IP: The Life of Compaq

[David Farber <dave@farber.net>]

>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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