Lessons from Ken Olsen and Digital Equipment Corp. (2023)

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Since Digital Equipment Corp. founder (and MIT alumnus)Ken Olsen diedearlier this monthat 84, much has been written about him and the computer company he cofounded.

The story of Digital Equipment Corp. (DEC)was one of adramatic rise and fall: DEC was an entrepreneurialcomputer company that grew to$14 billion in sales and employedan estimated 130,000people worldwide at one point.ButDigitalfailed toadapt successfully after the personal computer eroded its minicomputer market.

Lessons from Ken Olsen and Digital Equipment Corp. (1)

Ken Olsen

Eventually, Compaq Computer bought DEC in 1998, and then Hewlett-Packard later acquired Compaq.

Whathave welearned fromDigital Equipment Corp.’s experience? Here are threemanagementlessons from DEC’s rise and fall:

1. Watch out for disruptive innovations. DEC’s troubleshelped inspire Harvard Business School professor Clayton Christensento develop his now well-known ideas about disruptive innovation.According toanarticle in Strategy+Business, watching the problemsof Digital and other minicomputer companies inthe late 1980sgot Christensen thinking about disruptive technology.

Today, Christensen’s ideas are well-known –and managers in established companies as a result have a much better awareness of the potential for disruptive innovation to affect their businesses. Here’s how Christensenput itin a 2009 interviewin MIT Sloan Management Review:

“Every disruption has three components to it: a technological enabler, a business model innovation and a new commercial ecosystem. In computing, the technological enabler of disruption in computing was the microprocessor. It so simplified the design of a computer that Steve Wozniak and Steve Jobs could just slap one together in a garage. It transformed the industry’s fundamental technological problem—the design of a computer—from a problem that took hundreds of people several years to solve into one that was much simpler.

Then that simplifying technology had to be married with a business model that could take the technology into the market in a cost-effective and convenient way. Digital Equipment Corp. had microprocessor technology, but its business model could not profitably sell a computer for less than $50,000. The technology trapped in a high-cost business model had no impact on the world, and in fact, the world ultimately killed Digital. But IBM Corp., with the very same processors at its disposal, set up a different business model in Florida that could make money at a $2,000 price point and 20% gross margins—and changed the world.

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Comments (6)
On Software Project Management, Part 2 | Frances Advincula
[...] 4. Dec is Dead, Long Live DEC: The Lasting Legacy of the Digital Equipment Corporation For now, a review and insights [...]
On Software Project Management, Part 2 « Frances Marie
[...] 4. Dec is Dead, Long Live DEC: The Lasting Legacy of the Digital Equipment Corporation For now, a review and insights [...]
Avoiding the Mistakes of Fallen Executives » Denise Brouillette
[...] What could be going on with the leaders at RIM? Before I answer that, I’ll revisit what happened to CEO Ken Olsen and the once dominant Digital Equipment Corporation (DEC) of Maynard, MA. [...]
Tim Cook and Apple’s Tricky Next Steps | EOS Worldwide
[...] shows it isn’t easy. Wang [4]did not survive the departure of An Wang; Digital Equipment never flew high again after Ken Olsen.[5] Untold numbers of firms that hadn’t attained such heights when they lost their founders [...]
HP and the Challenge of Change | Mike's Place in Cyberspace
[...] file format. Digital Equipment Corporation, at one time the second largest computer manufacturer, failed to adapt to the changing market and was purchased by Compaq in the [...]
Dewita Soeharjono
Great reading. I bet not too many Fortune 500 cos. employees remember their bosses. Let alone their CEOs, unless CEO's name is the name of the product, like Dell, etc. It's so true that disruptive innovations will change who'll be the next market leader - if the current leaders don't pay attention to trends. Consumer trends. Social commerce trends. Population growth. Etc. It will be interesting to watch how these things going to unravel throughout 2011 and on..


What was the downfall of Digital Equipment Corporation? ›

Digital Equipment Corp. had microprocessor technology, but its business model could not profitably sell a computer for less than $50,000. The technology trapped in a high-cost business model had no impact on the world, and in fact, the world ultimately killed Digital.

Why did DEC go out of business? ›

1998. The official end of DEC as a standalone company came in 1998 when it was acquired by Compaq for $9.6 billion. Unfortunately, Compaq didn't know what to do with DEC's overseas business, and so it was inevitable that neither DEC nor Compaq would exist for much longer.

Why did the world's second largest computer company fail? ›

The company was too invested in the eroding minicomputer market. It is widely believed that Digital Equipment Corporation, along with Ken Olsen himself, did not recognize the importance of microcomputing until it was far too late. There were other missteps as well.

What did Ken Olsen invent? ›

NIHF Inductee Kenneth Olsen Invented Magnetic Core Memory.

Why is digital divide a problem? ›

Lack of Access to Real-Time Information and Communication

A major challenge of the digital divide for workers is that limited access to high-speed broadband, hardware, and/or effective tools results in limited access to real-time information.

