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151-480: The Epson Equity series of IBM Compatible Personal Computers was manufactured from 1985 until the early '90s by Epson Inc. Epson was well known for its dot matrix printers at the time and the Equity series represents their entry into the growing PC compatible market. The Equity I was the first system introduced, equipped with an Intel 8088 CPU and one or two 5.25" floppy disk drives . The original Equity I

302-448: A "MGA - Multi-Graphics Adapter" card, offering an Hercules compatible monochrome mode, and a new 160x200 eight colors mode. Epson bundled some utility programs that offered decent turnkey functionality for novice users. The Equity was a reliable and compatible design for half the price of a similarly-configured IBM PC. Epson often promoted sales by bundling one of their printers with it at cost. The Equity I sold well enough to warrant

453-472: A $ 50 billion company by the year 2000, or to beat I.B.M. – but they didn't have anything to do with customers. The new C.E.O. should look at everything Eckhard acquired and ask: did the customer benefit from that. If the answer isn't yes, they should get rid of it." On one hand, Compaq had previously dominated the PC market with its price war but was now struggling against Dell , which sold directly to buyers, avoiding

604-453: A $ 71 million loss for that quarter, their first loss as a company, while the stock had dropped by over two-thirds. An analyst stated that "Compaq has made a lot of tactical errors in the last year and a half. They were trend-setters, now they are lagging". Canion initially believed that the 1990s recession was responsible for Compaq's declining sales but insisted that they would recover once the economy improved, however Pfeiffer's observation of

755-535: A 32-bit operating system released during the 2000s can still operate many of the simpler programs written for the OS of the early 1980s without needing an emulator , though an emulator like DOSBox now has near-native functionality at full speed (and is necessary for certain games which may run too fast on modern processors). Additionally, many modern PCs can still run DOS directly, although special options such as USB legacy mode and SATA-to-PATA emulation may need to be set in

906-440: A chain of Mexican restaurants. Each invested $ 1,000 to form the company, which was founded with the temporary name Gateway Technology. The name "COMPAQ" was said to be derived from "Compatibility and Quality" but this explanation was an afterthought. The name was chosen from many suggested by Ogilvy & Mather , it being the name least rejected. The first Compaq PC was sketched out on a placemat by Ted Papajohn while dining with

1057-711: A commercial venture. Experience had shown that even if an operating system was technically superior to Windows, it would be a failure in the market ( BeOS and OS/2 for example). In 1989, Steve Jobs said of his new NeXT system, "It will either be the last new hardware platform to succeed, or the first to fail." Four years later in 1993, NeXT announced it was ending production of the NeXTcube and porting NeXTSTEP to Intel processors. Very early on in PC history, some companies introduced their own XT-compatible chipsets . For example, Chips and Technologies introduced their 82C100 XT Controller which integrated and replaced six of

1208-491: A computer capable of running programs that are managed by MS-DOS". The main reason why an IBM standard is not worrying is that it can help competition to flourish. IBM will soon be as much a prisoner of its standards as its competitors are. Once enough IBM machines have been bought, IBM cannot make sudden changes in their basic design; what might be useful for shedding competitors would shake off even more customers. In February 1984 Byte wrote that "IBM's burgeoning influence in

1359-558: A consumer PC manufacturer during April 2005, when it sold its laptop and desktop PC divisions ( ThinkPad / ThinkCentre ) to Lenovo for US$ 1.75 billion . As of October 2007, Hewlett-Packard and Dell had the largest shares of the PC market in North America. They were also successful overseas, with Acer , Lenovo , and Toshiba also notable. Worldwide, a huge number of PCs are " white box " systems assembled by myriad local systems builders. Despite advances of computer technology,

1510-531: A few percentage points of market share was Apple Inc. 's Macintosh . The Mac started out billed as "the computer for the rest of us", but high prices and closed architecture drove the Macintosh into an education and desktop publishing niche, from which it only emerged in the mid-2000s. By the mid-1990s the Mac's market share had dwindled to around 5% and introducing a new rival operating system had become too risky

1661-502: A foodservice distributor based in Chicago, and he informed Compaq's board that he accepted the offer. Rose, senior vice president and general manager of Compaq's Enterprise Computing group, resigned effective as of June 3 and was succeeded by Tandem veteran Enrico Pesatori. Rose was reportedly upset that he was not considered for the CEO vacancy, which became apparent once Michael Capellas

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1812-429: A low-priced PC could be made in half the time and at lower cost than Canion's initiative. It was also believed that Canion's consensus-style management slowed the company's ability to react in the market, whereas Pfeiffer's autocratic style would be suited to price and product competition. Rosen initiated a 14-hour board meeting, and the directors also interviewed Pfeiffer for several hours without informing Canion. At

1963-505: A minor player with its own technology". The Economist predicted in 1983 that "IBM will soon be as much a prisoner of its standards as its competitors are", because "Once enough IBM machines have been bought, IBM cannot make sudden changes in their basic design; what might be useful for shedding competitors would shake off even more customers". After the Compaq Deskpro 386 became the first 80386-based PC, PC wrote that owners of

2114-513: A price war that they started." Subsequent earnings releases from Compaq's rivals, Dell, Gateway, IBM, and Hewlett-Packard suggested that the problems were not affecting the whole PC industry as Pfeiffer had suggested. Dell and Gateway sold direct, which helped them to avoid Compaq's inventory problems and compete on price without dealer markups, plus Gateway sold web access and a broad range of software tailored to small businesses. Hewlett-Packard's PC business had similar challenges like Compaq but this

2265-524: A proprietary operating system : "Who cares? If IBM does it, they will most likely just isolate themselves from the largest marketplace, in which they really can't compete anymore anyway". He predicted that in 1987 the market "will complete its transition from an IBM standard to an Intel/MS-DOS/expansion bus standard ... Folks aren't so much concerned about IBM compatibility as they are about Lotus 1-2-3 compatibility". By 1992, Macworld stated that because of clones, "IBM lost control of its own market and became

2416-421: A range of machines from different vendors that had widely varying hardware. Those customers who needed other applications than the starter programs could reasonably expect publishers to offer their products for a variety of computers, on suitable media for each. Microsoft's competing OS was intended initially to operate on a similar varied spectrum of hardware, although all based on the 8086 processor. Thus, MS-DOS

2567-472: A religious education program at the University of St. Thomas. Murto had helped to organize the company's marketing and authorized-dealer distribution strategy, and held the post of senior vice president of sales since June 1985. Murto was succeeded by Ross A. Cooley, director of corporate sales. Cooley would report to Michael S. Swavely, vice president for marketing, who was given increased responsibility and

2718-412: A shakeup, which saw Eckhard Pfeiffer appointed president and CEO, serving through the 1990s. Ben Rosen provided the venture capital financing for the fledgling company and served as chairman of the board for 17 years from 1983 until September 28, 2000, when he retired and was succeeded by Michael Capellas , who served as its last chairman and CEO until its merger. Compaq was overtaken by Dell as

2869-493: A significant markup for more profits or discount for more sales, dealers had a major incentive to advertise Compaq. During its first year of sales (second year of operation), the company sold 53,000 PCs for sales of $ 111 million , the first start-up to hit the $ 100 million mark that fast. Compaq went public in 1983 on the NYSE and raised $ 67 million . In 1986, it enjoyed record sales of $ 329 million from 150,000 PCs, and became

