page_title: History of Digital Equipment Corporation
section_title: Origins
hierarchical_section_title: History of Digital Equipment Corporation / Origins
caption_attribution_description: English: Clock Tower Place, as seen from Main St.
context_page_description: Digital Equipment Corporation, was a major American company in the computer industry. Founded in 1957 with $70,000 of venture capital, it became "the nation's second-largest computer company, after IBM." Its initial major impact was in minicomputers, but its later-introduced VAX and Alpha systems are still notable.
  DEC was acquired in June 1998 by Compaq, in what was at that time the largest merger in the history of the computer industry. Not long thereafter, Hewlett-Packard bought Compaq,
  "creating a technology company second in revenue only to IBM."
  Aside from the company's extensive hardware and software accomplishments, it was also noteworthy for its use of Matrix management
context_section_description: Ken Olsen and Harlan Anderson were two engineers who had been working at MIT Lincoln Laboratory on the lab's various computer projects. The Lab is best known for their work on what would today be known as "interactivity", and their machines were among the first where operators had direct control over programs running in real time. These had started in 1944 with the famed Whirlwind, which was originally developed to make a flight simulator for the US Navy, although this was never completed. Instead, this effort evolved into the SAGE system for the US Air Force, which used large screens and light guns to allow operators to interact with radar data stored in the computer.
  When the Air Force project wound down, the Lab turned their attention to an effort to build a version of the Whirlwind using transistors in place of vacuum tubes. In order to test their new circuitry, they first built a small 18-bit machine known as TX-0, which first ran in 1956. When the TX-0 successfully proved the basic concepts, attention turned to a much larger system, the 36-bit TX-2 with a then-enormous 64 kWords of core memory. Core was so expensive that parts of TX-0's memory were stripped for the TX-2, and what remained of the TX-0 was then given to MIT on permanent loan.
  At MIT, Olsen and Anderson noticed something odd: students would line up for hours to get a turn to use the stripped-down TX-0, while largely ignoring a faster IBM machine that was also available. The two decided that the draw of interactive computing was so strong that they felt there was a market for a small machine dedicated to this role, essentially a commercialized TX-0. They could sell this to users where graphical output or realtime operation would be more important than outright performance. Additionally, as the machine would cost much less than the larger systems then available, it would also be able to serve users that needed a lower-cost solution dedicated to a specific task, where a larger 36-bit machine would not be needed.
  In 1957 when the pair and Ken's brother Stan went looking for capital, they found that the American business community was hostile to investing in computer companies. Many smaller computer companies had come and gone in the 1950s, wiped out when new technical developments rendered their platforms obsolete, and even large companies like RCA and General Electric were failing to make a profit in the market. The only serious expression of interest came from Georges Doriot and his American Research and Development Corporation (AR&D). Worried that a new computer company would find it difficult to arrange further financing, Doriot suggested the fledgling company change its business plan to focus less on computers, and even change their name from "Digital Computer Corporation".
  The pair returned with an updated business plan that outlined two phases for the company's development. They would start by selling computer modules as stand-alone devices that could be purchased separately and wired together to produce a number of different digital systems for lab use. Then, if these "digital modules" were able to build a self-sustaining business, the company would be free to use them to develop a complete computer in their Phase II. The newly christened "Digital Equipment Corporation" received $70,000 from AR&D for a 70% share of the company, and began operations in a Civil War era textile mill in Maynard, Massachusetts, where plenty of inexpensive manufacturing space was available.
caption: DEC was headquartered at a former wool mill in Maynard, Massachusetts, from 1957 until 1992
exif: {"Image Make": "NIKON CORPORATION", "Image Model": "NIKON D50", "Image Orientation": "Horizontal (normal)", "Image XResolution": "72", "Image YResolution": "72", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "QuickTime 7.6", "Image DateTime": "2009:03:29 18:15:23", "Image HostComputer": "Mac OS X 10.5.6", "Image ExifOffset": "228", "EXIF ExposureTime": "1/125", "EXIF FNumber": "28/5", "EXIF ExposureProgram": "Aperture Priority", "EXIF ISOSpeedRatings": "200", "EXIF ExifVersion": "0220", "EXIF DateTimeOriginal": "2009:03:29 13:50:31", "EXIF DateTimeDigitized": "2009:03:29 13:50:31", "EXIF ExposureBiasValue": "0", "EXIF MaxApertureValue": "2", "EXIF MeteringMode": "Pattern", "EXIF LightSource": "Unknown", "EXIF Flash": "Flash did not fire", "EXIF FocalLength": "35", "EXIF ExifImageWidth": "1998", "EXIF ExifImageLength": "3024", "EXIF SensingMethod": "One-chip color area"}