30 years later, Compaq leaves a legacy that benefits you

To hear Rod Canion and his fellow co-founders of Compaq Computer Corporation tell it, Compaq was an amazing company during its 20-year existence. From humble beginnings on farmland north of Houston to the Fortune 500 list, Compaq was the undisputed global leader of the PC industry for a number of years. Now Canion is defining his company's legacy -- one that you have benefited from greatly.

On Nov. 4 in Houston, Compaq Computer Corporation co-founder and former CEO Rod Canion called a company meeting to order. Standing beside him were fellow co-founders Jim Harris and Bill Murto. Sitting in front of the three company fathers were close to 1,000 former Compaq employees -- which the former executives referred to as "the Dream Team." They had all gathered to celebrate the 30th anniversary of the birth of Compaq.

Canion told his colleagues the story of how Compaq came to be. He, Harris and Murto were all managers at Texas Instruments in the early 1980s. Seeing opportunities that new technology was opening, the three men decided to start a company of their own. They PC industry was nascent at the time, and they decided to toss their hats into the ring. They incorporated as Gateway Technology -- an attempt to hide their intentions of being a computer company -- and hired a small team of engineers who got to work designing a portable (luggable) personal computer. And yes, the story of drawing the first image of the computer on a place mat at a pie shop is true.

COMPUTER HISTORY: The first 2,000 years

It took Gateway Technology eight months to bring its first product to market on Nov. 4, 1982, at which time the company took the Compaq name. Canion said they expected to create a big company, but they never expected it would become the worldwide market leader in personal computers.

Thirty years after Compaq's launch onto the scene, Canion is getting nostalgic about what his company's legacy will be. He is writing a book, "The Compaq Revolution: An American Success Story," to tell the company's story and claim credit where credit is due. (As we all know, Compaq was absorbed by HP in 2002. HP retained the worldwide PC leadership position until Lenovo recently claimed the title.)

In his 30th anniversary company meeting, Canion listed just a few of Compaq's accomplishments in its short span of two decades: 

• Compaq had the best first year of sales of any company in American business history -- $111 million. 

• This was the youngest-ever firm to make the Fortune 500 list. 

• In 1987, Compaq hit the $1 billion revenue mark, taking the least amount of time of any company in history to reach that milestone. 

• Compaq was the first company to introduce a computer built on the Intel 80386 chip, beating IBM to market with a new generation of computers.

The former employees listed their own company accomplishment: being one of the greatest place to work, at least in Compaq's early years. One person shouted out to Canion, "This company was like a family!" Hundreds of people nodded their heads in agreement, including the founders.

While these and other achievements are noteworthy, Canion says that Compaq's legacy is that it stayed true to its roots as being "industry standard." That legacy carries through even now in that the devices and software we use today are not proprietary and divisive, even as we transition from PCs to smartphones and tablets. Canion reminded his team of the back story of creating an industry standard.

When Gateway Technology got underway, the mission was to create a personal computer that was highly compatible with the IBM PC, the de facto industry standard at the time. This would allow the new computer to run the same software that was already being developed for the IBM PC market. The mission proved successful -- a little too successful, perhaps, in IBM's view.

When IBM tried to take the computer industry in a new direction several years later with the proprietary MicroChannel Architecture, Compaq stayed with the Extended Industry Standard Architecture (EISA) bus, and the rest of the PC market followed Compaq's lead. The key thing here is that existing software and peripherals were not made obsolete -- as they were with IBM's MCA bus. This made possible the PC boom of the 1990s, followed by the worldwide adoption of the Internet, and eventually mobile computing as we know it today.

Microsoft and Intel were in many ways led behind the scenes by Compaq with technology that in time led to the "Wintel" platform becoming dominant. Because of this market standard, we could all buy a PC from a vendor of our choosing and not worry about application software or peripherals like printers being incompatible with the PC platform. This is, indeed, quite an important legacy started by Canion, Murto, Harris and the Dream Team they assembled in those early days.

Rod Canion's book will be available in its entirety soon. In the meantime, you can get a teaser version from Amazon.com today. Take a stroll down memory lane with this recounting of the inside story of the PC industry and how it got us to where we are today. Oh, and happy 30th anniversary to Compaq and its people!

Linda Musthaler is a principal analyst with Essential Solutions Corporation. You can write to her at LMusthaler@essential-iws.com.


About Essential Solutions Corp:

Essential Solutions researches the practical value of information technology, and how it can make individual workers and entire organizations more productive. Essential Solutions offers consulting services to computer industry and corporate clients to help define and fulfill the potential of IT.

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