Compaq was founded in 1982 by Joseph R. “Rod” Canion and two other former engineers at Texas Instruments Incorporated. The company shipped its first personal computer the same year. Compaq experienced phenomenal growth, recording sales of $111 million in 1983. It established a reputation as a manufacturer of high-quality, relatively expensive PCs sold through exclusive dealers. Much of its business was directed at corporations. By 1988 the company’s sales had shot up to $2 billion, making Compaq the first company in the United States to reach that level within its first six years of operation.
In the late 1980s other manufacturers of personal computers began selling them at lower prices, deeply undercutting Compaq’s sales. In October 1991 the company announced its first-ever quarterly losses and laid off 1,700 employees, or 14 percent of its workforce. Canion was ousted as chief executive officer and replaced by longtime Compaq employee Eckhard Pfeiffer, who had built up the company’s European sales to $1.8 billion by 1990.
Pfeiffer began restructuring Compaq and pushing for the development and sales of lower-cost computers. In 1992 the company launched its ProLinea line of desktop personal computers, which were priced under $1,000 each. The computers sold briskly. Compaq introduced dozens of models of desktop and portable computers within a year. Compaq also began expanding its base of retail outlets, selling its products in high-volume discount stores and consumer electronics chains. By 1994 Compaq had surpassed International Business Machines Corporation (IBM) and Apple Computer, Inc., in worldwide sales of personal computers. In 1997 Compaq paid about $4 billion to buy Tandem Computers, a maker of computer systems for banks, telephone companies, and other large corporations.
In 1998 Compaq acquired Digital Equipment Corporation, a computer manufacturer, for about $9.1 billion. The merger made Compaq the second-largest computer company in the world (after IBM) and strengthened Compaq’s position in the markets for high-powered computers (such as workstations and servers) and for computer consulting for large corporations. In 2002 Hewlett-Packard’s acquisition of the company represented at the time the largest merger in the computer industry.
Hewlett-Packard Company, American electronics-equipment manufacturer, with headquarters in Palo Alto, California. The company primarily designs, manufactures, and services electronic products and systems for computation, analysis, and measurement. Hewlett-Packard (HP) offers more than 29,000 products and maintains manufacturing plants, research and development centers, warehouses, and administrative facilities in more than 120 countries. In 2002 shareholders narrowly approved a merger with Compaq Computer Corporation, the second largest personal computer (PC) manufacturer in the world. At the time the merger was the largest ever in the computer industry.
Sales of computers and related products and services have accounted for approximately 85 percent of the company's revenue. HP produced both single-user computers, such as workstations and personal computers, and multiple-user systems, such as minicomputers, as well as software, peripherals (including printers, plotters, and scanners), and network products.
HEWLETT PACKARD COMPANY HISTORY
With only $538, Stanford University engineers William Hewlett and David Packard started the company in 1939 out of a Palo Alto garage. Walt Disney, their first big customer, bought audio oscillators (electronic devices made to test sound equipment) to use in the making of the film Fantasia (1940) (see Electronics: Oscillators). In 1947 the business was incorporated. Founded as a test-and-measurement company, HP pioneered technologies such as the digital oscilloscope (an instrument used to test electronic equipment) and developed new applications for its computer technology in analytical and medical instrumentation.
During the 1970s and 1980s HP epitomized the young, entrepreneurial, high-tech companies of California's Silicon Valley. For years it topped lists of America's best-managed companies. In 1972 Hewlett-Packard introduced the revolutionary HP-35, the world's first handheld scientific calculator, and the HP-3000 for business computing. By the end of the decade, computer sales accounted for half of the company's revenues. In 1977 the founders chose Stanford alumnus John Young as their successor. Young presided over the introduction of HP's first desktop mainframe computer, first LaserJet printer, and first personal computer.
Despite its successes, by the late 1980s HP’s revenues had dropped, partly because of the company’s decision-making and organizational problems. In 1990 Young responded to declining earnings and production delays by consulting with founder David Packard, then the company's chairman of the board. In the fall of that year, Packard and Young announced their plan for reorganization, which involved cost cuts, voluntary severance, and enhancement of early retirement programs. In addition, the company's single sales force was divided along product lines, and manufacturing and administrative activities were consolidated. Throughout these organizational changes, the company continued to significantly invest in research and development.
