Those of us that have been in IT since sometime in the previous century (sounds so much better when you say it like that to your kids) can’t resist sometimes harking back to days of old.
Whether it’s tales of outrageous vendor conferences and how many golf carts and/or hotel minibars it’s possible to cause serious harm to in a single weekend or how it was so much easier to sell back then as customers knew little to nothing about technology.
I thought it would be interesting to look back over the last few decades and see what happened to some of the once famous brand names and see if there were any lessons that could be learned and applied to what’s happening in the industry today.
Although most famous for PCs, Amstrad was actually founded in the late 1960s by a 21-year-old Alan Sugar (the name came from his initials (Alan Michael Sugar Trading).
After a pretty mediocre start making low end TVs, Hi-Fis and car stereos, Amstrad seized on the idea of entering the burgeoning PC game in the late 1980s and really hit their stride making IBM compatible PCs at prices well below the competition at the time.
But Amstrad’s downfall was driven by a series of quality issues associated with its PC range and although some were arguably the fault of suppliers (Amstrad like a lot of PC makers was really an assembler of 3rd party components), the brand never recovered and they eventually pulled out of the market to focus on making satellite receivers.
Where are they now? Amstrad was bought by the British satellite TV provider BSKYB in July 2007 and continues to make satellite boxes today.
Compaq and Digital Equipment Corporation
Familiar names to all non-digital natives. Compaq was formed in 1982 and grew over the course of the next decade grew to be the largest producer of PCs in the world – in part driven by IBM’s decision to move to a completely new PC architecture (PS2) that was incompatible with everything else in the market (remove gun from holster, take aim at both feet, fire).
Still, partners all of the world rejoiced and quickly helped Compaq fill the gap IBM created and they went from strength to strength in both desktops and servers and were responsible to a large extent for the huge growth in channel partners around the world.
As the PC market began to get saturated they looked for ways to expand the business outside of PCs and decided to buy Digital Equipment Corporation for the (relatively) bargain price of US$9 billion.
Digital was a strong market leader with its VAX and PDP products as customers moved from mainframes to mini-computers and at its peak employed over 120,000 people.
As we know though the IT industry never stands still and they missed the next wave as the same customers that bought their mini-computers started to buy PCs instead.
Sales plummeted and Digital scarcely made a profit during the late 90s and by the time Compaq bought them had less than half the staff they had at their peak.
At the time, this was the biggest ever merger in the IT industry and it didn’t go well as the two companies had markedly different cultures (just ask anyone working in either company at the time).
Also, Digital at that time had become primarily a services business which proved difficult to integrate with the channel only model of Compaq, ultimately resulting in significant layoffs, reported at the time to include 15,000 Digital employees.
Where are they now? Hewlett-Packard bought Compaq in 2002 for US$24 billion and proceeded with one of the largest integration projects ever undertaken in the industry including layoffs reportedly totalling close to 20,000 people.
The Compaq brand has been pretty much erased from the market over the last few years with the exception of Argentina where someone bought the rights to the name and has launched a range of Presario PCs – seriously, check out this link.
AltaVista came to life originally within Digital Equipment Corporation (DEC) as a result of researchers trying to make it easier to find information and files on the public network.
The company launched in 1995 using a minimalist user interface combined with high powered back end servers and smart crawler technology and became the first searchable, full-text database of what was then the World Wide Web.
Any of this sounding familiar? AltaVista was a huge success getting close to 100 million hits per day by 1997. Then in 1998 Compaq came along and bought DEC and with it the AltaVista business.