3020-483: A table to write a letter to the president, someone has to write the letter. Compaq is sitting down at the typewriter". Michael S. Swavely, president of Compaq's North American division since May 1989, took a six-month sabbatical in January 1991 (which would eventually become retirement effective on July 12, 1991). Eckhard Pfeiffer , then president of Compaq International, was named to succeed him. Pfeiffer also received

3171-433: A then-industry record of $ 9.6 billion. The merger made Compaq, at the time, the world's second largest computer maker in the world in terms of revenue behind IBM. Digital Equipment, which had nearly twice as many employees as Compaq while generating half the revenue, had been a leading computer company during the 1970s and early 1980s. However, Digital had struggled during the 1990s, with high operating costs. For nine years,

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3322-637: Is a legacy of that period; other non-clone machines, while subject to a limit, could exceed 640 KB. Rumors of "lookalike," compatible computers, created without IBM's approval, began almost immediately after the IBM PC's release. InfoWorld wrote on the first anniversary of the IBM PC that The dark side of an open system is its imitators. If the specs are clear enough for you to design peripherals, they are clear enough for you to design imitations. Apple ... has patents on two important components of its systems ... IBM, which reportedly has no special patents on

3473-466: Is becoming a misnomer, as Intel has lost absolute control over the direction of x86 hardware development with AMD 's AMD64 . Additionally, non-Windows operating systems like macOS and Linux have established a presence on the x86 architecture. Although the IBM PC was designed for expandability, the designers could not anticipate the hardware developments of the 1980s, nor the size of the industry they would engender. To make things worse, IBM's choice of

3624-438: Is the best way to merchandise those products. You remove the freedom from the dealers to really merchandise when you bundle in software. It is perceived by a lot of people as a marketing gimmick. You know, when you advertise a $ 3,000 computer with $ 3,000 worth of free software, it obviously can't be true. The software should stand on its merits and be supported and so should the hardware. Why should you be constrained to use

3775-585: The Amiga , have been relegated to niche, enthusiast markets. In the past, the most successful exception was Apple 's Macintosh platform, which used non-Intel processors from its inception. Although Macintosh was initially based on the Motorola 68000 series , then transitioned to the PowerPC architecture, Macintosh computers transitioned to Intel processors beginning in 2006. Until 2020 Macintosh computers shared

3926-576: The Deskpro , a 16-bit desktop computer using an Intel 8086 microprocessor running at 7.14  MHz . It was considerably faster than an IBM PC and was, like the original Compaq Portable , also capable of running IBM software. It was Compaq's first non-portable computer and began the Deskpro line of computers. In 1986, Compaq introduced the Deskpro 386 , the first PC based on Intel 's new 80386 microprocessor. Bill Gates of Microsoft later said

4077-626: The IBM PS/2 computer that overcame many of the technical limits of the XT/AT bus, but this was rarely used as the basis for IBM-compatible computers since it required license payments to IBM both for the PS/2 bus and any prior AT-bus designs produced by the company seeking a license. This was unpopular with hardware manufacturers and several competing bus standards were developed by consortiums, with more agreeable license terms. Various attempts to standardize

4228-533: The Intel 8088 for the CPU introduced several limitations for developing software for the PC compatible platform. For example, the 8088 processor only had a 20-bit memory addressing space . To expand PC s beyond one megabyte, Lotus, Intel, and Microsoft jointly created expanded memory (EMS), a bank-switching scheme to allow more memory provided by add-in hardware, and accessed by a set of four 16- kilobyte "windows" inside

4379-631: The Macintosh computers offered by Apple Inc. and used mainly for desktop publishing at the time, the aging 8-bit Commodore 64 which was selling for $ 150 by this time and became the world's bestselling computer, the 32-bit Commodore Amiga line used for television and video production and the 32-bit Atari ST used by the music industry. However, IBM itself lost the main role in the market for IBM PC compatibles by 1990. A few events in retrospect are important: Despite popularity of its ThinkPad set of laptop PC's, IBM finally relinquished its role as

4530-607: The Multimedia PC (MPC) standard was set during 1990. A PC that met the minimum MPC standard could be marketed with the MPC logo, giving consumers an easy-to-understand specification to look for. Software that could operate on the most minimally MPC-compliant PC would be guaranteed to operate on any MPC. The MPC level 2 and MPC level 3 standards were set later, but the term "MPC compliant" never became popular. After MPC level 3 during 1996, no further MPC standards were established. By

4681-506: The PC-98 ). The IBM PC was sold in high enough volumes to justify writing software specifically for it, and this encouraged other manufacturers to produce machines that could use the same programs, expansion cards , and peripherals as the PC. The x86 computer marketplace rapidly excluded all machines which were not hardware-compatible or software-compatible with the PC. The 640 KB barrier on "conventional" system memory available to MS-DOS

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4832-677: The UnixWare NonStop Clusters product in 1998. Minor acquisitions centered around building a networking arm and included NetWorth (1998) based in Irving, Texas and Thomas-Conrad (1998) based in Austin, Texas. In 1997, Microcom was also acquired, based in Norwood, MA, which brought a line of modems, Remote Access Servers (RAS) and the popular Carbon Copy software. In 1998, Compaq acquired Digital Equipment Corporation for

4983-551: The VESA Local Bus (VLB), Peripheral Component Interconnect (PCI), and the Accelerated Graphics Port (AGP). Descendants of the x86 IBM PC compatibles, namely 64-bit computers based on " x86-64 /AMD64" chips comprise the majority of desktop computers on the market as of 2021, with the dominant operating system being Microsoft Windows . Interoperability with the bus structure and peripherals of

5134-700: The " Gang of Nine ", to develop EISA. Development of a truly mobile successor to the Portable line began in 1986, the company releasing two stopgap products in the meantime, the SLT (Compaq's first laptop ) and the Compaq Portable III (a lighter-weight, lunchbox-sized entry in the Portable line). In 1989, they introduced the LTE , their first notebook-sized laptop which competed with NEC 's UltraLite and Zenith Data Systems 's MinisPort . However, whereas

5285-514: The "A team", who controlled access to Pfeiffer. Gutsch was said to be a "master of corporate politics, pitting senior vice presidents against each other and inserting himself into parts of the company that normally would not be under his purview". Gutsch, who oversaw security, had an extensive security system and guard station installed on the eight floor of CCA-11, where the company's senior vice presidents worked. There were accusations that Gutsch and others sought to divide top management, although this

5436-528: The 20-bit addressing. Later, Intel CPUs had larger address spaces and could directly address 16 MB (80286) or more, causing Microsoft to develop extended memory (XMS) which did not require additional hardware. "Expanded" and "extended" memory have incompatible interfaces, so anyone writing software that used more than one megabyte had to provide for both systems for the greatest compatibility until MS-DOS began including EMM386, which simulated EMS memory using XMS memory. A protected mode OS can also be written for

5587-432: The 80286, but DOS application compatibility was more difficult than expected, not only because most DOS applications accessed the hardware directly, bypassing BIOS routines intended to ensure compatibility, but also that most BIOS requests were made by the first 32 interrupt vectors, which were marked as "reserved" for protected mode processor exceptions by Intel. Video cards suffered from their own incompatibilities. There

5738-583: The BIOS setup utility. Computers using the UEFI might need to be set at legacy BIOS mode to be able to boot DOS. However, the BIOS/UEFI options in most mass-produced consumer-grade computers are very limited and cannot be configured to truly handle OSes such as the original variants of DOS. The spread of the x86-64 architecture has further distanced current computers' and operating systems' internal similarity with

