Microsoft Excel: The Program's Designer Reveals The Secrets Behind The Software That Changed the World 25 Years Ago

In a year when big names from the digital realm profoundly affected the world—Mark Zuckerberg or Julian Assange, take your pick—it's appropriate to add one more: Douglas Klunder. While largely unnoticed, 2010 marked the 25th anniversary of perhaps the most revolutionary software program ever, Microsoft Excel, and Klunder, now an unassuming attorney and privacy activist for the American Civil Liberties Union in Washington state, gave it to us.

These days, with daily life so intertwined with the digital world, it isn’t hard to acknowledge the ramifications of a Facebook or a WikiLeaks. Back in 1985, though, most folks still couldn’t understand why they’d want a personal computer (“Maybe I can keep my recipes on it?”), let alone contemplate how software might alter the course of human events. Reagan was in the White House, Wham! had the year’s top song (“Careless Whisper”), and Microsoft had yet to go public.

Yet if you had to pick a technological development that has fundamentally altered society, you could do worse than Excel. Sure, PowerPoint gets all the laughs for its clichéd role in the corporate environment. But Excel is the program that has launched thousands of startups and justified millions of layoffs, planned out household budgets and charted the course for complex securities that almost took down the economy. For better or worse, it is the software that has given everyone the means to play with numbers and ask, “What if?”

For Doug Klunder, the mission 25 years ago wasn’t so grandiose. As lead developer of Excel, he was handed the job of vaulting Microsoft—then known best for MS-DOS, the operating system in IBM’s PCs—to the forefront in business applications. “We decided it was time to do a new, better spreadsheet,” recalls Klunder, now 50, who joined Microsoft straight out of MIT in 1981 (part of the interview process included lunch with Bill Gates and Steve Ballmer at a Shakey’s pizza parlor).

The electronic spreadsheet was essentially invented in 1979 by software pioneer Dan Bricklin, who started up Software Arts with Bob Frankston and created VisiCalc. The technology took a huge next step in 1983 when Mitch Kapor’s Lotus Development Corp. rolled out Lotus 1-2-3, which integrated charts and spreadsheets in the same program. Soon IBM PCs, loaded with Microsoft’s MS-DOS and Lotus 1-2-3, were pushing aside mainframe terminals in corporate offices.

Microsoft already had its own spreadsheet, Multiplan, but lagged in sales behind 1-2-3. And so Klunder and a small team sequestered themselves in the Red Lion Hotel in Bellevue, Washington, for three days of meetings to plan out what Excel would look like. The group included Klunder’s friend Jabe Blumenthal, who was to become the program manager, along with Charles Simoyni—a Microsoft executive who would eventually become a billionaire and two-time space tourist—and Gates himself. They had a big paper tablet on an easel for notes, but spent most of the time arguing back and forth about how best to respond to 1-2-3, Klunder recalls.

With Excel already behind schedule, the decision was made to switch to Mac—a tumultuous change that prompted Klunder to leave Microsoft temporarily.

“There were two things that were the overriding goals,” Klunder says. “One was simply loading it up with features. The other—looking back know, it sounds kind of crazy. But at the time it was major. Speed, and speed of recalculation.” Those early PCs couldn’t crank through numbers the way today’s powerhouse machines can, with the result that changing a number in a spreadsheet could bring things to a halt while the change rippled through all the interconnected calculations.

Klunder and his team came up with “intelligent recalc,” an approach where the program updated only the cells affected by the data change rather than all the formulas in the spreadsheet. Klunder credits Gates with the idea for how to implement the feature—though he says Gates eventually told him he hadn’t implemented what he had in mind at all. Klunder thinks Gates misremembered the discussion, but adds, “Maybe he actually did have a more brilliant idea that now is lost forever.”

At the outset, the entire Excel development team was three people, and Klunder estimates he wrote a third of the original code himself. Before the program was done, that group had grown to nearly a dozen—still a far cry from the hundreds of developers teamed together on big applications today.

