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SOURCE (OR PART OF THE FOLLOWING SOURCE):
Type PhD thesis
Title Digital Equipment Corporation (DEC): A case study of indecision,
innovation and company failure
Author(s) D.T. Goodwin
Faculty FEB: Amsterdam Business School Research Institute (ABS-RI)
Year 2016
FULL BIBLIOGRAPHIC DETAILS:
  http://hdl.handle.net/11245/1.539913
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Digital Equipment Corporation (DEC):
A Case Study of Indecision, Innovation and Company Failure
David Thomas Goodwin
Digital Equipment Corporation (DEC):

A Case Study of Indecision, Innovation and Company Failure

David Thomas Goodwin

1
Digital Equipment Corporation (DEC):

A Case Study of Indecision, Innovation and Company Failure

ACADEMISCH PROEFSCHRIFT

ter verkrijging van de graad van doctor
aan de Universiteit van Amsterdam
op gezag van de Rector Magnificus
prof. dr. ir. K.I.J. Maex
ten overstaan van een door het College voor Promoties ingestelde
commissie, in het openbaar te verdedigen in de Agnietenkapel
op donderdag 8 september 2016, te 12:00 uur

door

David Thomas Goodwin

geboren te Liverpool, Verenigd Koninkrijk

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Promotiecommissie:

Promotor: Prof. dr. P. van Baalen Universiteit van Amsterdam
Co-promotor: Prof. dr. W. Buitelaar Universiteit van Amsterdam

Overige Leden: Prof. dr. H.W.G.M. van Heck Erasmus Universiteit Rotterdam
Prof. dr. J. Strikwerda Universiteit van Amsterdam
Prof. dr. P.C. van Fenema Nederlandse Defensie Academie
Dr. ir. J.W. Stoelhorst Universiteit van Amsterdam
Prof. dr. L. Karsten Rijksuniversiteit Groningen
Prof. dr. E.J. Fischer Universiteit van Amsterdam

Faculteit Economie en Bedrijfskunde
3
Acknowledgements

I would like to thank a number of people without whose assistance this thesis
may never have been completed.

Firstly I should like to thank my promotor Prof. dr. Peter van Baalen and my co-
promotor Prof. dr. Wout Buitelaar, without whose guidance I would not have
completed my transition into a more academic thought process. Gordon Bell,
who directed me to the company archives and offered advice, Paula Jabloner,
chief archivist at the Computer History Museum for her assistance in my study
of the Digital Equipment Corporation archives, and to Dan Tymann for his
facilitation in allowing me unrestricted access to the Ken Olsen archives,
particularly obtaining the Olsen family permission and for allowing me to work
long hours at the archives. I would also like to acknowledge the assistance of HP
management who confirmed they would not seek to prevent my use of the
Notesfiles as part of my argument. Thanks are also given to Bob Glorioso for his
insight into the world of high performance computing and DEC’s RISC strategy.
I am particularly grateful to Don Gaubatz for his contribution on DEC
Workstation Engineering, his encouragement and assistance, and for giving me
access to his archives as part of my research. He facilitated contact with many
high-level former employees, without which a full understanding of events at
DEC would not have been possible. I would also like to acknowledge the many
ex-DEC people (some of whom wish to remain anonymous) who have given me
encouragement, have related personal recollections of their time at Digital and
provided many documents about technology and strategy. In particular, thanks
go to Dave Cutler for meeting me in Seattle and speaking so forthrightly about
DEC, Bob Supnik for his many emails on products, technologies and
management, Dileep Bhandarkar for his commentary on RISC and Bill Strecker
for his view of DEC after Gordon Bell’s departure. Last but not least, I would
like to thank my wife for her encouragement and patience during the years that I
have been researching DEC and for allowing me to visit the archives on a
number of occasions.

Most of all I dedicate this thesis to Ken Olsen, who was the father of the
company and to its employees for thirty-five years, and who sadly passed away
before I could complete.

