Why Did the World’s Second Largest Computer Company Fail?
Founded in 1957, Digital Equipment Corporation was a juggernaut… until it crashed in the 1990s.
Change is a constant in the computer business, and there is no better proof than Digital Equipment Corporation, also known as “DEC.” If you’ve never heard of DEC, you may be surprised to learn it was the world’s #2 computer company in 1988 with $11.5 billion in revenue. Ten years later, the company was acquired and its name all but forgotten. Here’s the remarkable story of the meteoric rise of Digital Equipment Corporation… and its fall from grace.
A New Computing Concept
In the 1950s, computers for commercial use were just emerging. International Business Machines Corporation (IBM) introduced its mainframe computer in the early 1950s and by the 1960s was dominating the large computer market. MIT engineer Ken Olsen had a different idea. Working with fellow engineer Harland Anderson at MIT’s Lincoln Laboratory, Olsen saw the potential of interactive computing machines, as opposed to mainframes that operated via batch processing. Olsen and Anderson got the idea to start a company to build affordable versions of these machines for the benefit of scientists and researchers.