5889-567: The Compaq Plus with a 10  MB hard drive, PC Magazine wrote of "the reputation for compatibility it built with its highly regarded floppy disk portable". Compaq computers remained the most compatible PC clones into 1984, and maintained its reputation for compatibility for years, even as clone BIOSes became available from Phoenix Technologies and other companies that also reverse engineered IBM's design, then sold their version to clone manufacturers. On June 28, 1984, Compaq released

6040-537: The European market noted that it was competition as rivals could match Compaq at a fraction of the cost. Under pressure from Compaq's board to control costs as staff was ballooning at their Houston headquarters despite falling U.S. sales, while the number of non-U.S. employees had stayed constant, Compaq made its first-ever layoffs (1400 employees which was 12% of its workforce) while Pfeiffer was promoted to EVP and COO. Rosen and Canion had disagreed about how to counter

6191-488: The Handwell Corporation were threatened with legal action by IBM, who settled with them. Soon after in 1982, Compaq released the very successful Compaq Portable , also with a clean-room reverse-engineered BIOS, and also not challenged legally by IBM. Early IBM PC compatibles used the same computer buses as their IBM counterparts, switching from the 8-bit IBM PC and XT bus to the 16-bit IBM AT bus with

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6342-575: The IBM BIOS and then write its own BIOS using clean room design . Note this was over a year after Compaq released the Portable. The money and research put into reverse-engineering the BIOS was a calculated risk. At the same time, many manufacturers such as Tandy / RadioShack , Xerox , Hewlett-Packard , Digital Equipment Corporation , Sanyo , Texas Instruments , Tulip , Wang and Olivetti introduced personal computers that supported MS-DOS, but were not completely software- or hardware-compatible with

6493-454: The IBM PC compatibles remained very much compatible with the original IBM PC computers, although most of the components implement the compatibility in special backward compatibility modes used only during a system boot . It was often more practical to run old software on a modern system using an emulator rather than relying on these features. In 2014 Lenovo acquired IBM's x86-based server ( System x ) business for US$ 2.1 billion . One of

6644-651: The IBM PC compatibles: try the package you want to use before you buy the computer." Companies modified their computers' BIOS to work with newly discovered incompatible applications, and reviewers and users developed stress tests to measure compatibility; by 1984 the ability to operate Lotus 1-2-3 and Flight Simulator became the standard, with compatibles specifically designed to run them. IBM believed that some companies such as Eagle, Corona, and Handwell infringed on its copyright, and after Apple Computer, Inc. v. Franklin Computer Corp. successfully forced

6795-532: The IBM PC, to other computer manufacturers. The only part which had to be duplicated was the BIOS , which Compaq did legally by using clean room design at a cost of $ 1 million . Unlike other companies, Compaq did not bundle application software with its computers. Vice President of Sales and Service H. L. Sparks said in early 1984: We've considered it, and every time we consider it we reject it. I don't believe and our dealer network doesn't believe that bundling

6946-467: The IBM PC. Tandy described the Tandy 2000 , for example, as having a "'next generation' true 16-bit CPU", and with "More speed. More disk storage. More expansion" than the IBM PC or "other MS-DOS computers". While admitting in 1984 that many PC DOS programs did not work on the computer, the company stated that "the most popular, sophisticated software on the market" was available, either immediately or "over

7097-1213: The IBM PC. At first, few clones other than Compaq's offered truly full compatibility. Jerry Pournelle purchased an IBM PC in mid-1983, " rotten keyboard and all", because he had "four cubic feet of unevaluated software, much of which won't run on anything but an IBM PC. Although a lot of machines claim to be 100 percent IBM PC compatible, I've yet to have one arrive ... Alas, a lot of stuff doesn't run with Eagle, Z-100, Compupro , or anything else we have around here". Columbia Data Products's November 1983 sales brochure stated that during tests with retail-purchased computers in October 1983, its own and Compaq's products were compatible with all tested PC software, while Corona and Eagle's were less compatible. Columbia University reported in January 1984 that Kermit ran without modification on Compaq and Columbia Data Products clones, but not on those from Eagle or Seequa. Other MS-DOS computers also required custom code. By December 1983 Future Computing stated that companies like Compaq, Columbia Data Products, and Corona that emphasized IBM PC compatibility had been successful, while non-compatible computers had hurt

7248-432: The IBM PC. Many companies were reluctant to have their products' PC compatibility tested. When PC Magazine requested samples from computer manufacturers that claimed to produce compatibles for an April 1984 review, 14 of 31 declined. Corona specified that "Our systems run all software that conforms to IBM PC programming standards. And the most popular software does." When a BYTE journalist asked to test Peachtext at

7399-458: The Internet had overtaken Compaq's management team, saying "As a company engaged in transforming its industry for the Internet era, we must have the organizational flexibility necessary to move at Internet speed." In a statement, Pfeiffer said "Compaq has come a long way since I joined the company in 1983" and "under Ben's guidance, I know this company will realize its potential." Rosen's priority

7550-589: The LTE was the first commercially successful notebook computer, helping launch the burgeoning industry. It was a direct influence on both Apple and IBM for the development of their own notebook computers, the PowerBook and ThinkPad , respectively. By 1989, The New York Times wrote that being the first to release a 80386-based personal computer made Compaq the leader of the industry and "hurt no company more - in prestige as well as dollars - than" IBM. The company

7701-592: The OEM versions of MS-DOS were virtually identical, except perhaps for the provision of a few utility programs. MS-DOS provided adequate functionality for character-oriented applications such as those that could have been implemented on a text-only terminal . Had the bulk of commercially important software been of this nature, low-level hardware compatibility might not have mattered. However, in order to provide maximum performance and leverage hardware features (or work around hardware bugs), PC applications quickly developed beyond

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7852-607: The PC chassis at its plant in Shenzhen , China to cut costs. In 1996, instead of expanding its own plant, Compaq asked a Taiwanese supplier to set up a new factory nearby to produce the mechanicals, with the Taiwanese supplier owning the inventory until it reached Compaq in Houston. Pfeiffer also introduced a new distribution strategy, to build PCs made-to-order which would eliminate the stockpile of computers in warehouses and cut

8003-455: The PC community is stifling innovation because so many other companies are mimicking Big Blue", but The Economist stated in November 1983, "The main reason why an IBM standard is not worrying is that it can help competition to flourish". By 1983, IBM had about 25% of sales of personal computers between $ 1,000 and $ 10,000 , and computers with some PC compatibility were another 25%. As

8154-463: The PC, is even more vulnerable. Numerous PC-compatible machines—the grapevine says 60 or more—have begun to appear in the marketplace. By June 1983 PC Magazine defined "PC 'clone ' " as "a computer [that can] accommodate the user who takes a disk home from an IBM PC, walks across the room, and plugs it into the 'foreign' machine". Because of a shortage of IBM PCs that year, many customers purchased clones instead. Columbia Data Products produced

8305-548: The Spring 1983 COMDEX , Corona representatives "hemmed and hawed a bit, but they finally led me ... off in the corner where no one would see it should it fail". The magazine reported that "Their hesitancy was unnecessary. The disk booted up without a problem". Zenith Data Systems was bolder, bragging that its Z-150 ran all applications people brought to test with at the 1984 West Coast Computer Faire . Creative Computing in 1985 stated, "we reiterate our standard line regarding

8456-412: The U. S. such that European dealers were more qualified to handle its increasingly complex products. During the 1980s, under Canion's direction Compaq had focused on engineering, research, and quality control, producing high-end, high-performance machines with high profit margins that allowed Compaq to continue investing in engineering and next-generation technology. This strategy was successful as Compaq