Hewlett-Packard continued to lead the desktop laser-printer market in the early 1990s. By 1992 the company controlled 60 percent of the global laser-printer market. The company's closest competitor, International Business Machines Corporation (IBM), retained an 11 percent share of that market. Hewlett-Packard also dominated the ink-jet printer market by using a lower-cost technology than its competitors.
Corporation (IBM), one of the world’s largest manufacturers of computers and a leading provider of computer-related products and services worldwide. IBM makes computer hardware, software, microprocessors, communications systems, servers, and workstations. Its products are used in business, government, science, defense, education, medicine, and space exploration. IBM has its headquarters in Armonk, New York.
ORIGINS
The company was incorporated in 1911 as Computing-Tabulating-Recording Company in a merger of three smaller companies. After further acquisitions, it absorbed the International Business Machines Corporation in 1924 and assumed that company’s name. Thomas Watson arrived that same year and began to build the floundering company into an industrial giant. IBM soon became the country’s largest manufacturer of time clocks and punch-card tabulators. It also developed and marketed the first electric typewriter.
III DIGITAL COMPUTERS
IBM entered the market for digital computers in the early 1950s, after the introduction of the UNIVAC computer by rival Remington Rand in 1951. The development of IBM’s computer technology was largely funded by contracts with the U.S. government’s Atomic Energy Commission, and close parallels existed between products made for government use and those introduced by IBM into the public marketplace. In the late 1950s IBM distinguished itself with two innovations: the concept of a family of computers (its 360 family) in which the same software could be run across the entire family; and a corporate policy dictating that no customer would be allowed to fail in implementing an IBM system. This policy spawned enormous loyalty to “Big Blue,” as IBM came to be known.IBM’s dominant position in the computer industry has led the U.S. Department of Justice to file several antitrust suits against the company. IBM lost an antitrust case in 1936, when the Supreme Court of the United States ruled that IBM and Remington Rand were unfairly controlling the punch-card market and illegally forcing customers to buy their products. In 1956 IBM settled another lawsuit filed by the Department of Justice. IBM agreed to sell its tabulating machines rather than just leasing them, to establish a competitive market for used machines. In 1982 the Justice Department abandoned a federal antitrust suit against IBM after 13 years of litigation.
From the 1960s until the 1980s IBM dominated the global market for mainframe computers, although in the 1980s IBM lost market share to other manufacturers in specialty areas such as high-performance computing. When minicomputers were introduced in the 1970s IBM viewed them as a threat to the mainframe market and failed to recognize their potential, opening the door for such competitors as Digital Equipment Corporation, Hewlett-Packard Company, and Data General.
IV IBM PC
In 1981 IBM introduced its first personal computer, the IBM PC, which was rapidly adopted in businesses and homes. The computer was based on the 8088 microprocessor made by Intel Corporation and the MS-DOS operating system made by Microsoft Corporation. The PC’s enormous success led to other models, including the XT and AT lines. Seeking to capture a share of the personal-computer market, other companies developed clones of the PC, known as IBM-compatibles, that could run the same software as the IBM PC. By the mid-1980s these clone computers far outsold IBM personal computers.In the mid-1980s IBM collaborated with Microsoft to develop an operating system called OS/2 to replace the aging MS-DOS. OS/2 ran older applications written for MS-DOS and newer, OS/2-specific applications that could run concurrently with each other in a process called multitasking. IBM and Microsoft released the first version of OS/2 in 1987. In 1991 Microsoft and IBM ended their collaboration on OS/2. IBM released several new versions of the operating system throughout the 1990s, while Microsoft developed its Windows operating systems.
In the late 1980s IBM was the world’s largest producer of a full line of computers and a leading producer of office equipment, including typewriters and photocopiers. The company was also the largest manufacturer of integrated circuits. The sale of mainframe computers and related software and peripherals accounted for nearly half of IBM’s business and about 70 to 80 percent of its profits.
