founded by Ray Ozzie that was building a product combining email and groupware. Lotus brought Notes to market in 1989, acquired cc:Mail in 1991 to reinforce its messaging business, and bought Iris outright in 1994. Notes took business away from mainframe-era products such as IBM OfficeVision — which is the reason IBM came calling [1].

IBM launched a hostile tender offer in the second quarter of 1995 at $60 a share when Lotus stock was trading at $32. Manzi sought a white knight and forced IBM up to $64.50 a share, a $3.5 billion buyout completed in July 1995. Manzi announced his resignation on 11 October 1995, leaving with stock worth $78 million [1].

Under IBM the division kept its own brand for years. A restructuring in January 2001 moved marketing and management functions from Cambridge to IBM's New York office; the Lotus.com website progressively dropped references to Lotus Development Corporation and then to Lotus itself, redirecting to IBM's software site from 2008 and dropping the Lotus name entirely in 2012 in favour of IBM Collaboration Solutions [1].

Lotus's desktop suite had already faded. Lotus SmartSuite — 1-2-3, Word Pro, Freelance Graphics, Approach and Organizer, several of them bought in during the 1990s — was bundled cheaply with PCs and may initially have outsold Microsoft Office, but Lotus was late delivering 32-bit applications for Windows 95, largely because it had concentrated development on OS/2. The last significant release was the SmartSuite Millennium Edition in 1999; new development ended in 2000 and ongoing maintenance moved overseas [1].

IBM announced in 2012 that it was discontinuing Lotus Symphony and donating the code to Apache OpenOffice, and that it was dropping the Lotus brand. IBM Notes and Domino 9.0 Social Edition, announced on 13 March 2013, replaced the "IBM Lotus" branded products and marked the end of Lotus as an active brand [1]. IBM's withdrawal notice covering Lotus SmartSuite, Lotus Organizer and Lotus 1-2-3 ended support for all three on 30 September 2014 [1][6].

The products themselves were sold rather than closed. On 6 December 2018 IBM announced the sale of Notes and Domino to HCL Technologies for $1.8 billion. HCL completed the acquisition of seven IBM products in July 2019 — AppScan, Unica, Commerce, BigFix, Notes and Domino, Connections and Portal — and created a division, HCL Software, to run them [1][5].

Sametime went the same way. The instant messaging and web conferencing product that Lotus built from DataBeam and Ubique technology in the late 1990s had been sold by the Lotus Software division of IBM until 2019; it is now HCL Sametime Premium, developed and sold by HCL Software, with version 12.0.3 released on 17 June 2025 [3].

Where the name stands. Lotus 1-2-3 is gone: no version has shipped since 2014 and no vendor supports it. Notes and Domino continue under an HCL name. The Lotus brand itself is not in use [1][4].

Timeline

  1. 1982 — Lotus is founded: Mitch Kapor and Jonathan Sachs start the company in Cambridge, Massachusetts, with backing from Ben Rosen. (Cambridge, Massachusetts)
  2. 26 Jan 1983 — Lotus 1-2-3 ships: The spreadsheet, graphing and database program goes on sale; first-year sales reach $53 million against a $1 million forecast.
  3. Oct 1983 — The flotation: Lotus files for an initial public offering.
  4. 1984 — Iris Associates: Lotus makes a founding investment in Ray Ozzie's company, which will build Notes.
  5. 1985 — VisiCalc is bought and retired: Lotus buys Software Arts and discontinues VisiCalc, the program 1-2-3 displaced.
  6. Apr 1986 — Manzi takes over: Jim Manzi becomes chief executive, succeeding Mitch Kapor, and chairman that July.
  7. 1987 — The look-and-feel campaign: Lotus sues Paperback Software and Mosaic over clones of 1-2-3, and Borland over its Quattro spreadsheet.
  8. 1989 — Lotus Notes: The groupware product reaches the market.
  9. 2 Jul 1990 — The Borland case: Lotus files a copyright suit in the District of Massachusetts over the Quattro Pro menu structure. (Boston)
  10. 1991 — cc:Mail: Lotus buys the email product to strengthen its messaging business.
  11. 1994 — Iris is acquired: Lotus buys the company that built Notes, the product IBM will want.
  12. Jul 1995 — IBM buys Lotus: After a hostile $60-a-share tender offer, IBM pays $64.50 a share, or $3.5 billion.
  13. 11 Oct 1995 — Manzi resigns: The chief executive leaves the company that is now an IBM division, with stock worth $78 million.
  14. 16 Jan 1996 — The Borland case ends in a tie: The Supreme Court affirms the First Circuit's ruling for Borland by an equally divided court, setting no national precedent. (Washington, D.C.)
  15. 2000 — SmartSuite development ends: New development of the office suite stops; maintenance moves overseas.
  16. 2003 — Renamed Lotus Software: IBM restyles the division; the brand is progressively folded into IBM's own over the next decade.
  17. 2012 — IBM drops the Lotus brand: IBM announces it is retiring the name, and ends Lotus Symphony development, donating the code to Apache OpenOffice.
  18. Mar 2013 — The last Lotus release: IBM Notes and Domino 9.0 Social Edition replaces the IBM Lotus branded products.
  19. 30 Sep 2014 — Support ends: IBM withdraws support for Lotus SmartSuite, Lotus Organizer and Lotus 1-2-3.
  20. 6 Dec 2018 — HCL buys Notes and Domino: IBM announces the sale of the business to HCL Technologies for $1.8 billion.
  21. Jul 2019 — HCL Software: HCL completes the transfer of seven IBM products and creates a division to run them.
  22. Jun 2025 — Sametime still ships: HCL Sametime Premium 12.0.3 is released.