How many employees did Digital Equipment Corporation have? ›

How many employees does Digital Equipment Corporation have? Digital Equipment Corporation has more than 10,000 employees. Where are Digital Equipment Corporation headquarters? The headquarters for Digital Equipment Corporation are in Maynard.

Who bought out Digital Equipment Corporation? ›

Founded in 1957, the company employed more than 120,000 people worldwide at its peak in 1990 and earned more than $14 billion in revenue. It was bought by Compaq Computer Corporation in 1998.

Why did DEC have to present alone? ›

The decision to host alone was made after Ant McPartlin was charged with drink driving following a collision in south-west London. Ant still had some screen time in a pre-recorded comedy sketch. Show regulars Scarlett Moffatt and Stephen Mulhern also took on greater presenting roles.

Which company super computer has become the fastest in the world? ›

Fugaku (Japan)

Japan's Fugaku, which was jointly developed by RIKEN and Fujitsu, is now the world's fastest supercomputer.

What are the two companies that manufacture most of the PC today? ›

HP : HP (Hewlett-Packard) is a leading American multinational computer system manufacturer in the world. They manufacturer printers, laptops, computers, servers, storage devices, networking, software, enterprise solutions and much more. Acer : Acer ranks among the world's top five branded PC vendors.

What happened to Ken Olsen? ›

Death. Olsen died while in hospice care in Indianapolis, Indiana on February 6, 2011, aged 84. Gordon College, where he was a trustee and board member, announced his death, but did not reveal the cause.

What is the history of Digital Equipment Corporation? ›

DEC was founded in 1957 by Ken Olson and Harlan Anderson, engineers who had worked on very early machines at the Massachusetts Institute of Technology (MIT). They began by building small circuit modules for laboratory use and, in 1961, released their first computer, the PDP-1.

What did Ken Olsen do? ›

Kenneth Harry Olsen, known around the world as founder and former CEO of Digital Equipment Corporation (DEC) and one of the 20th century's great leaders in computer science, passed away February 6, 2011.

How does the digital divide affect today's society? ›

The digital divide often means a lack of access to broadband internet access and wireless technologies such as Wi-Fi. Globally, the digital divide in developing countries includes a lack of access to digital technology and internet service.

What are some of the solutions to the digital divide? ›

The digital divide can be closed by implementing digital inclusion policies, programs and tools that incorporate the following:
  • Affordable, robust broadband internet service.
  • Internet-enabled devices that meet the needs of the user.
  • Access to digital literacy training.
  • Quality technical support.

What is the most important in digital divide? ›

The digital divide stifles education.

More and more schools require students to turn in their homework online or conduct research via the internet. This can present educational problems for underserved communities of a lower socioeconomic status, as they have a lower likelihood of access to information technology.

What are the three factors that affects the digital divide? ›

There are at least three factors at play: information accessibility, information utilization, and information receptiveness. More than just accessibility, the digital divide consists on society's lack of knowledge on how to make use of the information and communication tools once they exist within a community.

Why is it important to reduce the digital divide? ›

Overcoming the Digital Divide gives greater access to employment opportunities, job training and other benefits including proper healthcare. With the pandemic surging on and off, with no clear end in sight so far, the ability to pivot back and forth between in-person and distance learning is essential.

Where is Digital Equipment Corporation located? ›

Where is Digital Equipment Corporation 's headquarters? Digital Equipment Corporation is located in Maynard, Massachusetts, United States .

What does DEC mean computer? ›

Digital Equipment Corporation (DEC) developed the DECnet protocol suite in 1975.

Who famously said there is no reason anyone would want a computer in their home? ›

In 1977, Ken Olsen, the president and founder of Digital Equipment Corporation, famously said, “There is no reason anyone would want a computer in their home.”

Who invented dec 10 computer? ›

Digital Equipment Corporation

What is meant by digital equipment? ›

Digital Equipment means any electronic equipment including an electronic terminal (for example, a merchant terminal or ATM), computer, cash deposit machine, television, fax machine, telephone and mobile telephone.

Why do ant and dec always stand on the same side? ›

After a poll found that 70% of viewers were unable to tell the boys apart, Dec admitted standing in the same positions is a useful way to help out the public. The pair now position themselves so that Ant is on the viewer's left, and Dec on the right.

Did Dec go to Ant's wedding? ›

Ant, who married his former PA at St Michael's Church in Heckfield in Hampshire on Saturday 7th August, invited some of his closest family and showbiz friends to the ceremony, including best man Dec Donnelly, Phillip Schofield, Christine Lampard, David Walliams and Dermot O'Leary.

Why being alone is a gift? ›

Being alone is an opportunity to tune in to ourselves, to hear how we sound, the words we choose, how we talk to ourselves, what we eat (or don't), how we exercise (or don't), how we clean and maintain our homes and possessions (or don't), how we spend our time.

How many supercomputers are there in the US? ›

The United States has 165 of the top machines, with a cumulative capacity of 173 Pflop/s. That's a reversal of the rankings 15 years ago, when the United States had more than half of the world's top 500 supercomputers, Simon says.

