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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