8607-584: The UltraLite and MinisPort failed to gain much uptake due to their novel but nonstandard data storage technologies, the LTE succeeded on account of its use of the conventional floppy drive and spinning hard drive, allowing users to transfer data to and from their desktop computers without any hassle. As well, Compaq began offering docking stations with the release of the LTE/386s in 1990, providing performance comparable to then-current desktop machines. Thus,

8758-451: The acquisition of Digital as the cultural differences between both companies were too great, and complained that he was placed on the "B team" as a result. Compaq entered 1999 with strong expectations. Fourth-quarter 1998 earnings reported in January 1999 beat expectations by six cents a share with record 48 percent growth. The company launched Compaq.com as the key for its new direct sales strategy, and planned an IPO for AltaVista toward

8909-475: The cheaper Asian PC imports, as Canion wanted Compaq to build lower cost PCs with components developed in-house in order to preserve Compaq's reputation for engineering and quality, while Rosen believed that Compaq needed to buy standard components from suppliers and reach the market faster. While Canion developed an 18-month plan to create a line of low-priced computers, Rosen sent his own Compaq engineering team to Comdex without Canion's knowledge and discovered that

9060-472: The clone makers to stop using the BIOS. The Phoenix BIOS in 1984, however, and similar products such as AMI BIOS , permitted computer makers to legally build essentially 100%-compatible clones without having to reverse-engineer the PC BIOS themselves. A September 1985 InfoWorld chart listed seven compatibles with 256 KB RAM, two disk drives, and monochrome monitors for $ 1,495 to $ 2,320 , while

9211-514: The combined companies should do, or indeed how the three dramatically different cultures could work as a single entity, and Compaq struggled from strategy indecisiveness and lost focus, as a result being caught in between the low end and high end of the market. Mark Anderson, president of Strategic News Service, a research firm based in Friday Harbor, Wash. was quoted as saying, "The kind of goals he had sounded good to shareholders – like being

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9362-521: The combined company would have to lay off 2,000 employees from Compaq and 15,000 from Digital which would potentially hurt morale. Furthermore, Compaq fell behind schedule in integrating Digital's operations, which also distracted the company from its strength in low-end PCs where it used to lead the market in rolling out next-generation systems which let rival Dell grab market share. Reportedly Compaq had three consulting firms working to integrate Digital alone. However, Pfeiffer had little vision for what

9513-665: The company had lost money or barely broke even, and had recently refocused itself as a "network solutions company". In 1995, Compaq had considered a bid for Digital but only became seriously interested in 1997 after Digital's major divestments and refocusing on the Internet. At the time of the acquisition, services accounted for 45 percent of Digital's revenues (about $ 6 billion) and their gross margins on services averaged 34 percent, considerably higher than Compaq's 25% margins on PC sales and also satisfying customers who had demanded more services from Compaq for years. Compaq had originally wanted to purchase only Digital's services business but that

9664-463: The company should no longer use profits from high-margin businesses to carry marginally profitable ones, as instead each unit must show a return on investment. Pfeiffer's vision was to make Compaq a full-fledged computer company, moving beyond its main business of manufacturing retail PCs and into the more lucrative business services and solutions that IBM did well at, such as computer servers which would also require more "customer handholding" from either

9815-459: The company's annual meeting for selling stock before reporting the sales slowdown. Rose was succeeded by SVP Enrico Pesatori, who had previously worked as a senior executive at Olivetti , Zenith Data Systems , Digital Equipment Corporation , and Tandem Computers . Capellas was appointed COO after pressure mounted on Rosen to find a permanent CEO, however it was reported that potential candidates did not want to work under Rosen as chairman. Around

9966-587: The company's field sales organization after starting up the Western U.S. Area of Operations. These executives, along with other key contributors, including Kevin Ellington, Douglas Johns, Steven Flannigan, and Gary Stimac, helped the company compete against the IBM Corporation in all personal computer sales categories, after many predicted that none could compete with the behemoth. The soft-spoken Canion

10117-525: The company's meteoric growth in the late 1980s and early 1990s were Ross A. Cooley, another former IBM associate, who served for many years as SVP of GM North America; Michael Swavely, who was the company's chief marketing officer in the early years, and eventually ran the North America organization, later passing along that responsibility to Cooley when Swavely retired. In the United States, Brendan A. "Mac" McLoughlin (another long time IBM executive) led

10268-457: The components inventory down to two weeks, with the supply chain from supplier to dealer linked by complex software. Vice-president for Corporate Development Kenneth E. Kurtzman assembled five teams to examine Compaq's businesses and assess each unit's strategy and that of key rivals. Kurtzman's teams recommended to Pfeiffer that each business unit had to be first or second in its market within three years—or else Compaq should exit that line. Also,

10419-423: The computer marketplace of the time. Until then Microsoft's business was based primarily on computer languages such as BASIC . The established small system operating software was CP/M from Digital Research which was in use both at the hobbyist level and by the more professional of those using microcomputers. To achieve such widespread use, and thus make the product viable economically, the OS had to operate across

10570-457: The computer's hardware directly and to instead make standard calls to BIOS functions that carried out hardware-dependent operations. This software would run on any machine using MS-DOS or PC DOS. Software that directly addressed the hardware instead of making standard calls was faster, however; this was particularly relevant to games. Software addressing IBM PC hardware in this way would not run on MS-DOS machines with different hardware (for example,

10721-508: The conclusion, the board was unanimous in picking Pfeiffer over Canion. As Canion was popular with company workers, 150 employees staged an impromptu protest with signs stating "We love you, Rod." and taking out a newspaper ad saying "Rod, you are the wind beneath our wings. We love you." Canion declined an offer to remain on Compaq's board and was bitter about his ouster as he did not speak to Rosen for years, although their relationship became cordial again. In 1999, Canion admitted that his ouster

10872-655: The dealer channel and its markup, and built each machine to order to keep inventories and costs at a minimum. At the same time, Compaq, through its acquisitions of the Digital Equipment Corporation in 1998 and Tandem Computers in 1997, had tried to become a major systems company, like IBM and Hewlett-Packard. While IBM and HP were able generate repeat business from corporate customers to drive sales of their different divisions, Compaq had not yet managed to make its newly acquired sales and services organizations work as seamlessly. In early 1998, Compaq had

11023-587: The dealers or Compaq staff themselves. Unlike IBM and HP, Compaq would not build up field technicians and programmers in-house as those could be costly assets, instead Compaq would leverage its partnerships (including those with Andersen Consulting and software maker SAP) to install and maintain corporate systems. This allowed Compaq to compete in the "big-iron market" without incurring the costs of running its own services or software businesses. Most of Compaq's server sales were for systems that would be running Microsoft's Windows NT operating system, and indeed Compaq

11174-549: The dominant market player only to be virtually wiped out by Intel a year later. Intel has been the uncontested leader ever since. As the "Wintel" platform gained dominance Intel gradually abandoned the practice of licensing its technologies to other chipset makers; in 2010 Intel was involved in litigation related to their refusal to license their processor bus and related technologies to other companies like Nvidia . Companies such as AMD and Cyrix developed alternative x86 CPUs that were functionally compatible with Intel's. Towards

