Spreadsheets and Excel – the “open source” modelling tool

In my life I had alternated periods of time in which I used Excel. I always wondered why such a simple tool has became so successful among people and companies. I was struck with the idea that a spreadsheet is an “open source” modelling tool.

The building block of the spreadsheets is very simple: just some cells in which you type formulas. The nice thing about this – macros apart – is that whatever is being calculated, you can take a peek inside it. In this way, you can walk your way through the document and understand every detail of what’s being modeled.

Other modelling softwares are usually more powerful, but they require the user to study and have deeper knowledge of the tool. The user is required to understand the inner workings of each functionality and each command. It’s not just “open document, start exploring”.

Moreover, the cells enforce the Functional paradigm, so that a formula contains reference to other cells only. There is no concept of state, no “for” loops, no local variables that you have to store in your brain to understand what’s happening.

Another point is that there is a limited set of functions and operations that one can use. This narrows the complexity the model can have. It either must comply with what’s available – and eventualy trade off a better quality model for simplicity – or be modeled elsewhere, in more powerful tools such as Matlab. In this sense, a spreadsheet is a threshold for model simplicity.

So let’s praise the spreadsheets for their simplicity and success!