Microsoft originally marketed a spreadsheet program called Multiplan in 1982, which was very popular on CP/M systems, but on MS-DOS systems it lost popularity to Lotus 1-2-3. This promoted development of a new spreadsheet called Excel which started with the intention to, in the words of Doug Klunder, 'do everything 1-2-3 does and do it better' . The first version of Excel was released for the Mac in 1985 and the first Windows version (numbered 2.0 to line-up with the Mac and bundled with a run-time Windows environment) was released in November 1987. Lotus was slow to bring 1-2-3 to Windows and by 1988 Excel had started to outsell 1-2-3 and helped Microsoft achieve the position of leading PC software developer.

Excel offers a large number of user interface tweaks; however, the essence of UI remains the same as in the original spreadsheet, VisiCalc: the cells are organized in rows and columns, and contain data or formulas with relative or absolute references to other cells. Excel was the first spreadsheet that allowed the user to define the appearance of spreadsheets (fonts, character attributes and cell appearance). It also introduced intelligent cell recomputation, where only cells dependent on the cell being modified are updated, while previously spreadsheets recomputed everything all the time or waited for a specific user command. Excel has extensive graphing capabilities.