11325-536: The end of 1999 in order to capitalize on the dotcom bubble. However, by February 1999, analysts were sceptical of Compaq's plan to sell both direct and to resellers. Compaq was hit with two class-action lawsuits, as a result of CFO Earl Mason, SVP John Rose, and other executives selling US$ 50 million of stock before a conference call with analysts, where they noted that demand for PCs was slowing down. On April 17, 1999, just nine days after Compaq reported first-quarter profit being at half of what analysts had expected,

11476-584: The end of the 1990s, AMD was taking an increasing share of the CPU market for PCs. AMD even ended up playing a significant role in directing the development of the x86 platform when its Athlon line of processors continued to develop the classic x86 architecture as Intel deviated with its NetBurst architecture for the Pentium 4 CPUs and the IA-64 architecture for the Itanium set of server CPUs. AMD developed AMD64,

11627-472: The equivalent IBM PC cost $ 2,820 . The inexpensive Leading Edge Model D is even compatible with IBM proprietary diagnostic software, unlike the Compaq Portable. By 1986 Compute! stated that "clones are generally reliable and about 99 percent compatible", and a 1987 survey in the magazine of the clone industry did not mention software compatibility, stating that "PC by now has come to stand for

11778-620: The exception rather than the rule. Instead of placing importance on compatibility with the IBM PC, vendors began to emphasize compatibility with Windows . In 1993, a version of Windows NT was released that could operate on processors other than the x86 set. While it required that applications be recompiled, which most developers did not do, its hardware independence was used for Silicon Graphics (SGI) x86 workstations–thanks to NT's Hardware abstraction layer (HAL), they could operate NT (and its vast application library) . No mass-market personal computer hardware vendor dared to be incompatible with

11929-470: The fastest-growing part of the computer hardware market. Compaq also built up a network engineering and marketing staff. In 1996, despite record sales and profits at Compaq, Pfeiffer initiated a major management shakeup in the senior ranks. John T. Rose, who previously ran Compaq's desktop PC division, took over the corporate server business from SVP Gary Stimac who had resigned. Rose had joined Compaq in 1993 from Digital Equipment Corporation where he oversaw

12080-465: The first IBM PC went on sale. There were three operating systems (OS) available for it. The least expensive and most popular was PC DOS made by Microsoft . In a crucial concession, IBM's agreement allowed Microsoft to sell its own version, MS-DOS , for non-IBM computers. The only component of the original PC architecture exclusive to IBM was the BIOS (Basic Input/Output System). IBM at first asked developers to avoid writing software that addressed

12231-606: The first IBM PC compatible computers, being the second company after Columbia Data Products to legally reverse engineer the BIOS of the IBM Personal Computer . It rose to become the largest supplier of PC systems during the 1990s. The company was initially based in Harris County, Texas . The company was formed by Rod Canion , Jim Harris , and Bill Murto , all of whom were former Texas Instruments senior managers. All three had left by 1991 under

12382-406: The first CPU change to the PC platform that was not initiated by IBM. Compaq had concluded, according to PC , that it could do so because "IBM's DOS standard is now bigger than IBM"; IBM could not make changes to the PC architecture it had created to hurt Compaq, without also obsoleting millions of real IBM PCs. An IBM-made 386 machine reached the market almost a year later, but by that time Compaq

12533-568: The first computer more or less compatible with the IBM PC standard during June 1982, soon followed by Eagle Computer . Compaq announced its first product, an IBM PC compatible in November 1982, the Compaq Portable . The Compaq was the first sewing machine-sized portable computer that was essentially 100% PC-compatible. The court decision in Apple v. Franklin , was that BIOS code was protected by copyright law, but it could reverse-engineer

12684-409: The first day of trading after the first-quarter announcement and closed the following Friday at $ 23.62 . During three out of the last six quarters of Pfeiffer's tenure, the company's revenues or earnings had missed expectations. While rival Dell had 55% growth in U.S. PC sales in the first quarter of 1999, Compaq could only manage 10%. Rosen suggested that the accelerating change brought about by

12835-424: The first major extension not created by Intel, which Intel later adopted as x86-64 . During 2006 Intel began abandoning NetBurst with the release of their set of "Core" processors that represented a development of the earlier Pentium III. A major alternative to Wintel domination is the rise of alternative operating systems since the early 2000s, which marked as the start of the post-PC era . This would include both

12986-422: The folks at IBM didn't trust the 386. They didn't think it would get done. So we encouraged Compaq to go ahead and just do a 386 machine. That was the first time people started to get a sense that it wasn't just IBM setting the standards, that this industry had a life of its own, and that companies like Compaq and Intel were in there doing new things that people should pay attention to. The Compaq 386 computer marked

13137-599: The founders in a pie shop, (named House of Pies in Houston). Their first venture capital came from Benjamin M. Rosen and Sevin Rosen Funds , who helped the fledgling company secure $ 1.5 million to produce their initial computer. Overall, the founders managed to raise $ 25 million from venture capitalists, as this gave stability to the new company as well as providing assurances to the dealers or middlemen. Unlike many startups, Compaq differentiated its offerings from

13288-575: The furtherance of the Equity line with the follow-on Equity II , Equity III , and others based on the i386SX . IBM Compatible " IBM PC–compatible " refers to a class of computers that are technically compatible with the 1981 IBM PC and subsequent XT and AT models from computer giant IBM . Like the original IBM PC, they use an Intel x86 central processing unit and are capable of using interchangeable commodity hardware , such as expansion cards . Initially such computers were referred to as PC clones , IBM clones or IBM PC clones , but

13439-462: The hardware, for a variety of reasons: The first thing to think about when considering an IBM-compatible computer is, "How compatible is it?" In May 1983, Future Computing defined four levels of compatibility: During development, Compaq engineers found that Microsoft Flight Simulator would not run because of what subLOGIC 's Bruce Artwick described as "a bug in one of Intel's chips", forcing them to make their new computer bug compatible with

13590-496: The interfaces were made, but in practice, many of these attempts were either flawed or ignored. Even so, there were many expansion options, and despite the confusion of its users, the PC compatible design advanced much faster than other competing designs of the time, even if only because of its market dominance. During the 1990s, IBM's influence on PC architecture started to decline. "IBM PC compatible" becomes "Standard PC" in 1990s, and later " ACPI PC" in 2000s. An IBM-brand PC became

13741-471: The late 1990s, the success of Microsoft Windows had driven rival commercial operating systems into near-extinction, and had ensured that the "IBM PC compatible" computer was the dominant computing platform . This meant that if a developer made their software only for the Wintel platform, they would still be able to reach the vast majority of computer users. The only major competitor to Windows with more than

13892-436: The latest in a string of earnings disappointments, Pfeiffer was forced to resign as CEO in a coup led by board chairman Ben Rosen . Reportedly, at the special board meeting held on April 15, 1999, the directors were unanimous in dismissing Pfeiffer. The company's stock had fallen 50 percent since its all-time high in January 1999. Compaq shares, which traded as high as $ 51.25 early in 1999, dropped 23 percent on April 12, 1999,

14043-428: The latest version of Windows, and Microsoft's annual WinHEC conferences provided a setting in which Microsoft could lobby for—and in some cases dictate—the pace and direction of the hardware of the PC industry. Microsoft and Intel had become so important to the ongoing development of PC hardware that industry writers began using the word Wintel to refer to the combined hardware-software system. This terminology itself

14194-487: The latter becoming the most popular. Because of the great number of third-party adapters and no standard for them, programming the PC could be difficult. Professional developers would operate a large test-suite of various known-to-be-popular hardware combinations. Meanwhile, consumers were overwhelmed by the competing, incompatible standards and many different combinations of hardware on offer. To give them some idea of what sort of PC they would need to operate their software,

