Open: How Compaq Ended IBM's PC Domination and Helped Invent Modern Computing

Open: How Compaq Ended IBM's PC Domination and Helped Invent Modern Computing

Rod Canion

Language: English

Pages: 256

ISBN: 1937856992

Format: PDF / Kindle (mobi) / ePub

The story of Compaq is well-known: Three ex-Texas Instruments managers founded Compaq with modest venture funding. Just four years later, Compaq was on the Fortune 500 list, and, two years after that, they had exceeded $1 billion in annual revenue. No company had ever achieved these milestones so rapidly.

But few know the story behind the story. In 1982, when Compaq was founded, there was no software standardization, so every brand of personal computer required its own unique application software. Just eight years later, compatibility with the open PC standard had become ubiquitous, and it has continued to be for over two decades.

This didn’t happen by accident. Cofounder and then CEO Rod Canion and his team made a series of risky and daring decisions—often facing criticism and incredulity—that allowed the open PC standard marketplace to thrive and the incredible benefits of open computing to be realized.

A never-before-published insider account of Compaq’s extraordinary strategies and decisions, Open provides valuable lessons in leadership in times of crisis, management decision-making under the pressure of extraordinary growth, and the power of a unique, pervasive culture.

Open tells the incredible story of Compaq’s meteoric rise from humble beginnings to become the PC industry leader in just over a decade. Along the way, Compaq helped change the face of computing while establishing the foundation for today’s world of tablets and smart phones.

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products, including a large number of compatibles from major competitors, and a dozen new portable computers. Out of all the noise and turmoil, our three-week-old Compaq Portable walked away with “Best in Show.” I was stunned. I believe it was mostly due to the fact that our portable was the only product at the show able to run all the software available for the IBM PC. That told me we were well ahead of other compatibles. In an article that appeared in Inc. magazine after the show, I was quoted

incredible energy that seemed to impress the media and analysts present. Employees left the meeting more pumped up and motivated than ever. The Compaq engine was hitting on all cylinders. Our decision to wait on a higher-performance 286 chip succeeded in strengthening our positioning and fueled a third year of record sales. Our shift to the NYSE and our entry into the rarified air of the Fortune 500 resulted in an incredible flow of positive publicity. The addition of the Portable II further

presentation. Although most of our product announcements had required less than thirty minutes, we were going to have to work hard to keep this one under a full hour. One question particularly concerned me: “What happens when IBM introduces a 386 PC that is different from yours?” I wanted to be able to answer that one so convincingly no one would be left with any doubt. We decided to have key industry leaders speak during the presentation, strongly supporting our new product’s importance and

the tone of my answer sounds like I have some knowledge of what IBM is going to do, in fact I don’t. I’m simply trying to head off any possibility that a reporter or analyst might form a negative opinion about the Deskpro 386’s chance for success. Subsequent events will indicate that IBM did not pay attention to what I said, although hindsight will eventually show it should have. I close with a prediction of my own. “So far, the benefits of the personal computer revolution have been dramatic.

high-performance 486 processor on time, it would give IBM, Sun Microsystems, and others the opportunity to tear down the open-industry-standard empire. APRIL 4, 1989, 11:00 A.M. I knock on the door of a small hotel suite in Silicon Valley. Bill Gates opens the door and invites me in. Already in the room are Andy Grove and Gordon Moore, president and chairman of Intel respectively. The four of us exchange greetings and then sit down around a table. I jokingly ask, “Who called this meeting?”

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