[Info-vax] Did Ken Olsen kill Alpha?

[Michael Kraemer]

Neil Rieck schrieb:


> But after the death of Olsen's mentors, Olsen turned to his VPs for
> advice. 

Couldn't he think of his own? He was a grown-up by then, I presume.

> Many of these VPs represented sales and claimed to have talked
> to customers demanding VAX 9000. But VAX 9000 flopped when it hit the
> market place. Did customers lie to DEC sales, or had DEC salespeople
> deluded themselves into believing there was customer demand? Not sure
> of the answer but DEC was never able to recover the development costs.
Or his VPs wanted to please him because he was such a big VAX fan?
The weird thing with the VAX 9000 was, that DEC found it a good idea
to come up with yet another mainframe when all the world,
including IBM, was turning away from it. Even the VMS bigots I knew
back then shook their heads when sales reps showed up to praise
the virtues of the 9000.
They wanted powerful workstations for their desktops,
not another big iron behind steel doors.
So the VAX 9000 and the Alpha weren't alternatives,
they pointed in entirely different directions.

> There is another book out there called "In Search of Stupidity" which
> talks about all the problems made by companies who went broke
> competing with themselves. IMHO, once DEC made the decision to migrate
> from 32-bit CISC to 64-bit RISC, they should have stopped developing
> VAX. This would have left DEC with more cash available to weather the
> future.

It's also weird that by the time they decided to make a brand new own
64-bit RISC chip (and burn a lot of money with it)
they already used one successfully in their systems.
The DECstation 3100 (powered by a Mips Rx000) appeared in 1989,
was cheap to develop but nevertheless was the fastest workstation
of its time (of course only as long as the next "fastest workstation
of its time" came along).
The whole DECstation line was rather successful
in the technical computing segment,
but DEC treated it like a stop gap measure and it withered
away as soon as the Alpha hype set in.
It would have been much cheaper to buy half of Mips
and continue with the Rx000 chips, which
went 64-bit even before the Alpha.

> Speculation: IBM had huge financial problems between the late 1980s
> and early 1990s. 

I don't know where this notion (of bankrupcy) comes from.
Maybe people should read less memoires and more business reports.
All through the 1980s IBM was profitable.
For most of the 1990s these reports are still online,

www.ibm.com/annualreport/

There I find total revenues of $65B, $63B, and $64B
for the years 1992, 1993 and 1994, respectively.
Earnings in those years were -$9B, -$9B, and $5B.
So they suffered big losses in just two years, mainly
due to "restructuring charges" of $12B (!) and $9B,
probably due to layoffs to reduce the bloated workforce.
Apart from these exceptional expenses, the balance looks
quite healthy, and two bad years certainly wouldn't have
killed a gorilla like IBM. How long did DEC and Sun
suffer from red ink until they had to throw the towel?

Nevertheless it would be historically interesting
to find out about the remaining years 1990 and 1991
and to spot similar reports from DEC.

> I'll bet there were some people at DEC who believed
> that DEC would survive the 1990s while IBM might fail. 

That's the notorious DEC hubris which finally killed them.
Istr the prediction was that they would have surpassed IBM
by 2007 :-)

> These people
> could have made life better for both companies by having DEC
> manufacture their chip in an IBM fab, 

I think these capable IBM fabs did not exist back then,
or weren't open for competitors.
IBM microelectronics just started, and had quite some
difficulties to become profitable,
istr it took five years for the RS/6000 line.
This shows how difficult it is even for a gorilla
like IBM to maintain an own chip architecture.

> but this would be like throwing
> IBM a life line.

IBM didn't need a life line,
it is a funny idea anyway that a $10+xB company
would throw a lifeline to save a $65B company.