14345-465: The many other IBM PC clones by not focusing mainly on price, but instead concentrating on new features, such as portability and better graphics displays as well as performance—and all at prices comparable to those of IBM's PCs. In contrast to Dell and Gateway 2000 , Compaq hired veteran engineers with an average of 15 years experience, which lent credibility to Compaq's reputation of reliability among customers. Due to its partnership with Intel , Compaq

14496-525: The market and competition grew IBM's influence diminished. In November 1985 PC Magazine stated "Now that it has created the [PC] market, the market doesn't necessarily need IBM for the machines. It may depend on IBM to set standards and to develop higher-performance machines, but IBM had better conform to existing standards so as to not hurt users". In January 1987, Bruce Webster wrote in Byte of rumors that IBM would introduce proprietary personal computers with

14647-418: The monitors that they offered to customers of their Deskpro and Presario lines as standalone units to third-party resellers, including their popular 171FS monitor. On June 26, 1995, Compaq reached an agreement with Cisco Systems, Inc. , in order to get into networking, including digital modems, routers, and switches favored by small businesses and corporate departments, which was now a $ 4 billion business and

14798-522: The new computer did not need to fear that future IBM products would be incompatible with the Compaq, because such changes would also affect millions of real IBM PCs: "In sticking it to the competition, IBM would be doing the same to its own people". After IBM announced the OS/2 -oriented PS/2 line in early 1987, sales of existing DOS-compatible PC compatibles rose, in part because the proprietary operating system

14949-586: The next six months". Like IBM, Microsoft's apparent intention was that application writers would write to the application programming interfaces in MS-DOS or the firmware BIOS, and that this would form what would now be termed a hardware abstraction layer . Each computer would have its own Original Equipment Manufacturer (OEM) version of MS-DOS, customized to its hardware. Any software written for MS-DOS would operate on any MS-DOS computer, despite variations in hardware design. This expectation seemed reasonable in

15100-531: The old BIOS-based firmware interface, or have their CSMs disabled, cannot natively run MS-DOS since MS-DOS depends on a BIOS interface to boot. Only the Macintosh had kept significant market share without having compatibility with the IBM PC, although that changed during the Intel Macs era running Mac OS X , often dual-booting Windows with Boot Camp . IBM decided in 1980 to market a low-cost single-user computer as quickly as possible. On August 12, 1981,

15251-508: The original AT bus—which it renamed ISA —instead of licensing IBM's MCA. Prior to developing EISA Compaq had invested significant resources into reverse engineering MCA, but its executives correctly calculated that the $ 80 billion already spent by corporations on IBM-compatible technology would make it difficult for even IBM to force manufacturers to adopt the new MCA design. Instead of cloning MCA, Compaq led an alliance with Hewlett Packard and seven other major manufacturers, known collectively as

15402-408: The original IBM PC by introducing yet another processor mode with an instruction set modified for 64-bit addressing, but x86-64 capable processors also retain standard x86 compatibility. Compaq Compaq Computer Corporation was an American information technology company founded in 1982 that developed, sold, and supported computers and related products and services. Compaq produced some of

15553-419: The original PC architecture may be limited or non-existent. Many modern computers are unable to use old software or hardware that depends on portions of the IBM PC compatible architecture which are missing or do not have equivalents in modern computers. For example, computers which boot using Unified Extensible Firmware Interface -based firmware that lack a Compatibility Support Module, or CSM, required to emulate

15704-521: The original XT circuits: one 8237 DMA controller, one 8253 interrupt timer, one 8255 parallel interface controller, one 8259 interrupt controller, one 8284 clock generator, and one 8288 bus controller. Similar non-Intel chipsets appeared for the AT-compatibles, for example OPTi's 82C206 or 82C495XLC which were found in many 486 and early Pentium systems. The x86 chipset market was very volatile though. In 1993, VLSI Technology had become

15855-492: The personal computer division and worldwide engineering, while Stimac had been with Compaq since 1982 and was one of the longest-serving executives. Senior Vice-president for North America Ross Cooley announced his resignation effective at the end of 1996. CFO Daryl J. White, who joined the company in January, 1983 resigned in May, 1996 after 8 years as CFO. Michael Winkler, who joined Compaq in 1995 to run its portable computer division,

16006-562: The problem of bloated PC inventories. By summer 1998, Compaq was suffering from product-quality problems. Robert W. Stearns, SVP of Business Development, said "In [Pfeiffer's] quest for bigness, he lost an understanding of the customer and built what I call empty market share—large but not profitable", while Jim Moore, a technology strategy consultant with GeoPartners Research in Cambridge, Mass., says Pfeiffer "raced to scale without having economies of scale." The "colossus" that Pfeiffer built up

16157-509: The rapid growth of the smartphones (using Android or iOS) as an alternative to the personal computer; and the increasing prevalence of Linux and Unix-like operating systems in the server farms of large corporations such as Google or Amazon. The term "IBM PC compatible" is not commonly used presently because many current mainstream desktop and laptop computers are based on the PC architecture, and IBM no longer makes PCs. The competing hardware architectures have either been discontinued or, like

16308-625: The release of Windows 3.0 in 1990.) Compaq's technical leadership and the rivalry with IBM was emphasized when the SystemPro server was launched in late 1989 – this was a true server product with standard support for a second CPU and RAID , but also the first product to feature the EISA bus, designed in reaction to IBM's MCA ( Micro Channel Architecture ) which was incompatible with the original AT bus. Although Compaq had become successful by being 100 percent IBM-compatible, it decided to continue with

16459-686: The release of the AT. IBM's introduction of the proprietary Micro Channel architecture (MCA) in its PS/2 series resulted in the establishment of the Extended Industry Standard Architecture bus open standard by a consortium of IBM PC compatible vendors, redefining the 16-bit IBM AT bus as the Industry Standard Architecture (ISA) bus. Additional bus standards were subsequently adopted to improve compatibility between IBM PC compatibles, including

16610-542: The reputations of others like TI and DEC despite superior technology. At a San Francisco meeting it warned 200 attendees, from many American and foreign computer companies as well as IBM itself, to "Jump on the IBM PC-compatible bandwagon—quickly, and as compatibly as possible". Future Computing said in February 1984 that some computers were "press-release compatible", exaggerating their actual compatibility with

16761-571: The retail computer market with the Compaq Presario as one of the first manufacturers in the mid-1990s to market a sub-$ 1000 PC. In order to maintain the prices it wanted, Compaq became the first first-tier computer manufacturer to utilize CPUs from AMD and Cyrix . The two price wars resulting from Compaq's actions ultimately drove numerous competitors from the market, such as Packard Bell and AST Research . From third place in 1993, Compaq had overtaken Apple Computer and even surpassed IBM as

16912-539: The same effect, but this did not easily extend to the greater color depths and higher resolutions offered by SVGA adapters. An attempt at creating a standard named VESA BIOS Extensions (VBE) was made, but not all manufacturers used it. When the 386 was introduced, again a protected mode OS could be written for it. This time, DOS compatibility was much easier because of virtual 8086 mode . Unfortunately programs could not switch directly between them, so eventually, some new memory-model APIs were developed, VCPI and DPMI ,

17063-493: The same software that a contemporary IBM or Lenovo PC could. The term was initially in contrast to the variety of home computer systems available in the early 1980s, such as the Apple II , TRS-80 , and Commodore 64 . Later, the term was primarily used in contrast to Commodore 's Amiga and Apple 's Macintosh computers. These "clones" duplicated almost all the significant features of the original IBM PC architectures. This

