5 ms·

Two explanations, both in the article near the end. The first is the standard: > In a Quora thread that asked the question “Why did Digital Equipment Corporat

by aazaa 6y ago

Two explanations, both in the article near the end. The first is the standard: > In a Quora thread that asked the question “Why did Digital Equipment Corporation fail?” it was interesting to see so many previous DEC employees and members of the MIT community speak up about what they noted during their tenure there. Almost unanimously, they supported the theory—also commonly held by experts—that the failure of the company ultimately fell to the leaders who were unable to foresee what was coming in personal computing and were not able to take decisive or quick enough action in time to save the company. The second is the Innovator's Dilemma: > “Digital Equipment Corp. had microprocessor technology, but its business model could not profitably sell a computer for less than $50,000. The technology trapped in a high-cost business model had no impact on the world, and in fact, the world ultimately killed Digital. But IBM Corp., with the very same processors at its disposal, set up a different business model in Florida that could make money at a $2,000 price point and 20% gross margins—and changed the world.” The latter seems to fit better with the evidence. The timeline in the article makes it clear that DEC saw where things were headed and tried moving in those directions. But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. DEC didn't have the guts to go there.

khaledh 6y ago
Ken Olsen (DEC's co-founder) was quoted saying "There is no reason for any individual to have a computer in his home." He was openly skeptical of the desktop computers and thought of them as "toys" used for playing video games. It's a shame, because DEC had the engineering discipline to be successful in this market, if only they didn't dismiss it.
- ghaff 6y ago
  In fairness, that quote seems to have been in reference to having a "home computer" that controlled everything in the home which was a popular notion at the time and did not, in fact, come to pass. That said, DEC and others did not really recognize the shifting of the computing environment to horizontal layers from vertical stacks and the importance of compatibility. Even to the degree they introduced PCs, they didn't understand they played to an entirely different business model than minicomputers. (Source: I worked for Data General, a DEC offshoot, for over a decade.)
  - rvense 6y ago
    > In fairness, that quote seems to have been in reference to having a "home computer" that controlled everything in the home which was a popular notion at the time and did not, in fact, come to pass. Like an Intranet of Things?
    - ghaff 6y ago
      If you controlled dumb devices, including all your appliances, from a single centralized computer. Things like Alexa, Nest, and some light bulbs notwithstanding, it's all still mostly gadget gee-gaws rather than any kind of truly useful home control.
wombatmobile 6y ago
> But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. IBM didn't do "have the guts" to do that either. The IBM PC was a skunkworks project by a team of 12 lead by Don Estridge in Boca Raton Florida. The reasons for its success can be seen, in hindsight, to be a consequence of its lack of internal funding and status within IBM, which had a business model focussed on leasing mainframes to large corporate customers. IBM didn't have resources to develop custom hardware or to write software for the PC. Estridge's team used off the shelf chips including Intel's 8088 cpu. To make it easy for 3rd party developers to support the system, IBM published the BIOS source code. This had the effect of making it possible for Taiwanese manufacturers to clone the PC and sell cheap copies. DEC had no matching ecosystem. Its Rainbow 100 sold for $4K whilst IBM PC clones sold for $1K. The killer apps for the first generation of PCs were word processing and spreadsheets. PC's could perform word processing better than minicomputers, and spreadsheets were invented on PC's with VisiCalc and then later, Lotus 1-2-3. Consequently, IBM and the Taiwanese clones, the best known example of which was Dell Computers, were able to sell PC's into corporate accounts where IT managers would allow them to take the burden off mainframe data-processing systems by performing the personal office tasks which mainframes and minis couldn't efficiently do.
- WalterBright 6y ago
  > Its Rainbow 100 sold for $4K whilst IBM PC clones sold for $1K. The Rainbow also requires special floppy disks that cost $5 each instead of a buck, with zero difference in performance or capacity. DEC-aficionados I knew literally laughed at this and shook their heads, and abandoned DEC.
  - deleted 6y ago
    [deleted]
  - wombatmobile 6y ago
    https://en.wikipedia.org/wiki/Rainbow_100 https://en.wikipedia.org/wiki/Rainbow_100 The floppy disk drives, known as the RX50, accepted proprietary 400 kB single-sided, quad-density 5¼-inch diskettes. Initial versions of the operating systems on the Rainbow did not allow for low-level formatting, requiring users to purchase RX50 media from Digital Equipment Corporation. The high cost of media ($5 per disk) led to accusations of vendor "lock-in" against Digital. However, later versions of MS-DOS and CP/M allowed formatting of diskettes. Of note was the single motor used to drive both disk drives via a common spindle, which were arranged one on top of the other. That meant that one disk went underneath the first but inserted upside-down. This earned the diskette drive the nickname "toaster". The unusual orientation confused many first-time users, who would complain that the machine would not read the disk.
WalterBright 6y ago
Eh, my Heathkit H-11 (circa 1980) cost about the same as an IBM PC.
- JPLeRouzic 6y ago
  But it had only 4K words (8Kbytes) isn't?
  - WalterBright 6y ago
    I expanded it to the full 64K.
_8ljf 6y ago
“But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. DEC didn't have the guts to go there.” See also Kodak (invented the digital camera in 1975!), Xerox (We’re a photocopier company! We sell photocopiers!), Microsoft (owned the entire global PC market for damn near 20 years—till Apple overnight redefined what “Personal Computing” meant). All caught out while sitting atop their laurels. The only thing today’s successful product is good for is funding the development of tomorrow’s—because if you don’t disrupt yourself first then sooner or later your rivals will do it for you, and then it’s already far too late to do anything about it.
- hhas01 6y ago
  See also: “IBM and the Seven Dwarfs”. Sure BUNCH had some really cool tech, but it was IBM who understood how to make great product.

