Digital Equipment Corporation, also known as DEC and using the trademark Digital, was a major American company in the computer industry from the 1960s to the 1990s. It was a leading vendor of computer systems, including computers, software, and peripherals, and its PDP and successor VAX products were the most successful of all minicomputers in terms of sales.
From 1957 until 1992 its headquarters were located in a former wool mill in Maynard, Massachusetts (since renamed Clock Tower Place and now home to multiple companies). DEC was acquired in June 1998 by Compaq, which subsequently merged with Hewlett-Packard in May 2002. Some parts of DEC, notably the compiler business and the Hudson, Massachusetts facility, were sold to Intel.
Digital Equipment Corporation should not be confused with the unrelated companies Digital Research, Inc or Western Digital, although the latter once manufactured the LSI-11 chipsets used in DEC's low end PDP-11/03 computers.
Initially focusing on the small end of the computer market allowed DEC to grow without its potential competitors making serious efforts to compete with them. Their PDP series of machines became popular in the 1960s, especially the PDP-8, widely considered to be the first successful minicomputer. Looking to simplify and update their line, DEC replaced most of their smaller machines with the PDP-11 in 1970, eventually selling over 600,000 units and cementing DECs position in the industry. Originally designed as a follow-on to the PDP-11, DEC's VAX-11 series was the first widely used 32-bit minicomputer, sometimes referred to as "superminis". These were able to compete in many roles with larger mainframe computers, such as the IBM System/370. The VAX was a best-seller, with over 400,000 sold, and its sales through the 1980s propelled the company into the second largest in the industry. At its peak, DEC was the second largest employer in Massachusetts, second only to the state government.
The rapid rise of the business microcomputer in the late 1980s, and especially the introduction of powerful 32-bit systems in the 1990s, quickly eroded the value of DEC's systems. DEC's last major attempt to find a space in the rapidly changing market was the DEC Alpha 64-bit RISC processor architecture. DEC initially started work on Alpha as a way to re-implement their VAX series, but also employed it in a range of high-performance workstations. Although the Alpha processor family met both of these goals, and, for most of its lifetime, was the fastest processor family on the market, extremely high asking prices were outsold by lower priced x86 chips from Intel and clones such as AMD.
The company was acquired in June 1998 by Compaq, in what was at that time the largest merger in the history of the computer industry. At the time, Compaq was focused on the enterprise market and had recently purchased several other large vendors. DEC was a major player overseas where Compaq had less presence. However, Compaq had little idea what to do with its acquisitions, and soon found itself in financial difficulty of its own. The company subsequently merged with Hewlett-Packard in May 2002. As of 2007 some of DEC's product lines were still produced under the HP name.
Ken Olsen and Harlan Anderson were two engineers who had been working at MIT Lincoln Laboratory on the lab's various computer projects. The Lab is best known for their work on what would today be known as "interactivity", and their machines were among the first where operators had direct control over programs running in real time. These had started in 1944 with the famed Whirlwind, which was originally developed to make a flight simulator for the US Navy, although this was never completed. Instead, this effort evolved into the SAGE system for the US Air Force, which used large screens and light guns to allow operators to interact with radar data stored in the computer.
When the Air Force project wound down, the Lab turned their attention to an effort to build a version of the Whirlwind using transistors in place of vacuum tubes. In order to test their new circuitry, they first built a small 18-bit machine known as TX-0, which first ran in 1956.[5] When the TX-0 successfully proved the basic concepts, attention turned to a much larger system, the 36-bit TX-2 with a then-enormous 64 kWords of core memory. Core was so expensive that parts of TX-0's memory were stripped for the TX-2, and what remained of the TX-0 was then given to MIT on permanent loan.
At MIT, Olsen and Anderson noticed something odd: students would line up for hours to get a turn to use the stripped-down TX-0, while largely ignoring a faster IBM machine that was also available. The two decided that the draw of interactive computing was so strong that they felt there was a market for a small machine dedicated to this role, essentially a commercialized TX-0. They could sell this to users where graphical output or realtime operation would be more important than outright performance. Additionally, as the machine would cost much less than the larger systems then available, it would also be able to serve users that needed a lower-cost solution dedicated to a specific task, where a larger 36-bit machine would not be needed.
In 1957 when the pair and Ken's brother Stan went looking for capital, they found that the American business community was hostile to investing in computer companies. Many smaller computer companies had come and gone in the 1950s, wiped out when new technical developments rendered their platforms obsolete, and even large companies like RCA and General Electric were failing to make a profit in the market. The only serious expression of interest came from Georges Doriot and his American Research and Development Corporation (AR&D). Worried that a new computer company would find it difficult to arrange further financing, Doriot suggested the fledgling company change its business plan to focus less on computers, and even change their name from "Digital Computer Corporation".
The pair returned with an updated business plan that outlined two phases for the company's development. They would start by selling computer modules as stand-alone devices that could be purchased separately and wired together to produce a number of different digital systems for lab use. Then, if these "digital modules" were able to build a self-sustaining business, the company would be free to use them to develop a complete computer in their Phase II. The newly christened "Digital Equipment Corporation" received $70,000 from AR&D for a 70% share of the company, and began operations in a Civil War era textile mill in Maynard, Massachusetts, where plenty of inexpensive manufacturing space was available.
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