17214-481: The same system architecture as their Wintel counterparts and could boot Microsoft Windows without a DOS Compatibility Card . However, with the transition to the internally developed ARM -based Apple silicon , they are again the exception to IBM compatibility. The processor speed and memory capacity of modern PCs are many orders of magnitude greater than they were for the original IBM PC and yet backwards compatibility has been largely maintained –

17365-414: The separate position of Compaq president. The board complained that Pfeiffer was too removed from management and the rank-and-file, as he surrounded himself with a "clique" of Chief Financial Officer Earl Mason, Senior Vice-President John T. Rose, and Senior Vice-President of Human Resources Hans Gutsch. Current and former Compaq employees complained that Gutsch was part of a group of senior executives, dubbed

17516-431: The simple terminal applications that MS-DOS supported directly. Spreadsheets , WYSIWYG word processors , presentation software and remote communication software established new markets that exploited the PC's strengths, but required capabilities beyond what MS-DOS provided. Thus, from very early in the development of the MS-DOS software environment, many significant commercial software products were written directly to

17667-452: The software that comes with a piece of hardware? I think it can tend to inhibit sales over the long run. Compaq instead emphasized PC compatibility, of which Future Computing in May 1983 ranked Compaq as among the "Best" examples. "Many industry observers think [Compaq] is poised for meteoric growth", The New York Times reported in March of that year. By October, when the company announced

17818-569: The strengths of the PC-compatible design is its modular hardware design. End-users could readily upgrade peripherals and, to some degree, processor and memory without modifying the computer's motherboard or replacing the whole computer, as was the case with many of the microcomputers of the time. However, as processor speed and memory width increased, the limits of the original XT/AT bus design were soon reached, particularly when driving graphics video cards. IBM did introduce an upgraded bus in

17969-496: The term "IBM PC compatible" is now a historical description only, as the vast majority of microcomputers produced since the 1990s are IBM compatible. IBM itself no longer sells personal computers, having sold its division to Lenovo in 2005. " Wintel " is a similar description that is more commonly used for modern computers. The designation "PC", as used in much of personal computer history , has not meant "personal computer" generally, but rather an x86 computer capable of running

18120-416: The time of Rando's departure, Compaq Services ranked third behind those of IBM and EDS, while slightly ahead of Hewlett-Packard 's and Andersen Consulting , however customers switched from Digital technology-based workstations to those of HP, IBM, and Sun Microsystems. Mason, senior vice president and chief financial officer, had previously been offered the job of chief executive of Alliant Foodservice, Inc.,

18271-421: The title of chief operating officer, with responsibility for the company's operations on a worldwide basis, so that Canion could devote more time to strategy. Swavely's abrupt departure in January led to rumors of turmoil in Compaq's executive suite, including friction between Canion and Swavely, likely as Swavely's rival Pfeiffer had received the number two leadership position. Swavely's U.S. marketing organization

18422-482: The title of vice president for sales and marketing. In November 1982, Compaq announced their first product, the Compaq Portable , a portable IBM PC compatible personal computer . It was released in March 1983 at $ 2,995 . The Compaq Portable was one of the progenitors of today's laptop ; some called it a "suitcase computer" for its size and the look of its case. It was the second IBM PC compatible, being capable of running all software that would run on an IBM PC . It

18573-455: The top PC manufacturer in 1994, as both IBM and Apple were struggling considerably during that time. Compaq's inventory and gross margins were better than that of its rivals which enabled it to wage the price wars. Compaq had decided to make a foray into printers in 1989, and the first models were released to positive reviews in 1992. However, Pfeiffer saw that the prospects of taking on market leader Hewlett-Packard (who had 60% market share)

18724-417: The top global PC maker in 1999, which took Compaq several months to take the top spot again in 2000 before eventually being overtaken by Dell again in 2001. Struggling to keep up in the price wars against Dell, as well as with a risky acquisition of DEC , Compaq was acquired by Hewlett-Packard (HP) for US$ 25 billion in 2002. The Compaq brand remained in use by HP for lower-end systems until 2013 when it

18875-507: The youngest-ever firm to make the Fortune 500 . In 1985, sales reached $ 504 million. In 1987, Compaq hit the $ 1 billion revenue mark, taking the least amount of time to reach that milestone. By 1991, Compaq held the fifth place spot in the PC market with $ 3 billion in sales that year. Two key marketing executives in Compaq's early years, Jim D'Arezzo and Sparky Sparks, had come from IBM's PC Group . Other key executives responsible for

19026-426: Was a commercial success, selling 53,000 units in its first year and generating $ 111 million in sales revenue. The Compaq Portable was the first in the range of the Compaq Portable series . Compaq was able to market a legal IBM clone because IBM mostly used "off the shelf" parts for their PC . Furthermore, Microsoft had kept the right to license MS-DOS , the most popular and de facto standard operating system for

19177-441: Was a key player during the merger discussions and the most senior executive from Digital to remain with Compaq after the acquisition closed and had been touted by some as the heir-apparent to Pfeiffer. Rando's division had performed strongly as it had sales of $ 1.6 billion for the first quarter compared to $ 113 million in 1998, which met expectations and was anticipated to post accelerated and profitable growth going forward. At

19328-543: Was a no-frills offering. It ran at the PC's standard 4.77 MHz clock rate, came with 256 KB RAM, expansion above 512 KB required an expansion board, displayed CGA video, had few available expansion slots, only two half-height drive bays, and lacked a socket for an 8087 math chip . Subsequent versions, the Equity I+ and Apex 100 , upped the clock rate to 10 MHz, the standard RAM to 640 KB, supported 3.5-inch floppy drives and hard disks, sported an 8087 socket, and had

19479-436: Was able to maintain a technological lead in the market place as it was the first one to come out with computers containing the next generation of each Intel processor . Under Canion's direction, Compaq sold computers only through dealers to avoid potential competition that a direct sales channel would foster, which helped foster loyalty among resellers. By giving dealers considerable leeway in pricing Compaq's offerings, either

19630-502: Was at its height. CEO Pfeiffer boldly predicted that the Microsoft/Intel "Wintel" duopoly would be replaced by "Wintelpaq". Pfeiffer also made several major and some minor acquisitions. In 1997, Compaq bought Tandem Computers , known for their NonStop server line. This acquisition instantly gave Compaq a presence in the higher end business computing market. The alliance between Compaq and SCO took advantage of this to put out

19781-517: Was considered a trusted brand, while many other IBM clones were untrusted due to being plagued by poor reliability. However, by the end of the eighties many manufacturers had improved their quality and were able to produce inexpensive PCs with off-the-shelf components, incurring none of the R&;D costs which allowed them to undercut Compaq's expensive computers. Faced with lower-cost rivals such as Dell , AST Research , and Gateway 2000 , Compaq suffered

19932-543: Was discontinued. As of 2024 , the brand is currently licensed to third parties for use on electronics in Brazil and India. Compaq was founded in February 1982 by Rod Canion , Jim Harris , and Bill Murto, three senior managers from semiconductor manufacturer Texas Instruments . The three of them had left due to lack of faith and loss of confidence in TI's management, and initially considered but ultimately decided against starting

20083-481: Was facilitated by IBM's choice of commodity hardware components , which were cheap, and by various manufacturers' ability to reverse-engineer the BIOS firmware using a " clean room design " technique. Columbia Data Products built the first clone of the IBM personal computer , the MPC 1600 by a clean-room reverse-engineered implementation of its BIOS. Other rival companies, Corona Data Systems , Eagle Computer , and