V RECENT DEVELOPMENTS
In the early 1990s, amid a recession in the U.S. economy, IBM reorganized itself into autonomous business units more closely aligned to the company’s markets. The company suffered record losses in 1992 and, for the first time in its history, IBM cut stock dividends (to less than half of their previous value). In 1995 IBM paid $3.5 billion to acquire Lotus Development Corporation, a software company, expanding its presence in the software industry. Beginning in 1996, IBM began increasing its stock dividends as the company returned to profitability. In 1997 an IBM supercomputer known as Deep Blue defeated world chess champion Garry Kasparov in a six-game chess match. The victory was hailed as a milestone in the development of artificial intelligence.In 1998 IBM built the world’s fastest supercomputer for the Department of Energy at the Lawrence Livermore National Laboratory. The computer is capable of 3.9 trillion calculations per second, and was developed to simulate nuclear-weapons tests. In 1999 IBM announced a $16-billion, seven-year agreement to provide Dell Computer Corporation with storage, networking, and display peripherals—the largest agreement of its kind ever. IBM also announced plans to develop products and provide support for Linux, a free version of the UNIX operating system.
Intel Corporation, leading manufacturer of microprocessors and integrated circuits. The company invented the microprocessor, which powers personal computers. More than 80 percent of the world’s personal computers use Intel microprocessors. The company also makes computer network products, memory products, servers, and supercomputers. Intel is based in Santa Clara, California
ORIGINS
The company was founded in 1968 when engineers Gordon Moore and Bob Noyce left Fairchild Semiconductor of Mountain View, California, to form their own company. The two were soon joined by Andrew Grove, who became chief executive officer of Intel in 1987. The name Intel came from the term integrated electronics.
Intel focused on making an affordable semiconductor that could hold enough memory to replace the magnetic core memory then used in computers. The company’s first successful products were the dynamic random-access memory circuit (DRAM) in 1970, which won acceptance among manufacturers of mainframe computers, and the erasable programmable read-only memory (EPROM) chip in 1971, which allowed memory to be erased and reused without reprogramming.
III INVENTION OF THE MICROPROCESSOR
In 1971 Intel developed the world’s first microprocessor, the 4004. The idea for the 4004 microprocessor came from Intel engineer Ted Hoff, who, while working on a series of 12 processing chips for a Japanese calculator company, suggested a central processing unit (CPU) on a single chip. At a size of 0.42 cm by 0.32 cm (… in by ˆ in), the programmable 4004 contained 2,300 transistors and had as much processing power as the first electronic digital computer, ENIAC, which had required 18,000 vacuum tubes and a large room.
The 4004 and the 8-bit 8080, introduced in 1974, were used in a number of products, from handheld calculators to traffic lights. The 8080 also powered the first personal computer, the Altair 8800. In 1980 International Business Machines Corporation (IBM) chose the 8-bit 8088 chip for its personal computer line, securing Intel’s position as the world’s top microprocessor manufacturer. The 8088 and its successors helped popularize personal computers.
Intel suffered some difficult times in the mid-1980s. In addition to a recession in the semiconductor industry, competitors cut the price of their DRAMs, the memory devices that had been a key product for Intel. The competition forced Intel to close eight plants and to stop producing DRAMs in 1985.
IV FASTER CHIPS
In 1982 Intel introduced the 80286 (or 286) processor, which was used to power the IBM PC/AT. IBM’s personal computers and IBM clones soon became the personal computers of choice for businesses. By 1988 the 80286 powered some 15 million personal computers. Intel continued to develop new chips with greater speed and processing power, introducing the 80386 (or 386) chip in 1985, the 486 chip in 1989, and the Pentium chip in 1993. Each became the industry standard. The Pentium Pro chip, introduced in 1995, contained 5.5 million transistors.
In 1996 a supercomputer built by Intel and the United States Department of Energy achieved a processing speed of more than one trillion operations per second, eclipsing the previous computing speed record of 368 billion operations per second. The supercomputer contained thousands of Pentium Pro processors, enabling it to operate by parallel processing.
In 1997 Intel introduced the Pentium processor with MMX technology, a feature designed to boost the performance of multimedia applications. Later that year Intel launched the Pentium II, a high-performance microprocessor containing 7.5 million transistors. The company subsequently introduced faster versions of the Pentium II as well as a low-cost Pentium II chip, the Celeron, designed for use in less expensive personal computers.
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