Quick facts

Founded
1982, Cambridge, Massachusetts
Founders
Mitch Kapor and Jonathan Sachs, backed by Ben Rosen
Lotus 1-2-3
released 26 January 1983
First-year sales
$53 million, against a business plan forecast of $1 million
Chief executive
Jim Manzi, president from 1984, CEO from 1986, chairman from 1986, gone by October 1995
The look-and-feel cases
Paperback Software and Mosaic lost and closed; Borland won and survived
Lotus Notes
brought to market in 1989, developed by Ray Ozzie's Iris Associates
IBM's first offer
$60 a share, against a market price of $32
The price paid
$64.50 a share, or $3.5 billion, in July 1995
Renamed
Lotus Software in 2003
Brand retired
announced in 2012; IBM Notes and Domino 9.0 Social Edition in March 2013 ended the "IBM Lotus" naming
SmartSuite support
ended 30 September 2014, alongside Lotus Organizer and Lotus 1-2-3
Notes and Domino
sold to HCL Technologies, announced 6 December 2018 for $1.8 billion
Transfer completed
July 2019, along with six other IBM products, into a new HCL Software division
Sametime today
HCL Sametime Premium, most recently version 12.0.3 in June 2025

Lineage — where the name went

A spreadsheet that sold the IBM PC, a groupware product that IBM paid $3.5 billion for, and the pieces that ended up with HCL — the lineage of Lotus Development.

  1. 1982 — Mitch Kapor founded Lotus Development Corporation (with Jonathan Sachs and backing from Ben Rosen)
  2. 1982 — Jonathan Sachs founded Lotus Development Corporation (co-founder and author of the first spreadsheet)
  3. Mitch Kapor served under VisiCorp (head of development before leaving to found Lotus)
  4. 1983 — Jonathan Sachs created Lotus 1-2-3 (released on 26 January 1983)
  5. 1983 — Lotus Development Corporation created Lotus 1-2-3 (the product that made the IBM PC a business machine)
  6. 1985 — Lotus Development Corporation acquired Software Arts (the maker of VisiCalc)
  7. Software Arts created VisiCalc (the first spreadsheet program)
  8. 1984 — Lotus Development Corporation created Iris Associates (a founding investment in Ray Ozzie's company)
  9. 1984 — Ray Ozzie founded Iris Associates (the developer of the groupware product)
  10. 1989 — Iris Associates created Lotus Notes (Lotus brought Notes to market in 1989)
  11. Jim Manzi served under Lotus Development Corporation (president from 1984; chief executive and chairman from 1986)
  12. 1996 — Lotus Development Corporation defeated Lotus Development Corp. v. Borland International (the First Circuit's ruling for Borland stood on a 4–4 tie)
  13. 1990 — Borland created Lotus Development Corp. v. Borland International (the case over the Quattro Pro menu structure, filed 2 July 1990)
  14. Lotus Development Corporation created Lotus SmartSuite (an office suite assembled by buying in Ami Pro, Approach and Organizer)
  15. 1995 — IBM acquired Lotus Development Corporation (hostile tender at $60 a share, settled at $64.50 for $3.5 billion)
  16. 2019 — HCL Technologies acquired Lotus Notes (one of seven IBM products transferred to HCL)
  17. 2019 — HCL Technologies acquired Sametime (still developed and sold as HCL Sametime Premium)
  18. 2019 — HCL Technologies was parent of HCL Software (the division created to run the former IBM products)
  19. 2019 — IBM created HCL Software (the unit formed when IBM sold the products)

Entities in this tree: Lotus Development Corporation (company, 1982); Mitch Kapor (person); Jonathan Sachs (person); VisiCorp (company); Lotus 1-2-3 (product, 1983); Software Arts (company); VisiCalc (product); Jim Manzi (person); Iris Associates (company); Ray Ozzie (person); Lotus Notes (product, 1989); Lotus SmartSuite (product); Borland (company); Lotus Development Corp. v. Borland International (event, 1996); IBM (company); HCL Technologies (company); Sametime (product); HCL Software (company, 2019)

Sources

  1. Lotus Development — Wikipedia (2026-09-20) ↩
  2. Lotus Development Corp. v. Borland International, Inc. — Wikipedia (2026-09-20) ↩
  3. HCL Sametime — Wikipedia (2026-09-20) ↩
  4. So farewell then Lotus 1-2-3, spreadsheet extraordinaire — ZDNet (2026-09-20) ↩
  5. HCL Technologies completes acquisition of IBM Products — TechGig (2026-09-20) ↩
  6. Software withdrawal and discontinuance of support: Lotus SmartSuite, Lotus Organizer and Lotus 123 — IBM (2026-09-20) ↩

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