Thursday, April 3, 2008

HP as a Computer Company?

An interview with either Dave Packard or Bill Hewlett at the end of the First Public Decade (1967) would not have given an erstwhile investor any reason to think that this company would be a growth vehicle in the high-tech computing space. When Packard left HP in February 1969 to become Deputy Secretary of Defense in the Nixon administration, HP had grown enormously – to 15,000+ employees and 17 divisions across the globe by early 1969 from a small Engineering Services orientation at the outset, . Measured from first revenues for deliveries to the government in 1942 during the war effort, Packard led the company through growth of five hundred times in the next twenty-six years – a compounded growth rate of 27% for nearly three decades.
The Hewlett-Packard Company knew what it was – an electronic instrument company, defined around the predicate of building tools for engineers and scientists – and it pretty well knew what it wasn’t. The thought of entering a world served by back-office machinery was almost heretical – (a) IBM and AT&T were HP’s largest customers, and (b) IBM was already known for ruthlessly competing against ‘the seven dwarfs’ – themselves each ten times larger than HP, with far longer pedigrees in electricity and radio – it must have been nearly unthinkable to the founders.[i]
Nonetheless, because of issues with Digital Voltmeters (DVMs) making too many measurements for a technician to write them down fast enough, HP entered the computer business. The HP 2116A Computer was illustrated on the cover and described in the March 1967 HP Journal issue.[ii] Packard was insistent on calling it an instrumentation controller, but the front panel label said it was a computer.[iii] Over the first year, only five 2116A machines were sold to the outside world, all by one salesman (Dick Slocum) in the Eastern Sales region.[iv]
What on earth was going on?

[i] The Seven Dwarfs: Burroughs, Control Data Corp (CDC), GE, Honeywell, NCR, RCA, and Univac. [ii] Magleby, Kay. B., “A Computer for Instrumentation Systems”, HP Journal (18:7), March 1967, pp. 2-10; also “Successful Instrument-Computer Marriages”, Ibid, pp. 11-12. [iii] From Robert Grimm correspondence, December 4, 2005: “The article and other text followed Packard’s desire, but the simple ‘2100A Computer’ designation was arrived at after much discussion and debate, in line with the labeling of other HP products.” [iv] “Hewlett-Packard Corporation: Computer Division”, Case S-M-150R, Stanford Graduate School of Business, 1973.


Steve Witten said...

OK, I'll post the first comment. I worked in the computer side of HP for most of my career. The 5 years or so I worked in the instrument group were on specialized computer systems -- a packet sniffer and a database system for big pharma companies.

One of the problems that I continually faced in the computer side of HP was that HP management really never understood software. Chuck was one of the few.

I remember going to an all-HP software developers conference in the late 1980's and listening to John Young rail about how unproductive software engineers as a group were and how soft the metrics were. The audience was aghast... this was supposed to be an inspiring speech!

Of course, there was the infamous Rick Belluzzo decision to scale back investment in HP-UX because WindowsNT (at a mere 3 years in the market) was going to take over the world and become THE dominant enterprise OS.

It wasn't until the late '90s when a team of software professionals was installed into general managerial positions that this began to change.

I'm sure my compatriots in the HP software wars have many other anecdotes. I don't mean to trash HP in anyway... I'm just stating a challenge that we all had to face...

chuck said...

The software conference that you reference, Steve, indeed featured John Young in a keynote address. He got to the end, asked for questions, and got one. His answer was brusque, explaining that where the questioner was wrong was "..." With that opening, it was not surprising that no more questions were asked.

HP had a very hard time with SW, including competition with ISV's, dealer channel conflicts, application software groups that wanted to run on SUN equipment, etc

The Computer History Museum is hosting two meetings in early June re the emergence of the ISV SW world for minicomputers and workstations. We could learn some lessons still...

sager said...

Nice post with awesome points! Can’t wait for the next one.

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