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trial company was complete without a PDP computer. By today's standards, there was more
power in a pocket calculator, as there was in the PDP-8. It was also relatively large, weighing
250 pounds, and came in a rack-mounted unit which was over 6 feet tall. However, the PDP
range was much cheaper than IBM mainframes. For example, the PDP-1 sold for $120 000,
while the comparable IBM computer cost millions. The PDP range also introduced comput-
ing to many young minds. Two exceptional minds, Bill Gates and Paul Allen, cut their teeth
on a DEC PDP-8, where they wrote programs to support the BASIC programming language.
The next great winner for DEC was the VAX (Virtual Address eXtension) computer
which cost billions to develop, but was a great technical and commercial success. It covered
the complete range of computer hardware from basic terminal interface up to large main-
frame computers. For the first time, DEC produced every part of the computer system: the
operating system, the hardware and the software. One of the great successes of the VAX
range was the VMS operating system (produced by David Culter). It allowed computer pro-
grammers to create programs which had more memory than the computer actually had (a
virtual memory), and allowed several programs to run at the same time (multitasking). After
the success of VMS, David Culter eventually went on develop a RISC operating system, but
DEC management cancelled the project. After this he left DEC in disgust and went to Micro-
soft to lead the development of the Windows NT operating system. Microsoft and Intel have
strong recruitment policies, and often hire the best brains in the computer industry.
In these days of networked computers, it is difficult to believe, but, at the time, the VAX
range was a radical concept. Before VAX computers, DEC, with their PDP range, was never
touched $7.6 billion. Unfortunately, DEC's bubble burst for two reasons. The first was the
really a threat to IBM's core market in mainframes. However, the VAX range was. The fu-
ture looked destined to be DEC's, and not IBM's. In 1986, their sales reached $2 billion, and
soon recession of the 1990s. It was a situation that many companies had difficulty coping
with, but it could not be avoided. The only reason was one that could have been avoided if
DEC had realized the changing market, and the power of the new 16-bit microprocessors. It
was basically the IBM PC which eventually beat IBM's mainframes and DEC's minicom-
puters on performance, at a fraction of the price, from whichever company you wanted. DEC
actually, in 1979, had the opportunity to enter into the PC market when they allowed Heath-
Kit to sell the PDP-11 minicomputer in kit form. At the time, DEC believed there was more
profit to be made with corporate clients, thus didn't really believe there was a great market
for PCs. Ken Olsen believed that PCs were a passing fad that would never really evolve into
proper computers. Many computers at the time were bought, played with, and then put in the
cupboard, never to be used again. The great advantages with personal computers were that
they were designed for individuals, whereas minicomputers where designed for businesses.
DEC struggled though the 1990s and could never regain their dominance. As with IBM's
mainframe business, they relied on their existing customer base buying their new products. A
well-known brand name, with its associated image is extremely important for corporate com-
panies when they buy computers. Most companies believe that brand names such as DEC (as
they were), IBM, Compaq and Dell are associated with reliable and well-built products.
Companies buying the brand name kept DEC's brand alive in many cases. As many compa-
nies used DEC equipment, DEC in the 1990s was still a well-respected brand name. They
showed that they could innovate and lead the market with one of the most respected RISC
processors ever made: the Alpha. This had a blistering performance and is still used in many
workstations. It would take several years before Intel could even match the power of the
Alpha device. Unfortunately, DEC failed to support the processor with the required software.
DEC, as IBM had, had always seen itself as a computer hardware company, and not a soft-
ware one.
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