20234-438: Was for several years sold only as an OEM product. There was no Microsoft-branded MS-DOS: MS-DOS could not be purchased directly from Microsoft, and each OEM release was packaged with the trade dress of the given PC vendor. Malfunctions were to be reported to the OEM, not to Microsoft. However, as machines that were compatible with IBM hardware—thus supporting direct calls to the hardware—became widespread, it soon became clear that

20385-476: Was given US$ 20,000 to start up Compaq Europe He started up Compaq's first overseas office in Munich in 1984. By 1990, Compaq Europe was a $ 2 billion business and number two behind IBM in that region, and foreign sales contributed 54 percent of Compaq's revenues. Pfeiffer, while transplanting Compaq's U.S. strategy of dealer-only distribution to Europe, was more selective in signing up dealers than Compaq had been in

20536-493: Was justified, saying "I was burned out. I needed to leave. He [Rosen] felt I didn't have a strong sense of urgency". Two weeks after Canion's ouster, five other senior executives resigned, including remaining company founder James Harris as SVP of Engineering. These departures were motivated by an enhanced severance or early retirement, as well as an imminent demotion as their functions were to be shifted to vice presidents. Under Pfeiffer's tenure as chief executive, Compaq entered

20687-592: Was losing ground with only 4% growth for Compaq versus 7% in the market, likely due to short supplies of the LTE 386s from component shortages, rivals that undercut Compaq's prices by as much as 35%, and large customers who did not like Compaq's dealer-only policy. Pfeiffer became president and CEO of Compaq later that year, as a result of a boardroom coup led by board chairman Ben Rosen that forced co-founder Rod Canion to resign as president and CEO. Pfeiffer had joined Compaq from Texas Instruments , and established operations from scratch in both Europe and Asia. Pfeiffer

20838-488: Was named COO. While Enterprise Computing, responsible for engineering and marketing of network servers, workstations and data-storage products, reportedly accounted for one third of Compaq's revenues and likely the largest part of its profits, it was responsible for the earnings shortfall in Q1 of 1999. In addition, Rose was part of the "old guard" close to former CEO Pfeiffer, and he and other Compaq executives had been criticized at

20989-477: Was no standard interface for using higher-resolution SVGA graphics modes supported by later video cards. Each manufacturer developed their own methods of accessing the screen memory, including different mode numberings and different bank switching arrangements. The latter were used to address large images within a single 64 KB segment of memory. Previously, the VGA standard had used planar video memory arrangements to

21140-465: Was not available. In 1988, Gartner Group estimated that the public purchased 1.5 clones for every IBM PC. By 1989 Compaq was so influential that industry executives spoke of "Compaq compatible", with observers stating that customers saw the company as IBM's equal or superior. After 1987, IBM PC compatibles dominated both the home and business markets of commodity computers, with other notable alternative architectures being used in niche markets, like

21291-417: Was not nimble enough to adapt to the fast-changing computer industry. That year Compaq forecast demand poorly and shipped too many PCs, causing resellers to dump them at fire sale prices, and since Compaq protected resellers from heavy losses it cost them two quarters of operating profits. Pfeiffer also refused to develop a potential successor, rebuffing Rosen's suggestion to recruit a few executives to create

21442-586: Was offset by HP's extremely lucrative printer business, while IBM sold PCs at a loss but used them to lock in multi-year services contracts with customers. After Pfeiffer's resignation, the board established an office of the CEO with a triumvirate of directors; Rosen as interim CEO and vice chairmen Frank P. Doyle and Robert Ted Enloe III. They began "cleaning house", as shortly afterward many of Pfeiffer's top executives resigned or were pushed out, including John J. Rando, Earl L. Mason, and John T. Rose. Rando, senior vice president and general manager of Compaq Services,

21593-543: Was popular with employees and the culture that he built helped Compaq to attract the best talent. Instead of headquartering the company in a downtown Houston skyscraper, Canion chose a West Coast-style campus surrounded by forests, where every employee had similar offices and no-one (not even the CEO) had a reserved parking spot. At semi-annual meetings, turnout was high as any employee could ask questions to senior managers. In 1987, company co-founder Bill Murto resigned to study at

21744-557: Was promoted to general manager of the new PC products group. Earl Mason, hired from Inland Steel effective in May 1996, immediately made an impact as the new CFO. Under Mason's guidance, Compaq utilized its assets more efficiently instead of focusing just on income and profits, which increased Compaq's cash from $ 700 million to nearly $ 5 billion in one year. Additionally, Compaq's return on invested capital (after-tax operating profit divided by operating assets) doubled to 50 percent from 25 percent in that period. Compaq had been producing

21895-523: Was regarded by others as sour grapes on the part of executives who were shut out of planning that involved the acquisitions of Tandem Computers and Digital Equipment Corp. Pfeiffer reduced the size of the group working on the deal due to news leaks, saying "We cut the team down to the minimum number of people—those who would have to be directly involved, and not one person more". Robert W. Stearns, Compaq's senior vice president for business development, with responsibility for mergers and acquisitions, had opposed

22046-477: Was so influential that observers and its executives spoke of "Compaq compatible". InfoWorld reported that "In the [ISA market] Compaq is already IBM's equal in being seen as a safe bet", quoting a sell-side analyst describing it as "now the safe choice in personal computers". Even rival Tandy Corporation acknowledged Compaq's leadership, stating that within the Gang of Nine "when you have 10 people sit down before

22197-418: Was the 386 supplier of choice and IBM had lost some of its prestige. For the first three months after announcement, the Deskpro 386 shipped with Windows/386. This was a version of Windows 2.1 adapted for the 80386 processor. Support for the virtual 8086 mode was added by Compaq engineers. (Windows, running on top of the MS-DOS operating system, would not become a popular "operating environment" until at least

22348-680: Was the largest hardware supplier for Windows NT. However, some 20 percent of Compaq servers went for systems that would be running the Unix operating system . This was exemplified by a strategic alliance formed in 1997 between Compaq and the Santa Cruz Operation (SCO), which was known for its server Unix operating system products on Intel-architecture-based hardware. Compaq was also the largest hardware supplier for SCO's Unix products, and some 10 percent of Compaq's ProLiant servers ran SCO's UnixWare . In January 1998, Compaq

22499-477: Was to have Compaq catchup as an E-commerce competitor, and he also moved to streamline operations and reduce the indecision that plagued the company. Roger Kay, an analyst at International Data Corporation, observed that Compaq's behavior at times seemed like a personal vendetta, noting that "Eckhard has been so obsessed with staying ahead of Dell that they focused too hard on market share and stopped paying attention to profitability and liquidity. They got whacked in

22650-505: Was tough, as that would force Compaq to devote more funds and people to that project than originally budgeted. Compaq ended up selling the printer business to Xerox and took a charge of $ 50 million. In 1994, Compaq formed a joint venture with ADI Corporation , a Taiwanese manufacturer who produced the bulk of Compaq's monitors, to raise multiple factories in Mexico, Brazil, and Europe to assemble and store ADI's monitors. Compaq sold many of

22801-465: Was turned down. When the announcement was made, it was initially viewed as a master stroke as it immediately gave Compaq a 22,000 person global service operation to help corporations handle major technological purchases (by 2001 services made up over 20% of Compaq's revenues, largely due to the Digital employees inherited from the merger), in order to compete with IBM. However it was also risky merger, as

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