Last week’s acquisition of Palm by HP makes a clear statement: HP recognizes we are at the beginning of the end of the classical PC era — and we’re witnessing the birth of a new generation, really personal computers, currently called smartphones (and tablets).
HP doesn’t want to be left behind, as it has been with its iPaq line of Windows Mobile devices, nor does it want to join the race to the bottom, again, to make profit-challenged Windows Phone 7 or Android clones.
This brings to mind an almost forgotten episode in HP’s past, one exemplary turn of events to keep in mind when looking at companies who dominate a market — for a while.
Once upon a time, HP owned the Personal Computer market. Then, in a characteristic case of the Incumbent’s Curse, lost it.
What? HP lost the PC market? But they’re the market leader with more than $10B in sales in the latest reported quarter.
That’s in today’s version of personal computers, the Wintel machines.
But the idea, the desire for a personal computer is very old.
For HP, it starts in the late sixties. They buy a design from Tom Osborne, the founder of a company called Logic Design.
I highly recommend reading Tom Osborne’s own words, it’s a long piece but one of the best I’ve ever read in the genre. You’ll find gems like:
‘I remember the overwhelming realization that sitting in front of me on a red card table in the corner of our bedroom/ workshop, sat more computing power per unit volume than had ever existed on this planet. I felt more like the discoverer of the object before me than its creator. I thought of things to come. If I could do this alone in my tiny apartment, then there were some big changes in store for the world.’
And, later in the same piece, his involvement in two more seminal products, the HP 35 and HP 65 pocket calculators, the latter being programmable and incorporating a magnetic stripe reader:
‘My role in the HP 35 was quite different than that in the HP 9100. Except for the card reader and the power supply, I did most of the circuit design in the HP 9100. I did none of it in the HP 35. Instead, almost all of my effort went into prescribing functional characteristics. This time, I knew that someone would want the calculator that followed the HP 35 to be programmable. A couple of times, I dug in and argued for features that would grease the slides for the follow-on product, the HP 65 (which, I think, was the best product I ever worked on).’
I can’t resist adding this last quote:
‘We had no idea whether the HP 35 would be a success or a dud. (Before it was introduced, a market analysis by a major consulting firm had determined that it would fail because of the tiny keys and the RPN notation. In my opinion, it succeeded for those reasons.) Anyway, we gave it our all and found that it was so well received that overnight, it made the slide rule a relic.’
There is also an EDN interview of Tom Osborne here.
I was there. My biggest break in business, even bigger than being hired by Apple to start Apple France, happens when, in June 1968, HP France takes me off the streets. After dropping out of college and going through four years of what Californian therapists delicately call a “psycho-social moratorium”, I am ready, I get lucky.
HP hires me to launch Tom Osborne’s invention, the 9100A, the company’s first desktop computer, on the French market. In 1968, HP is a relatively small company, $250M in sales; it is the company David Packard describes in his soberly eloquent (and accurate) book, The HP Way, now regrettably out of print. That HP isn’t yet the unwieldy and process-manacled behemoth it later became.
The 9100A is expensive; in 1968, $5,000 is a lot of money ($31,000 in today’s dollars). Still, the techies for whom it was designed love it. They see autonomy, independence from the centralized, institutional computing resources provided by their employers. That spirit goes far, sometimes. Engineers at one aircraft company do want a 9100A for their work; management opposes on various and, the engineers say, capricious grounds: ‘We have big computers, use those.’ Or, ‘We can only buy French computers.’ Engineers being engineers, they craft a workaround: the company’s purchasing department gets a requisition for HP parts, the set needed to re-assemble the 9100A they lust after. This, being HP, is easy to do, the 9100A is “overdesigned”, I used to take the machine apart and rebuild it on the spot as a proof of the product’s maintainability, even by a certified klutz. Next, they have to keep their treasure hidden. They condemn a toilet by pouring plaster of Paris in the bowl, pad the seat, jury-rig a shelf as a desk and keep the door indicator stuck in the “occupied” position. Thus they compute in peace.
