Thursday, April 3, 2008

The Computer World -- Smaller than you'd think in 1964

In the fall of 1964, Digital Equipment Corporation was finishing its eighth year in business, founded by students from Wes Clark’s pioneering computers at MIT. The company had produced the PDP-1 through PDP-6, and was ready to debut the PDP-8. It is hardly realized, however, that DEC had delivered only 118 computing machines in its first eight years – not exactly re-writing history yet – as the later PDP-8 and PDP-11 would.[i]
Professorial Dr. An Wang, inventor of core memory at Harvard, by now had built an electronic calculator company, Wang Labs, competing with Burroughs for financial tools in the small-office arena. "The Wang 4000 Computer System, was informally introduced at the annual IEEE conference in New York, in March of 1967.... (It) was formally introduced at the BEMA (Business Equipment Manufacturers Association) show in New York in late October 1967. By December, orders had been booked for seven (units).... Clearly the 4000 had a broad potential market. [ii]
Note the context of the times. Nine months of Wang marketing yielded seven orders. Digital Equipment sold 118 true computers in eight years. Burroughs built the lowest cost mainframes at the time; they sold 106 Datatron machines from 1954 through 1960.[iii]
Three separate leading companies – sales volumes of one to two units per month over a decade. No one, except IBM, had any unit volume. Even IBM’s volumes were small in unit terms. In 1963, IBM shipped roughly thirty systems per month, twice that of the Seven Dwarfs combined. Over the next three years, as System 360 began deliveries, General Electric and RCA were already beginning to concede the computer business

[i] Douglas Jones at the University of Iowa has a website devoted to DEC PDP history. The site is hosted at Ohio State Univ. DEC had sold nearly 1000 run-time controllers (PDP-5) by then – e.g. embedded controllers for air conditioners, akin to gas pump controllers today, but only 118 true computing machines. Revenues for 1964 had fallen, from $1.2 Million to $980,000, as the company readied the PDP-8 for market. Packard offered 25x current revenue, strikingly similar to the inflated prices of the era forty years later. The deal was struck, but came apart the next day as the two garrulous men assessed each other with baleful eyes.
[ii]; see Benzene, Rick, “Wang Laboratories: From Custom Systems to Computers”, article for the Old Calculator Museum, Boston, MA, October 2001. See also An Wang, Lessons: An Autobiography, Addison-Wesley and Wang Institute, Boston, MA, 1986. The April 24, 1967 "Product Engineering", McGraw-Hill, wrote up the 4000 introduction, p. xx.
[iii] George Gray, “The Burroughs B220 Computer”, Unisys History Newsletter, Vol. 5, #2, April 2001. Consolidated Electro Dynamics à Datatron 205 at the Babbage Institute, MN.
[iv] Chandler, Alfred D. Jr., Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, Free Press, NYC, NY, 2001, pp. 86-103

1 comment:

chuck said...

Gordon Bell, speech 11 Oct 2006 re "Birth and Passing of Mini's", said DEC spent $1.8M in R&D in 1964(1/6 of rev). This would say that Packard's offer was 2.5x, not 25x, revenue. The PDP-6 was priced at $300K for a minimal system; intro'd in 1964, MIT bought most of the 23 total specialized machines over the next year. The $980K rev thus were "commercial" sales only, mostly PDP-5 run-time controllers.