DEC Is Dead, Long Live DEC, the book.

DEC Is Dead, Long Live DEC, the book.

Post by Didier Mor » Thu, 23 Oct 2003 02:12:35


DEC Is Dead, Long Live DEC
The Lasting Legacy of Digital Equipment Corporation

A new book by Edgar H. Schein. Read the Press Release
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DEC Is Dead, Long Live DEC, the book.

Post by n.riec » Wed, 08 Dec 2004 20:17:25

I am just (Dec-2004) in the middle of reading of reading this
fascinating look at the world of DEC (warts and all) from before 1956
through the Compaq and HP years. I know that everyone takes a stab at
arm-chair quarterbacking so here is my two cents worth:

"I think DEC would still be around if:

1. Ken Olsen wouldn't have been forced out

2. The board of directors would have mandated a graceful 1-2 year
transition to a new leader with Ken Olsen playing the role of mentor.

After all, he ran the company from 1956 to 1992 and there were only two
years when the company wasn't profitable. How many companies can make
this claim?

On a slightly different point, Compaq on a buying spree in the late
1990s might be considered the "canary in the coal mine" for the
"" melt down of the early 2000s. Compaq bought stuff they
shouldn't have and this behavior reminds me of something that Nortel
was doing.


DEC Is Dead, Long Live DEC, the book.

Post by JF Meze » Wed, 08 Dec 2004 21:08:58

In hindsight: Olsen should have begun to groom his successor back in 1985 to
1986 timeframe, and passed the torch by 1990.

By the time Palmer took over, DEC had begun to sink, and Palmer wasn't
competent enough to turn the tide.

Had Olsen begun to groom a replacement earlier, by the time the board got
tired of Olsen, there would have been a clear replacement who was competant
and Olsen wouldn't have resisted leaving until forced to since he would have
known his replacement would have taken good care of the company.

I'd say from 1987 onwards, Olsen didn't run the company. It was on autopilot
with small kingdoms (departments) going their own ways and no clear strategic
pricing/marketing to attack the new compatition (Sun, Apollo etc).

Nortel went on a binge and suffered severe indigestion. But some of their
purchases were strategic. Nortel was, by today's standards, a telephony
dinosaur. By investing in Bay-Networks for instance, Nortel entered the
router/switches market which will be the new telephone switches with IP
telephony. Had Nortel remained with its old legacy equipment, it would have
been made irrelevant. Very fast.

Similarly, Compaq's purchase of Digital wasn't so stupid. If they foresaw that
wintel junk would have every decreasing profit margins, while consulting
companies made lots of money, then getting into trhe services sector was smart.

IBM went with a winner (PriceWaterhouse) to complement its already strong
services sector. Compaq chose a sick/dying loser and inherited products it
didn't want. For Palmer, it was an easy way out without admitting he was incompetant.

had DEC hired Lou Gerstner, Compaq might have bought a decimated IBM, and DEC
might be the biggest company today.

DEC Is Dead, Long Live DEC, the book.

Post by Neil Riec » Wed, 08 Dec 2004 21:58:04


I agree. But someone (in this case "The Board") didn't think it was
necessary to replace a technical guy with a technical guy. Palmer didn't
have Olsen's passion for the computer business and I suspect this could be
the downfall of most companies doing the same thing.


The Nortel purchase of Bay Networks (who previously Synoptics) was very
smart but once this process started they couldn't stop. There are many
explanations for the Nortel fiasco but the two main ones are:

1. buying up worthless companies and paying for them with your valuable
stock (which only servers to dilute it)
2. noticing huge profits in the fibre optic portion of their business (I
think it doubled every year from 1997 to 2001) which made them think "what
do we need all this other stuff for?". As anyone familiar with science will
tell you, the only thing that can double every so often without an restraint
is cancer. Nortel should have kept a larger interest in their Access Node
business as well as their PBX and DMS switch business.

Once Compaq purchased Tandem (1997) and DEC (1998), they didn't know what to
do with them because they only had expertise in running a PC business.

On this point we are in full agreement.

Neil Rieck
Ontario, Canada.

DEC Is Dead, Long Live DEC, the book.

Post by John Smit » Thu, 09 Dec 2004 00:06:08

DEC's BoD were a bunch of old farts (age-wise) by then and also were not so
nimble in understanding the changing nature of the marketplace. Compaq's BoD
was just ignorant.

DEC Is Dead, Long Live DEC, the book.

Post by Steve Lion » Thu, 09 Dec 2004 00:14:04

I read it earlier this year and also found it fascinating, having been a
DECcie from 1978 onwards. It's been a while since I read it, but my memory is
that it doesn't really cover the post-KO years in any useful level of detail.

Many of us have played the "if only..." game, but I've given up on that. More
insightful is the latter section of the book detailing how the diaspora of
DECcies has instilled parts of the DEC culture in many major players in the
computer industry. Heck, here at Intel, I keep running across former DECcies
in addition to the ones I work with directly. Don Harbert, for example, is
once again in my management chain! Lots of chip design and manufacturing
people from DEC have found their way to Intel, AMD and other influential
players. Closer to home, the Intel Fortran compiler (and to a lesser extent
the C++ compiler) have a sizeable "DEC" component.

So, indeed, DEC is dead as a company, but in another sense it is very much
still alive, and this is good.


DEC Is Dead, Long Live DEC, the book.

Post by Lee Witte » Thu, 09 Dec 2004 09:44:11

My $0.02: No one was minding the store. No one had any idea what was
really bringing in the profits, so they went with whatever the current
industry buzz was. Compare and contrast IBM and DEC. It's a valid
comparison, because for a while DEC was the #2 computer company in the
world. While both did PCs, IBM made sure to keep protecting its in-house
products (s/3xx mainframe, as400 mini, etc) because they brought in the
profits, while DEC blindly went to PCs lock stock and barrel with the
infamous NT Affinity program. At the time everyone could see that giving
your installed base to Microsoft was a non-starter, that is everyone but