What is the most advanced computer in the world? ›

The 8 Most Powerful Computers in The World
  1. Frontier (United States) Oak Ridge National Laboratory. ...
  2. Fugaku (Japan) ...
  3. LUMI (Finland) ...
  4. Summit (United States) ...
  5. Sierra (United States) ...
  6. Sunway TaihuLight (China) ...
  7. Perlmutter (United States) ...
  8. Selene (United States)
Aug 2, 2022

What is the number 1 supercomputer? ›

Ranking by Teraflops

1 teraflop = 1,000,000,000,000 (1 trillion) flops. Supercomputer Fugaku was completed in March 2021, and is officially the world's most powerful supercomputer.

What company makes the most reliable computers? ›

Here are the laptop brands that I consider the most reliable for 2022.
  1. Apple. Apple is one of the most, if not the most, reliable tech brands. ...
  2. HP. Hewlett-Packard is a company that's over 80-years old, one that has survived the test of time. ...
  3. Dell. ...
  4. Lenovo. ...
  5. Microsoft. ...
  6. Samsung. ...
  7. Asus.
Feb 4, 2022

Who are the three biggest computer processor manufacturers? ›

Gigabyte Technology. MSI (Micro-Star International) Intel.

What is the best company to buy a PC from? ›

The best places to buy a prebuilt gaming PC in 2023
  • Best Buy.
  • Dell.
  • HP.
  • Lenovo.
  • Newegg.
Jan 10, 2023

Who sells the most computers in the US? ›

Lenovo shipped 15.66 million personal computers during Q4 2022, surpassing HP's 13.22 million shipments in that same quarter and retaining its position as market leader. Dell occupies the third place on the list, shipping 10.88 million PCs.

Which country is the leader in computer technology? ›

The United States lead the list with the most distinguished computer scientists for 2021. The number of leading computer scientists in the United States surpassed 600 people. One of the most famous American computer scientists is Lary Page.

What is the best quality laptop brand? ›

Our Best Laptops Rating
  • #1 MacBook Pro (2021)
  • #2 MacBook Pro 13-inch (2020)
  • #3 Google Pixelbook Go.
  • #4 MacBook Air M1 (2020)
  • #5 Dell XPS 17.
  • #5 Acer Nitro 5.
  • #5 Dell XPS 13.
  • #8 Dell XPS 13 2-in-1.
Dec 29, 2022

How old is Ken Olsen? ›

What does Digital Equipment Corporation do? ›

Digital Equipment Corporation (DEC), American manufacturer that created a new line of low-cost computers, known as minicomputers, especially for use in laboratories and research institutions.

What is the oldest electronic company in the world? ›

1885 – Ferranti

The Ferranti Mark 1 is known as the world's first commercially available general-purpose electronic computer.

Who invented the mini computer? ›

Seymour Cray is best known for building supercomputers, but he also designed the CDC 160, one of the first minicomputers.

When did digital divide become a problem? ›

Introduction. The term “digital divide” emerged in the 1990s in the United States to describe observed inequalities of access, initially, to computers and later to the Internet, information, and other digital technologies.

What happened digital revolution? ›

The Digital Revolution (also known as the Third Industrial Revolution) is the shift from mechanical and analogue electronic technology to digital electronics which began in the later half of the 20th century, with the adoption and proliferation of digital computers and digital record-keeping, that continues to the ...

What does Digital Equipment inequality mean? ›

September 2021. The digital divide is the unequal access to digital technology, including smartphones, tablets, laptops, and the internet. The digital divide creates a division and inequality around access to information and resources.

Is the digital divide good or bad for society? ›

The digital divide has an overall negative impact on the economy and deepens income inequality. Without digital skills and knowledge of advanced technologies, citizens are unable to progress in their careers and contribute less to the country's economy. As a result, the economy becomes less competitive.

What are the two major reasons of digital divide? ›

Answer: The major cause of the digital divide is access. Although this is the major contributing factor, there are other factors that contribute which include the following: cost of technology, access for the disabled, lack of skills, lack of education, lack of information, and lower-performance computers.

What are the 4 stages of Digital Revolution? ›

Understanding the 4 stages of digital transformation and what you need to move forward
  • Planning.
  • Implementation.
  • Acceleration.
  • Measurement.

How did the Digital Revolution changed society? ›

The Digital Revolution Defined

During this time, digital computers and digital record keeping became the norm. The introduction of digital technology also changed the way humans communicate, now via computers, cell phones, and the internet. This revolution led way to the Information Age.

How did the Digital Revolution change our lives today? ›

The Internet has also changed the way we interact with our family, friends, and life partners. Now everyone is connected to everyone else in a simpler, more accessible, and more immediate way; we can conduct part of our personal relationships using our laptops, smart phones, and tablets.

What are five 5 reasons for the gap in digital divide? ›

Factors such as low literacy and income levels, geographical restrictions, lack of motivation to use technology, lack of physical access to technology, and digital illiteracy contribute to the digital divide.

How can we avoid the negative effects of the digital divide? ›

  1. an affordable, good-bandwidth Internet service.
  2. devices with Internet access to meet everyone's needs.
  3. educational pathways to use the Internet and other digital technologies.
  4. a quality technical support.

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