Digital Equipment Corp - Early History

Two engineers from the Massachusetts Institute of Technology (MIT), Kenneth Olsen and Harlan Anderson, joined forces in 1957 to establish Digital Equipment Corp. in Maynard, Massachusetts. The new computer technology firm launched a computer systems module the following year. In 1960, Olsen and Anderson developed the PDP-1 computer, the smallest and most interactive computer on the market at that time. They founded DECUS, the Digital Equipment Computer Users Society, in 1961. It became the world's largest computer society for a single manufacturer's products.

International expansion began in 1963, when offices were established in Munich, Germany, and Ottawa, Ontario. Digital then launched the PDP-5, the world's first minicomputer; and the PDP-1 operating system, which was the first system to make use of timesharing technology. In 1964, units opened in both Australia and the United Kingdom. The PDP-6, a 36-bit computer, shipped that year, and the world's first mass-produced minicomputer, the PDP-8, shipped in 1965. Olsen and Anderson took Digital public in 1966.

The late 1960s brought increased international growth. A manufacturing plant was established in Puerto Rico; a Japanese headquarters office opened in Tokyo; and a European headquarters office opened in Switzerland. In 1970, a new plant in Massachusetts began manufacturing peripheral and metal products. Product launches during the first half of the decade included the PDP-11/20, a 16-bit computer; MPS, the firm's first microprocessor; and the LSI-11, the firm's first 16-bit microcomputer. By 1975, Digital had sold more than 50,000 computer systems. The firm unveiled the DECSYSTEM-20, a 36-bit timesharing system, in 1976. The following year, Digital developed its first VAX computer, the VAX-11/780. Sales exceeded $1 billion for the first time in 1977, and employees totaled 36,000.

Digital made its first foray into retail sales in 1978 by establishing a store in New Hampshire. Computer systems sold reached the 100,000 mark. Two years later the firm launched its second VAX system, the VAX-11/750, which was the world's first Large Scale Integration (LSI) 32-bit minicomputer. Intel Corp. and Xerox Corp. began working with Digital on developing a local network, known as Ethernet. Sales exceeded $3 billion. The firm diversified into personal computers by launching DECmate II, Rainbow 100, Professional 325, and Professional 350 in 1982. International growth continued via a joint venture agreement between Brazil's Elebra Computadores and Digital. In 1984, Digital bought Trilogy Technology Corp. Late in the decade, the firm began forging strategic alliances with other industry leaders. As a result, Cray Research Inc., the world's top supercomputer maker, agreed to develop products compatible with Digital products, as did Apple Computer Inc. More than 50 percent of total annual sales came from international operations.

The firm expanded into Eastern Europe in 1990, with the establishment of Digital (Hungary) Ltd., in Budapest. That year, more than 20 new computers, peripherals, and software applications were introduced. Digital added to its holdings the financial services arm of London-based Data Logic Ltd., a leading manufacturer of UNIX-based software for brokerage houses. In 1991, Asea Brown Boveri Inc. (ABB) and Digital forged a joint venture known as EA Information Systems Inc. The venture focused on furthering the three-dimensional plant design work started in ABB's engineering automation software division. Microsoft Corp. agreed to use Digital's new PATH-WORKS software to allow Microsoft Windows users to retrieve and trade data on local area networks. Similarly, Intel Corp. and Digital agreed to work together on several software projects in 1992. Acquisitions included the information systems unit of Philips Electronics, BASYS Automation Systems, and leading PC software and accessories distributor 800-SOFTWARE. That year, Digital launched its RISC-based Alpha chip, the fastest such chip in the industry. Both Microsoft and Olivetti agreed to work with Digital to develop a platform to best utilize the new microprocessor.