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.