Didn't Microsoft fool Compaq into buying DEC?

greenspun.com : LUSENET : Bill Parish : One Thread

It seems to me that just a few years ago, a very "odd couple" buyout was orchestrated to eliminate Digital Equipment Corp. (DEC). Compaq claimed they wanted to "buy DEC to go after IBM." The DEC people escaped like rats off a sinking ship, as they knew Compaq's slash-and-burn PC sales culture was an impossible match for DEC's "your data is our life" culture. DEC is now RIP, as Compaq has discontinued DEC products.

Isn't it true that Microsoft orchestrated this deal in order to eliminate the source of Microsoft's intellectual property found in Windows NT/2000, namely, DEC? Isn't it true that DEC's VMS operating system was cannibalized by David Cutler when he was lured by Microsoft into leaving DEC and heading the WindowsNT project 10 years ago? Didn't DEC threaten to sue Microsoft, after which MS made certain "concessions" to avoid the negative publicity? Isn't it true that Microsoft's entire enterprise-software empire is built on intellectual property illegally acquired via the David Cutler episode? Isn't it true that the demise of DEC removed a serious obstacle to Microsoft's software hegemony?

-- Tom Nadeau (pcassembler@mindspring.com), April 23, 2001


Yes. Good observation Tom. Compaq realized that Microsoft's pyramid was extracting all the profit from pc activities and they then thought that services using DEC would help growth. Compaq was essentially commoditized by microsoft and a lot of good innovation lost in the process.

-- Bill Parish (bill@billparish.com), April 23, 2001.


Microsoft is guilty of many things, but it didn't lure Cutler and Co. DEC was closing some of its Seattle Operations, of which Cutler was a part. Microsoft was very shrewd(showing Dave some love) and pounced on the opportunity to acquire a much respected talent. Eventually MSFT paid DEC $65m and agreed to a so-called special enterprise support alliance with DEC. Of course after the initial release of NT (orginally OS/2 NT Version 3) there was no enterprise demand, and pc memory was still very expensive.

Microsoft is a very tough and perhaps goes over the line, but that diminishes the fact that its competition has almost always been 3rd and 4th rate.

-- Charlie Black (charlie.black@mindspring.com), April 30, 2001.

Tom, it would not be true to say that the whole of the Digital product line is dead, as the very speedy Alpha cpu is significant as a Compaq offering. Indeed a lot of Compaq's advertising emphasis has shifted in the last 3 months from Wintel to UNIX - either on Alpha, or 32-bit Intel, or very soon on 64-bit Intel hardware.

So, it appears that Compaq were indeed, trying to edge in on some of IBM's market. They seem to be failing by not putting enough into R&D, because IBM are lining up some mean UNIX boxes which will give Sun something to think about. Compaq aren't really in the same league, as perceived by buyers. Who's new UNIX would you rather bet on?

Yes, it was silly for Compaq to get involved with Digital. They took their eye off their core business, and by losing their concentration, lost their main market to Dell. But I don't believe that Microsoft had much to do with it? Luckily the world still needs UNIX. There might be enough sales to stay afloat but times will be hard.


-- Peter Erskine (petererskine@angelfire.com), May 08, 2001.

I'm using a spam-proofed email address because the site's pages expose our addresses. This is not good because it exposes users to spam. Parish, you are probably loosing lots of good commentaries because people refrain from posting because of this.

Now to the point, Nadeau: first, in fact DEC people had begun scaping years before as it became clear that DEC management was doing Microsoft's game in pushing NT instead of DEC's own Unix and VMS. And some good guys have left even before when they saw that DEC had already gone corporate suicide mode by refusing to push standard Unix over proprietary VMS and killing the Novell Netware- and Apple Mac OS-on-Alpha initiatives by demanding Novell and Apple substituted VMS' kernel for the Netware and Mac OS ones.

Second, Compaq has not discontinued DEC products. In fact it just has changed the systems' names, but they are all on the market now: Alpha servers, VMS software, and the list goes on. Even the current Compaq PCs now have much of the DEC ones, as the standard BIOS and boot up procedure instead of the Compaq's proprietary ones, the small size configurations and the nice notebook computers.

Third, Microsoft had already got everything it needed from DEC. It was just a matter of a company that failed to return to a safe level of profits being absorved by a stronger one.

Fourth, Dave Cutler did it because he couldn't complete his next-generation OS project at DEC. This is because the company had got problems enough to continue funding a never-ending project, and anyway the project had no market viability since it would be just another proprietary product. DEC didn't need a proprietary successor to VMS, because both VMS was already good enough and because just an open system could succeed against Unix and other POSIX environments - not to mention IBM and Microsoft's OS/2, which later became OS/2 NT and reached the market as Windows NT.

But as for intellectual property illegally acquired, it is not clear that Dave Cutler actually stole any code from Digital. In fact NT is mostly a mixture of Mach and OS/2, with just some concept resemblance to some aspects of VMS or of the then-current David Cutler's.

Finally, DEC wasn't anymore a serious obstacle to Microsoft's software hegemony simply because it never had a feasible competitor to NT or Windows itself. Even if VMS or, later, Unix could have been that, they were badly mismanaged not only by DEC itself but by most software vendors that wanted to keep the market fragmented and proprietary, starting by AT&T herself. As for the Unix-on-Alpha combination, which could still strengthen the Unix market considerably, it had already been badly mismarketed by DEC itself before being relegated to a less-proactive division of Compaq.

-- Leandro Guimar„es Faria Corsetti Dutra (leandro.no@spam.amdocs.com), June 01, 2001.

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