by aazaa 6y ago

khaledh 6y ago

Ken Olsen (DEC's co-founder) was quoted saying "There is no reason for any individual to have a computer in his home." He was openly skeptical of the desktop computers and thought of them as "toys" used for playing video games. It's a shame, because DEC had the engineering discipline to be successful in this market, if only they didn't dismiss it.

ghaff 6y ago
In fairness, that quote seems to have been in reference to having a "home computer" that controlled everything in the home which was a popular notion at the time and did not, in fact, come to pass. That said, DEC and others did not really recognize the shifting of the computing environment to horizontal layers from vertical stacks and the importance of compatibility. Even to the degree they introduced PCs, they didn't understand they played to an entirely different business model than minicomputers. (Source: I worked for Data General, a DEC offshoot, for over a decade.)
- rvense 6y ago
  > In fairness, that quote seems to have been in reference to having a "home computer" that controlled everything in the home which was a popular notion at the time and did not, in fact, come to pass. Like an Intranet of Things?
  - ghaff 6y ago
    If you controlled dumb devices, including all your appliances, from a single centralized computer. Things like Alexa, Nest, and some light bulbs notwithstanding, it's all still mostly gadget gee-gaws rather than any kind of truly useful home control.

wombatmobile 6y ago

> But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. IBM didn't do "have the guts" to do that either. The IBM PC was a skunkworks project by a team of 12 lead by Don Estridge in Boca Raton Florida. The reasons for its success can be seen, in hindsight, to be a consequence of its lack of internal funding and status within IBM, which had a business model focussed on leasing mainframes to large corporate customers. IBM didn't have resources to develop custom hardware or to write software for the PC. Estridge's team used off the shelf chips including Intel's 8088 cpu. To make it easy for 3rd party developers to support the system, IBM published the BIOS source code. This had the effect of making it possible for Taiwanese manufacturers to clone the PC and sell cheap copies. DEC had no matching ecosystem. Its Rainbow 100 sold for $4K whilst IBM PC clones sold for $1K. The killer apps for the first generation of PCs were word processing and spreadsheets. PC's could perform word processing better than minicomputers, and spreadsheets were invented on PC's with VisiCalc and then later, Lotus 1-2-3. Consequently, IBM and the Taiwanese clones, the best known example of which was Dell Computers, were able to sell PC's into corporate accounts where IT managers would allow them to take the burden off mainframe data-processing systems by performing the personal office tasks which mainframes and minis couldn't efficiently do.

WalterBright 6y ago
> Its Rainbow 100 sold for $4K whilst IBM PC clones sold for $1K. The Rainbow also requires special floppy disks that cost $5 each instead of a buck, with zero difference in performance or capacity. DEC-aficionados I knew literally laughed at this and shook their heads, and abandoned DEC.
- deleted 6y ago
  [deleted]
- wombatmobile 6y ago
  https://en.wikipedia.org/wiki/Rainbow_100 https://en.wikipedia.org/wiki/Rainbow_100 The floppy disk drives, known as the RX50, accepted proprietary 400 kB single-sided, quad-density 5¼-inch diskettes. Initial versions of the operating systems on the Rainbow did not allow for low-level formatting, requiring users to purchase RX50 media from Digital Equipment Corporation. The high cost of media ($5 per disk) led to accusations of vendor "lock-in" against Digital. However, later versions of MS-DOS and CP/M allowed formatting of diskettes. Of note was the single motor used to drive both disk drives via a common spindle, which were arranged one on top of the other. That meant that one disk went underneath the first but inserted upside-down. This earned the diskette drive the nickname "toaster". The unusual orientation confused many first-time users, who would complain that the machine would not read the disk.

WalterBright 6y ago

Eh, my Heathkit H-11 (circa 1980) cost about the same as an IBM PC.

JPLeRouzic 6y ago
But it had only 4K words (8Kbytes) isn't?
- WalterBright 6y ago
  I expanded it to the full 64K.

_8ljf 6y ago

“But there's a big difference between little experiments and betting the company on an auto-cannibalization strategy. DEC didn't have the guts to go there.” See also Kodak (invented the digital camera in 1975!), Xerox (We’re a photocopier company! We sell photocopiers!), Microsoft (owned the entire global PC market for damn near 20 years—till Apple overnight redefined what “Personal Computing” meant). All caught out while sitting atop their laurels. The only thing today’s successful product is good for is funding the development of tomorrow’s—because if you don’t disrupt yourself first then sooner or later your rivals will do it for you, and then it’s already far too late to do anything about it.

hhas01 6y ago
See also: “IBM and the Seven Dwarfs”. Sure BUNCH had some really cool tech, but it was IBM who understood how to make great product.