Ah, those unruly end-users…
While iterating the machine, adding exciting techie peripherals such as a plotter, HP execs are thinking. The company has a minicomputer business based on a 16-bit processor architecture. A bold decision is made: the next generation of HP’s desktop computers will use the same instruction set. But the 16-bit processor will be hidden under what we’d call a User Interface, a firmware layer making it look like an evolution of HP’s desktop machines. In rapid succession, starting in 1971, the 9810, the 9820 and 9830 are born. (The full HP museum of calculators is here.)
These three machines, while using the same underlying 16-bit instruction set, implemented in hardware of varying speed and cost, are incompatible. A program written on one would absolutely not run on the other.
The 9810 uses a “classical” key-per-function model inherited from the 9100, but different.
The 9820 comes up with a very ingenious, seductive “algebraic language”. So seductive it leads to contests for the on-line program that will do the most — and be inscrutable and unmaintainable as a result. Techie delights not unlike APL (an overly elegant programing language) perversions.
The 9830 sports a Basic interpreter, a programming language of emerging popularity.
A few improved variants follow, 9815, 9825, but the basic plot stays: a single underlying 16-bit architecture and three programmatically, philosophically different machines.
All very successful, because they attract different customers, and because they are very good, made and sold by a strong company. As a result, HP sweeps the field. Companies such as Wang and Olivetti were “there” before HP came in, others such as Hattori/Seiko and Tektronix joined the fray, they are all crushed by HP’s engineering prowess. (Not by the company’s painstakingly sexless marketing: the joke went that HP would pitch sushi as a small ball of cold rice — stating exact dimensions and weight — surmounted by a piece of dead fish.)
In today’s light, pushing three incompatible machines built on the same 16-bit processor architecture looks weird. Why not have one series of compatible machines? But, at the time, application software, developers, programming languages, APIs, application frameworks are either inexistent or not perceived as they are today.
In any event, the company is very successful — and also stars in the pocket calculator business.
Then, in the early 1970’s microprocessors happen.
They are 4-bit machines, 8-bit machines a little later. HP looks at them down its 16-bit nose: they’re nothing. But you know the rest of the story, the new micros are adopted by geeks all over the world because they, too, see what Tom Osborne saw in 1964: ‘more computing power per unit volume than had ever existed on this planet’.
MITS, Ohio Scientific are born, the former a client of Bill Gates’ Microsoft for a Basic interpreter. Then Radio Shack, Commodore and Apple rise and sell hundreds of thousands of machines.
(History buffs know why Wozniak and Jobs picked the 6502 microprocessor: it was available over-the-counter at the company, minimum purchase quantity one, $25 a piece. The two compadres took a bus to MOS Technology’s headquarters in Sunnyvale, got their processor and, according to their account, drooled over the tech documentation on their ride back home.)
The new personal computers built with these microprocessors are less powerful than HP’s 16-bit machines, the companies are less reputable. But the newcomers are cheaper, the programming tools are available from a variety of sources, some can be had in kit form — in 1976, I subscribe to a pulp rag published by Bell Labs geeks, Creative Computing, and try to get MITS Altair kit shipped to France, unsuccessfully.
HP loses the market to a swarm of scruffy interlopers. After trying its hand with its own CP/M based systems, HP finally joins the Wintel camp. In 2001, HP acquires the fallen king of PCs, Compaq, this after Compaq acquired DEC, itself the fallen king of minicomputers. Only then does HP regain the PC crown, taking it from Dell.
Was Sun a victim of the Incumbent’s Curse after dominating the server market in the dot.com era? Did their success blind them, did they fail to see that the PC clone organ bank would give rise to generations of less elegant machines running less elegant software — for a lot less money? Did they misjudge the flexibility afforded by Linux, and underestimate Intel’s monster manufacturing prowess? They’re now part of Oracle, an apparently unstoppable “incumbent”.
Did Yahoo! fall prey to the toxic waste of success, thinking they had won after defeating Altavista and Excite? Will they manage to matter again?
Intel for inexplicably getting rid of its ARM processor business, selling it to Marvell? Today, Intel has no traction in the new computing genre (I know, they just announced they’ll be back with a new generation of thrifty Atom processors.)
And, while we’re at it: Why not RIM, Nokia, Microsoft, or even Apple, Google?
The Incumbent’s Curse works like a neurotransmitter disease: it starts slowly, there is no brutal onset of symptoms. The patient’s good health of the moment encourages denial; but when the malady becomes obvious it’s hard to combat, it’s often too late.