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IP: The Life of Compaq
From: David Farber <dave () farber net>
Date: Tue, 04 Sep 2001 17:19:12 -0400
From: "John F. McMullen" <johnmac () acm org> To: <farber () cis upenn edu> Subject: The Life of Compaq Date: Tue, 4 Sep 2001 16:48:43 -0400 I was very close to Compaq Computer Corporation, as both an observer and a journalist. in its early days and offer the following recollections as the firm is absorbed into Hewlett Packard. Barbara McMullen and I were both employees of Morgan Stanley (I was what was then called "Director of Data Processing" and Barbara was a Project Manager in the Systems area) when Ben Rosen was the Electronics Industry Analyst and the author of the "Morgan Stanley Electronic Letter". Shortly after Barbara and I left MS to form "McMullen & McMullen, Inc.", Ben also left and formed "Rosen Research" and began publication of the "Rosen Electronics Letter" (the forerunner of Esther Dyson's "RELease 1.0"). We stayed close to Ben, attending his Personal Computer Forums and beta-testing "1-2-3", the second product of one of Sevin-Rosen's early venture capital efforts, "Lotus Development Corp." When the IBM-PC was introduced, other firms immediately attempted to copy or clone its semi-open architecture (It had the BASIC kernel in ROM) with Columbia and Eagle being initial entrants. These companies were faced with two major problems: 1. It became apparent that they did not run the leading business program for the "PC", "1-2-3" because Lotus had bypassed the operating system to greatly enhance speed. The clone makers put their head in the sand and said "When Lotus conforms to the standard, it will run properly on our machine" 2. The IBM PC was sold by IBM's own stores, Sears, and Computer Land and certain large independents (Datel and SuperBusiness in New York and ComputerWorks in Westport, CT were some of the early ones). None of these stores carried the clones, leaving them to the second line stores ("Do you have that IBM-PC?" .. "Let me show you something even better -- a Columbia" .. "Ok .. and I'd like to see '1-2-3'" ... "Well, that doesn't run on the Columbia" .. "Well, then show me the IBM" .. "Well ,, ah .. we don't have them" ... door closing). Then along came Compaq, another Sevin-Rosen company. At the press conference, Ben and Compaq president Rod Canion introduced the Compaq Portable saying that "It would run all business software that runs on the IBM-PC (including, of course, the product from the other Sevin-Rosen company, Lotus Development). It will be our business to make it run all business software" They also announced that it would be carried in Sears and Computerland as well as by the major independents because "We are not in competition with IBM. Its make a wonderful machine but it really locked to a desktop and today's executives travel. We feel that executives and sales personnel will want to have both an IBM PC for the office and a Compaq portable for the road". I had one of the first two Compaq Portables in the New York area. When it arrived, I was on the way out to give a talk on personal computer. I picked it up and took it and some 1-2-3 diskettes with me and used it as a demo -- the first time that I ever had a computer of any size run (with no plug-ins other than the power cord) right out of the box. On the heels of the Compaq Portable came the Compaq Plus with a hard disk and Compaq became the first corporation in history to do $100 million of gross in its first year. Not long after that, Barbara and I went out to Houston for a preview of Compaq's first desk computer, the "Deskpro" with an 8086 processor. We did a cover story for "Computers and Electronics" (The successor to "Popular Electronics", the magazine that launched the personal computer age with Les Solomon's cover story on the "Altair") on the Deskpro which came out the day of the launch. At the launch's press conference, the Compaq leadership was tweaked with "We thought you weren't going to compete with IBM on the desktop" which became a perfect lead-in to "Well, we hadn't planned to but our portable users were demanding better performance than IBM was providing so we felt that we had to step in" While the Deskpro was a faster machine with nice features, the standard was still in the hand of IBM and it remained there through the next generation, the "AT" or 80286, but when Compaq became the first company to introduce an 80386-based machine, the standard passed, not to Compaq but to Microsoft. Compaq continued innovation with the ill-received "TeleCompaq" (I still have 2), the first PC to integrate telephony with a computer. While the market response was underwhelming, Compaq cut its losses early and moved on. When HP (with the HP Portable and Portable Plus) and Data General (the DG One) lead the industry into the Intel-based laptop area, Compaq help back and, when I queried Ben Rosen about its slow entry, he maintained that "We will wait until we can to it right and obtain a significant market" -- which it did. Compaq, with HP and Casio, jumped early into the Windows CE market and it "iPAQ" is a very impressive machine (and has non-compatible connections with the HP Jornada -- so we will look for a winner in one of the first foreseeable turf battles of the new firm). So now -- Lotus is part of IBM; Compaq is part of Hewlett-Packard; Computers & Electronic Magazine is no more; IBM is out of the retail desktop business and is the leading proponent of LINUX; ComputerLand, Datel, SupersBusiness, and ComputerWorks are no more ... and, in the words of Billy Pilgrim, "and so it goes" "When you come to the fork in the road, take it" - L.P. Berra "Be precise in the use of words and expect precision from others" - Pierre Abelard "Always make new mistakes" -- Esther Dyson John F. McMullen johnmac () acm org ICQ: 4368412 Fax: (603) 288-8440 http://www.westnet.com/~observer http://www.johnmac.net
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