4
Glossary

ACM Association for Computing Machinery
AMD Advanced Micro Devices
ARD American Research and Development
ARM Advanced RISC Machine
ARPA Advanced Research Projects Agency
AXP Alpha Processor Codename
BBN Bolt Beranek and Newman
BIPS Billions of Instructions per Second
BOD Board of Directors
CAD Computer Aided Design
CalTech California Institute of Technology
CEO Chief Executive Officer
CFO Chief Financial Officer
CMOS Complementary Metal-Oxide Semiconductor
CPSR Computer Professionals for Social Responsibility
DARPA Defence Advanced Research Projects Agency
DEC Digital Equipment Corporation
DECUS Digital Equipment Computer Users’ Society
DG Data General
DVN Digital Video Network
ECL Emitter Coupled Logic
EDS Electronic Data Systems
EDSAC Electronic Delay Storage Automatic Calculator
EDVAC Electronic Discrete Variable Automatic Computer
EMC EMC Corporation
EMCC Eckert-Mauchly Computer Corporation
EMEA Europe, Middle East and Africa
ENIAC Electronic Numerical Integrator and Computer
FAB Semiconductor Fabrication Facility
FBI Federal Bureau of Investigation
FTC Federal Trade Commission
GE General Electric Company
HP Hewlett Packard
HR-32 Hudson RISC, 32 bit.
IBM International Business Machines
IDC International Data Corporation
IEEE Institute of Electrical and Electronics Engineers
IPI Intelligent Peripheral Interface
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IT/MIS Information Technology/Management Information
Services
LCG Large Computer Group (DEC department)
LSI Large Scale Integration
MCI Telecommunications company
MICA Multi-personality Operating System
MIPS (architecture) Microprocessor without Interlocked Pipeline Stages
MIPS (company) MIPS technologies
MIT Massachusetts Institute of Technology
MTBF Mean Time Between Failures
NBER National Bureau of Economic Research
NCR National Cash Register
NFS Network File System
NIST National Institute of Standards and Technology
NUMA Non Uniform Memory Access
NVAX DEC VAX Microprocessor
OEM Original Equipment Manufacturer
OSF Open Software Foundation
PARC Palo Alto Research Centre
PCI Peripheral Component Interconnect
PDP Programmable Data Processor
PDT Programmable Data Terminal (DEC based LSI-11
microprocessor based system)
PM&D Product Management and Development
PRIME PRIME Computer Inc.
PRISM PaRallel Instruction Set Machine
PRO DEC’s PROfessional range of PC’s.
PRTM Pittiglio Rabin Todd & McGrath
QE2 Queen Elizabeth 2nd cruise liner.
R&D Research and Development
RISC Reduced Instruction Set Computing
RSX Resource Sharing eXecutive
SAFE Streamline Architecture for Fast Execution
SAGE Semi-Automatic Ground Environment
SAP System Analysis and Products in Data Processing,
(German Company)
SEC Securities and Exchange Commission
SG&A Selling and General Administrative Expense
SGI Silicon Graphics Inc.
SHOT Society for the History of Technology
SMP Symmetric Multiprocessing
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SPARC Scalable Processor Architecture
SPRU Science Policy Research Unit
SRA Systems Research and Applications
STF Strategic Task Force
SUN Stanford University Network
TCP/IP Transmission Control Protocol/Internet Protocol
TTL Transistor-Transistor Logic
UNIX UNiplexed Information and Computing System
VAX Virtual Address Extension
VLDB Very Large Data Base
VLSI Very Large Scale Integration
VMS Virtual Memory System
VNS Vogon News Service
VTX (DEC’s) Videotext service
VUP VAX Unit of Power
WRL DEC Western Research Laboratory
WWW World Wide Web

7
Contents
Acknowledgements .......................................................................... 4
Glossary ........................................................................................... 5
1 Introduction ............................................................................ 13
1.1 Introduction ..................................................................... 13
1.2 Research Question ........................................................... 14
1.3 DEC ................................................................................. 14
2 Failure, Innovation and Disruptive Technology .................... 16
2.1 Introduction ..................................................................... 16
2.2 Innovation and Failure..................................................... 17
2.3 Downsizing ...................................................................... 30
2.4 Rise of Silicon Valley...................................................... 34
2.5 Theoretical Perspectives .................................................. 36
2.6 Management of Technological Innovation...................... 40
2.7 Conclusion ....................................................................... 42
3 Methodologies Used .............................................................. 43
3.1 Introduction ..................................................................... 43
3.2 Comparison with other companies .................................. 44
3.3 Quantitative analysis ....................................................... 44
3.4 Qualitative analysis ......................................................... 45
3.4.1 Archives .................................................................... 48
3.4.2 Personal contact ...................................................... 49
3.4.3 Interviews and Survey .............................................. 51
3.4.4 Documentation and the Web .................................... 51
3.4.5 Strategy Documents ................................................. 52
3.4.6 VAXnotes and Notesfiles .......................................... 52
3.5 Summary ......................................................................... 54
4 Comparison with other companies ......................................... 55
4.1 Introduction ..................................................................... 55
4.2 IBM ................................................................................. 56
4.2.1 Brief analysis............................................................ 56
4.2.2 The IBM PC ............................................................. 61
4.2.3 How did IBM recover? ............................................. 62
4.2.4 IBM and the Internet ................................................ 63
4.2.5 The AS/400 and RS/6000.......................................... 64
4.2.6 Conclusion ............................................................... 64
4.3 HP .................................................................................... 65
4.3.1 Brief analysis ........................................................... 65
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