Silicon Cowboys Page #4

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computer firms are battling

To succeed, one

personal computer

Company is more

concerned with taking

Its hardware success forward.

Kim frandois:
Our company

is real all of a sudden.

We have a name,

we're on the radio.

Steve flannigan:

We're getting calls

From presidents, and ceos,

and engineers saying,

This is a cool machine.

What I brought today is a

compaq portable computer.

It's a full functioning computer

in a portable enclosure.

John markoff:
People were

walking with portable computers

Down the aisles of

airplanes, and the computer

Was hitting people in the head.

Gary stimac:
We didn't hardly

have a chance to breathe--

People loved the product.

We couldn't build

them fast enough.

John markoff:
Trying to use

portable computers, which

Were not laptops at that point.

They were sewing machines on

the meal tray of airplanes.

The company's first product was

a 28 pound portable computer.

The salesman used to

demonstrate how rugged it is

By taking it and dropping it.

Howard anderson:

What compaq did,

Because they built

things so damn well,

Is they quickly went up to be an

acceptable alternative to ibm.

Announcer:
Its founders

decided early on

To build machines

compatible with those built

By ibm but with new features.

Market research showed

customers want it.

Steve flannigan:

Sometimes people

Wanted to go home

over the weekend

And finish their

work before Monday.

They grabbed a portable.

That really turned

out to be important.

Bill murto:
Product was

just flying off the shelves,

And the dealers loved it.

Announcer:
Salespeople

already familiar with ibm

Products didn't

need much training

To sell compaq computers.

Bill murto:
We meet a computer

land dealer in a little motel,

And there's no wall receptacle.

How am I gonna plug this in?

, well, the bathroom has one.

Ok, so we put the computer

on the toilet seat,

And we plug it in, and it ran.

And they went, wow!

Ben rosen:
The challenge

was building computers

Fast enough to meet the demand.

We had no idea that it was

going to be as big as it was.

We're cutting back on

advertising-- we can't cut back

On advertising, and rod

said, well, let me make this

Really clear-- we're sold out.

Announcer:
Compaq

computer corporation

Delivered its first

portable personal computer

In January of 1983.

By the end of the year, the

firm had sold $111 million

Worth of the machines.

A figure that company

executives say

Exceeded the first

year sales of any firm

In american business history.

Bill aulet:
That was

the first time where

There was a ripple at ibm.

That being said, we had seen

other people come in-- amdahl,

Hitachi-- and they

come and they rise,

And then they go back down.

And we will defeat

them in the end.

There was kind of a feeling

that something was going on

Out there with respect

to the pc world

And somehow or other

ibm wasn't getting

The share that it wanted.

Now, I know ibm was

getting a big share,

But they wanted more.

And so people started paying

a little bit of attention.

With a clone that is actually

offering more portability,

For example, becomes a

successful notion like that,

Then isn't it the case that ibm

would or even has gone in there

And taken that market

to some extent?

That's the danger of playing

the ibm compatible game.

There was complete conviction

among the wall street

Public and the press public.

Well, enjoy it while

you can because ibm

Is going to have a portable

and then it's sayonara.

Wall street hit a

record high again today.

One of the better performers was

ibm, up more than five points

This week alone.

One of the reasons

is ibm's huge success

In the tough home computer

market, and the rumor

That there is more to come.

What was ibm going

to do, and when

Was it going to actually happen,

and how successful would it be?

: We were

always concerned about ibm.

: I think anyone

else in the computer business

Ought to be very frightened,

and I think everyone else is.

Jim harris:
Ibm was arrogant.

Some manager got po'd at us and

said, kind of like a hitman,

Go design a portable and take

those guys out-- tired of them.

Announcer:
The compaq

personal computer's

Main selling point is its high

compatibility with the ibm pc.

Yet ibm is now bringing its own

portable pc to the marketplace.

Announcer:
It's

called the fud factor.

F-u-d for the fear,

uncertainty, and doubt created

Among its rivals by ibm.

Will there be life for

other home computers

After giant ibm's

product appeared?

What nobody outside

the company knew

Is that we had no

orders coming in,

So this wasn't really a

future hypothetical problem,

This was an immediate

problem that

Ross cooley:
Compaq's

stock went down

Because they were

concerned that ibm would

Put compaq out of business.

Bill aulet:
Compaq was the

first one in with the luggable.

Ibm put two products,

essentialy, in there,

And it doesn't do

nearly as well.

Rod canion:
They didn't

really try to make it better

And try to meet

compaq's advances

In technology and performance.

Their product would not

run all the software--

Their ibm software,

even their ibm software

People did to run

in their computers

Would not necessarily

run in their portable.

But you could take

that same thing,

And put it in our

portable, and it would run.

How could that be?

Of course ibm at the time

did the only obvious thing,

And they blamed the user.

You're not doing it

correctly, and the user said,

I may be dumb, but

I'm not stupid.

Why don't you come back to me

when you've got it figured.

I had heard from friends

of friends inside ibm

That there was a lot of

discussion and turmoil

Within their pc ranks.

Why is this happening?

Why is this little

company out-marketing us?

Announcer:
They've done a

little growing since they

Began in February of '82.

They had 6 employees then.

They have 950 now.

Two years ago, they

occupied the space

On one floor of this building.

By spring, it'll look like

this in one of their locations.

Well, production is up 1600%.

The worry now is they

won't get enough workers

To keep up the pace.

If you'd like to

apply to compaq,

You can call this number.

Compaq is looking to add 500

people by the end of the year.

Ben rosen:
The culture that

rod created within compaq

Was 20 years ahead of its time.

Alec berg:
Tech companies today

are very progressive, and cool,

And they create a

fun environment.

Where people aren't

working they're

Come play in our sandbox.

If I work at facebook,

they'll do my laundry,

They'll pick me up and drop

me off, there's a misuse,

And there's a full time chef

who is trained on cordon bleu.

They basically have built

a place that is so great

That you never want to leave.

At a time when other computer

makers are being squeezed,

Why is compaq still growing?

The answer may lie beyond

technology and marketing,

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