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April 27, 1994

BONFIRE OF THE VAXITIES: AVOIDABLE MISTAKES THAT TOOK DEC FROM PENTHOUSE TO GUTTER

By CBR Staff Writer

However did Digital Equipment Corp, for a few painfully short years the most successful company in the computer industry once IBM Corp started to keel over, get itself into the mess it is in today? The answer is that over a five-year period that started about seven years ago, it made enough mistakes to finish off a weaker company. Like IBM, it failed to see the damage personal computers would do to its core business, and unlike IBM, it consistently failed to get personal computers right. Yet there was a Perils of Pauline with one bound he was free solution not simply conceivable but actually available and on offer to resolve that critical problem for DEC at a stroke.

Upstart schoolboy

Seeing IBM’s personal computer standard and above all Microsoft Corp and its software as the threatening enemy, John Sculley at the end of the 1980s was looking for an alliance that would ensure the survival of Apple and bring its renegade Macintosh environment the respectability it needed in the all-important business world, where it was having such a hard time winning hearts and minds. At the beginning of 1988, DEC and Apple were to share a platform for a series of announcements heavily trailed ahead of time that it would set the entire industry back on its heels. When the great day dawned, it became clear that something had gone disastrously wrong: a few dull little announcements of tools and interoperability offerings were made, but DEC founder Ken Olsen went out of his way to make it clear that Apple was only one of many alliances and accomodations DEC would make – and was far from being the most important. Instead of being first among equals at the event, Apple chief John Sculley was treated as an upstart schoolboy. First glaring missed opportunity. The VAX was at the time flying about as high as any computer family ever had, and was widely regarded as being everything that IBM’s MVS mainframes weren’t in terms of usability, upgradability, price-performance. With Macintosh being blessed as the preferred terminal for the VAX, with interoperability built in, and all the user interfaces and tools with which VAX users were familiar, intimately integrated with the Macintosh user interface, IBM, which already had problems of its own, would have trembled – and might even have started really putting its own house in order much sooner and started building hardware and software into every PS/2 so as to make them the ideal terminals for AS/400 and MVS – and actually justifying the premium that IBM’s users were expected to pay for IBM personal computers over clones. Amazingly, John Sculley bore much less malice towards a company that had treated him so dismissively than might reasonably have been expected, and a year or three later, he was back again at Maynard actually shopping Apple to DEC. At that time, DEC’s share price was still high enough that the company could have bought Apple without its shareholders blanching, overnight turning itself into a $20,000m-a-year company and putting it well onto the road to its then target of overhauling IBM to take the number one slot in the not-too-distant future. There would be no serious anti-trust considerations, because DEC’s repeated failures in personal computers meant that it was scarcely a player at all.

Vacuous essays

Apple would today be using the Alpha RISC instead of the PowerPC, and prople would be writing vacuous essays about the threat to Intel Corp posed by this super-powerful new RISC from Massachusetts. Second – almost incomprehensible – mistake. The third mistake had already been made: DEC had failed to recognise the importance of RISC architecture until it was too late, and its first, half-hearted attempt to design one of its own had been killed – and even today, it is not clear that the part then being designed was fatally flawed. Once the thing had been canned, DEC began to fear that the Unix workstation really was going to rule its traditional roost with the tecchies who were always DEC’s earliest customers, so in a panic, DEC did a deal with the then MIPS Computer Systems In

c for the R-series, and came out with its line of MIPStations as a desperate stop-gap while it got a new RISC designed. But it managed to screw that one up completely – instead of making its own versions of the R-series bi-endian, it simply switched the byte-ordering to that of the VAX, which meant that none of the MIPS software already written would run, which in effect meant that there were no applications for the things. Not surprisingly, the machines were not very successful. The fourth mistake was to treat its customers with contempt. There can hardly have been a DEC user from 1985 onwards that was not seriously considering a switch to Unix, but instead of treating their deliberations with respect regardless of how it felt privately about Unix, DEC, in the person of Ken Olsen, went around dismissing Unix as snake oil and Russian trucks: it was extremely funny at the time, but the joke was soon on the poor DEC sales force as DEC users decided that as they wanted Unix, they’d better switch to a firm that actually believed in it.

Bastardy

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At the time DEC killed its first RISC effort, the momentum behind VAX and VMS was sufficient that the company could have safely relied on the VAX base moving to the new processor architecture provided it worked at all, and DEC could have embarked on the long process of slowly converging VMS and Unix, following the example that was already beginning to work so well for Hewlett-Packard Co. Instead it hitched its belated star to the benighted OSF/1 from the Open Software Foundation – formed and financed by DEC and IBM with the specific intention of neutralising the threat from Unix by dividing the community and ruling. By stubbornly sticking with OSF/1, fatally compromised by the bastardy of its birth, DEC was simply telling users that despite all evidence to the contrary, it still didn’t really believe in Unix. Mistake number five may well turn out to be backing Windows NT after having seen how ruthlessly Microsoft ditched OS/2 once it saw that the thing was not going to fulfill its promise or Microsoft’s expectations. What future now for DEC? It is too big simply to fade away, but the best it can hope for now is to be as successful as Unisys Corp has been over the past five years. It has to look forward to painful and accelerating attrition of its VAX base, with endless false dawns followed by disappointment, and the likelihood that it will be overtaken by several upstart rivals, with Compaq Computer Corp likely to be the first, and Apple likely to be not too far behind. And all the time there will be the nagging feeling that it didn’t have to be that way.

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