The Tragic Tale Of DEC, The Computing Giant That Died Too Soon

guest · Dec 8, 2020

The Tragic Tale Of DEC, The Computing Giant That Died Too Soon
October 21, 2020
https://digital.com/about/dec/

When you think of leaders in the computing industry, your first thoughts probably turn to companies like Apple, Microsoft, and IBM. But flash back a few decades, and the leaders of those companies all would’ve gladly bowed down to Digital Equipment Corporation, or DEC, who began paving the way for everyone starting in 1957.

DEC identified a demand for more affordable and high-performing computing systems that could be used in scientific research and other technological settings. DEC introduced a mid-range computing solution, the minicomputer, at a time when the alternative was too bulky and costly for most people.
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So, what happened to DEC?
Most argue that it was a failure of the company’s leadership to adapt to the changing direction that computing began to take in the late 1980s.

In order to understand how DEC eventually lost it all, it’s important to take a look back at how it all began and why such a monumental shift in the computing industry could’ve been missed by such a critical leader in the space.
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According to Clayton Christensen, a professor at Harvard Business School, it wasn’t a lack of trying that took down DEC. It was the inflexibility of the business model they had so long relied upon:

“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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