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  1. Technology
July 1, 1987


By CBR Staff Writer

Rod Canion of Compaq, Bill Gates of Microsoft, and industry names from Lotus and Ashton-Tate are booked to share a New York stage on Monday to face an array of scrubb’d and eager faces from the press and attempt to explain to them how the forthcoming OS/2 operating system from Microsoft will affect Personal Computer users. Hesh Wiener takes a decidedly dispeptic view of the prospect, and in this iconoclastic essay points out that despite its outstanding commercial success, Compaq in particular still seems to be held aloft by nothing more substantial than sky hooks.

Good selling is like good magic, explained a close friend and astute observer of the computer business. The magician not only must direct the attention of the audience in the proper direction, but also divert it from things that are best left unobserved. Currently, the personal computer business provides some excellent examples of marketing legerdemain, but the ultimate effect on the audience is yet to be measured. Acting as if one is Harry Houdini is quite a bit easier than being Harry Houdini, as a long line of marketing gurus from long-gone computer companies can testify.

Dusty steamer trunks

These erstwhile sales experts resemble nothing so much as the would-be master magicians who have disappeared without leaving a trace. The magicians, we suspect, are backstage at long-closed vaudeville houses, where their remains lie chained in dusty steamer trunks. The most notable bit of showmanship in the PC theatre of late is that presented with great aplomb and a good deal of expense by Compaq. These dog and pony shows spearhead an effort by the maker of luggable and desktop machines to maintain what it calls an industry standard. Industry standard, in the PC world, has come to mean the kind of computer IBM has grown tired of making, not, for example, the CP/M standard or S-100 bus standard that were rendered obsolete by the success of the quirky IBM PC. Despite its noble pretensions, Compaq is no more wedded to IBM’s former design decisions than IBM. The company only knows how to build one kind of computer, and it is interested in selling what it makes. All these machines are compatible with IBM’s old line of PCs, and sport 5.25 floppy disks. They run MD-DOS and, Compaq promises, they will run some version of OS/2 whenever it comes along. Whether Compaq’s machines will run OS/2 for free – or whether a Compaq owner will have to buy an additional handful of hardware – is left unsaid. This omission is part of the legerdemain. It is impossible to imagine that Compaq’s engineers are spending all their time developing machines that adhere to IBM’s old design standards. Unless the company’s management has taken leave of its senses, Compaq’s research and development crew is hard at work developing what will be a new generation of machines that can go head-to-head with IBM’s line. All that chief executive Rod Canion’s public histrionics mean is that Compaq is doing its best to stall for time. And so far, according to all the published accounts, this is working superbly well – see page 3. Compaq’s 286 machines, even the one designed to look like a portable sewing machine, are selling. The company’s 386 product is well ahead of IBM’s fastest PS/2. Yet one senses that if things were really looking so good for Compaq, its leaders would be back at the factory shouting for more production, not in draughty halls preaching sales slogans at sycophants in the press corps. Compaq’s leaders are correct in observing that the press would rather record the clever speeches of smooth and articulate millionaires than ferret out some useful insights that require a bit of work to present. What these businessmen have not reckoned with is the fickle nature of the hacks they have apparently mesmerised. At Compaq’s first slip, the press will be caught up in blood lust, compounding the company’s problems. In the meantime, however, things are holding together for Compaq, at least from a public relations perspective. Since its first computer was announced, Compaq has introduced quite a few d

ifferent models. Each is praised by the company’s followers, who have not pointed out that the rate at which Compaq’s new machines are put on the market (and at which old ones are withdrawn) has accelerated during the company’s brief history. Compaq’s marketing experts seem to have kept the audience from observing the trend, which, if continued, will soon have Compaq replacing its entire product line every 96 hours. By the fall, or possibly by the end of the year, Compaq will have to announce revisions to its line.


Whether some of these revisions can be shoehorned into current models is more important to users than to the manufacturer. What Compaq needs is a line that it can sell at very high profit margins and which can sit in an office in the company of IBM PS/2s with their smaller diskettes, built-in networking support, and spiffier displays. If Compaq fails to develop appropriate products, it will be forced to sell against cheaper old-style machines. And even those cloners are in a rush to imitate as much of the PS/2 as they can, which could, improbably, leave Compaq behind. In the meantime, of course, Compaq’s Canion and Microsoft’s Bill Gates are doing everything they can to keep even a single purchase of any PC from being delayed by uncertainty. The addition of billionaire Gates to the roster of performers at the magic show is even more disconcerting than would be Gates’ absence. While IBM has not yet revealed just how much it will add to OS/2 that other PC makers will have to imitate, Microsoft’s future growth is inextricably tied to the maintenance of no more than two herds. Either IBM’s products can be properly imitated by the horde of clonemakers or they cannot. If the former, then Microsoft and Compaq are safe; if the latter, as Ben Franklin pointed out in quite another context, the non-IBM makers will either hang together or most assuredly they will hang separately.

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