But Microsoft was a much different place then. Its IPO was still some months away; the Microsoft millionaires hadn’t yet been minted. (Klunder says the records aren’t clear, but he figures he was somewhere between employee No. 45 and No. 65.) When Excel kicked off, Microsoft, which today fills a corporate campus of dozens of buildings in Redmond, Washington, could still fit in one building (making it possible for Gates to drop by all parts of the operation). “The whole concept of him as the big boss was not nearly as much in play,” Klunder remembers. “This was before Microsoft went public. In many ways he was just one of the guys.”

The location was known simply as the Northup building on Bellevue’s Northup Way, and all the developers had private offices—some with windows, some on the inside. Klunder recalls voluntarily giving up his window office. “I was literally living in my office, sleeping just a few hours a night and cranking out code around the clock, and the window office got too cold at night.”

Odd as it might seem now, that first version of Microsoft Excel was designed for the Apple Macintosh. Originally it was to be a DOS program, but the industry was moving to graphical interfaces—the Mac had debuted in 1984, while Microsoft would introduce the first Windows late in 1985. With Excel already behind schedule, the decision was made to switch to Mac—a tumultuous change that prompted Klunder to leave Microsoft temporarily. “It caused a bit of a problem when I left in the middle,” he recalls. “Rather than trying to write everything down, I presented what was essentially a three-day lecture on Excel’s design … that was videotaped for reference.” Fortunately for the project, he returned.

Endless “beta” versions and elaborate testing procedures were still in the future. Microsoft had announced Excel earlier in 1985, promising a ship date of Sept. 30. Racing to meet that commitment, Klunder and his team worked late into the night on Sept. 29 and into the earlier hours of Sept. 30. “We were doing our last bug tests. We made our master disk and my boss drove to the disk duplicator to get it into a few stores so we could say we made our Sept. 30 date.”

While preparing the disks in the middle of the night, someone had the idea of changing the time stamp on the computer to disguise how close they were cutting their deadline. Then someone else loaded a copy of Lotus 1-2-3 and saw that it too had been finished in the wee hours of the morning, Klunder says.

They worried greatly about making the program error-free. “Even being kids and mainly doing what’s cool, we still had some awareness that people were putting in real dollar values [into spreadsheets]. The thing we thought could kill Excel and the future or spreadsheets was a math error,” Klunder says.

Looking at Excel today, despite the many changes and elaborate features that have been added over the years, Klunder still sees the foundation that he and his teammates worked on. He says he doesn’t necessarily notice things he wishes he had changed. “It’s more some of the things we threw in that I look at and wonder, why did we bother?” For instance, he says, some of the options in the “Paste Special” function still seem obscure. “We did them because it seemed really cool that we could,” he says.

Klunder went on to other roles, including lead developer of Microsoft Money, the personal-finance program. But by 1992, he was ready to move on. Long interested in how technology was affecting personal privacy, he began volunteering for the ACLU. “After a few years of that, people started assuming I was a lawyer. So I decided, what the heck, I’ll be a lawyer.” He earned a law degree from the University of Washington and has remained active on the privacy scene ever since.

“I thought it was pretty obvious early on the danger presented by technology and computing in terms of losing our privacy. I always had somewhat of a love-hate relationship with technology, and I still do,” Klunder says. On balance, though, he sees the personal-computing revolution as positive for privacy. “Prior to that, it was only large entities with technology. So at least there’s something of a level playing field. But now as we move to the cloud, all that may be reversing,” he says.

As for Excel, Klunder still considers it a powerful tool. But he harbors no illusions about how it can be abused. “It’s the same thing with PowerPoint—Excel lets things look professional, and people assume there’s substance behind it.”

Thomas E. Weber covers technology for The Daily Beast. He is a former bureau chief and columnist at The Wall Street Journal and was editor of the award-winning SmartMoney.com. Follow him on Twitter.