Compaq


Compaq Computer Corporation was an American information technology company founded in 1982 that developed, sold, and supported computers and related products and services. Compaq produced some of the first IBM PC compatible computers, being the second company after Columbia Data Products to legally reverse engineer the BIOS of the IBM Personal Computer. It rose to become the largest supplier of PC systems during the 1990s. The company was initially based in Harris County, Texas.
The company was formed by Rod Canion, Jim Harris, and Bill Murto, all of whom were former Texas Instruments senior managers. All three had left Compaq in 1991 due to an internal shakeup, and saw Eckhard Pfeiffer appointed as president and CEO, who served throughout the 1990s. Ben Rosen provided the venture capital financing for the fledgling company and served as chairman of the board for 17 years from 1983 until September 28, 2000, when he retired and was succeeded by Michael Capellas, who served as its last chairman and CEO until its merger.
Compaq was overtaken by Dell as the top global PC maker two times; one in 1999 and the other in 2001. Struggling to keep up against its competitors with the price wars against Dell, the launch of a joint venture with ADI Corporation in 1994, and a risky acquisition of DEC in 1998, Compaq was acquired by Hewlett-Packard for US$25 billion in 2002. Despite using the Compaq name in HP's own HP Compaq brand of business computers, which served as a replacement for the Compaq Evo in 2003 as well as the HP ProBook brand in 2009, the Compaq brand as a whole remained in use by HP for lower-end systems until 2013 when it was discontinued; two years after the Compaq brand was discontinued, HP itself was later split up into two companies in 2015, leading to its legal successors HP Inc. and Hewlett Packard Enterprise.
, the Compaq brand is currently licensed to third parties outside of North America for use on electronics in Latin America and India.

History

1982–1990

Compaq was founded on February 16, 1982 by Rod Canion, Jim Harris, and Bill Murto, three senior managers from semiconductor manufacturer Texas Instruments. The three of them had left due to lack of faith and loss of confidence in TI's management and initially considered but ultimately decided against starting a chain of Mexican restaurants. Each invested $1,000 to form the company, which was founded with the temporary name "Gateway Technology". The name "COMPAQ" was said to be derived from "Compatibility and Quality", but this explanation was an afterthought. The name was chosen from many suggested by Ogilvy & Mather, it being the name least rejected. The first Compaq PC was sketched out on a placemat by Ted Papajohn while dining with the founders in a pie shop,. Their first venture capital came from Benjamin M. Rosen and Sevin Rosen Funds, who helped the fledgling company secure to produce their initial computer. Overall, the founders managed to raise $25 million from venture capitalists, as this gave stability to the new company as well as providing assurances to the dealers or middlemen.
Compaq differentiated its offerings from other IBM PC clones by not focusing mainly on price, but instead concentrating on new features such as portability and better technology, at prices comparable to those of IBM's PCs. Of nine PC AT clones InfoWorld priced in September 1985, Compaq's was the only one more expensive than the IBM original. In contrast to Dell and Gateway 2000, Compaq hired veteran engineers with an average of 15 years' experience, which lent credibility to Compaq's reputation of reliability among customers. Due to its partnership with Intel, Compaq was able to maintain a technological lead in the market place as it was the first one to come out with computers containing the next generation of each Intel x86 processors.
Under Canion's direction, Compaq sold computers only through dealers to avoid potential competition that a direct sales channel would foster, which helped foster loyalty among resellers. By giving dealers considerable leeway in pricing Compaq's offerings, either a significant markup for more profits or discount for more sales, dealers had a major incentive to advertise Compaq.
During its first year of sales, the company sold 53,000 PCs for sales of, the first start-up to hit the mark that fast. Compaq went public in 1983 on the NYSE and raised. In 1986, it enjoyed record sales of from 150,000 PCs and became the youngest-ever firm to make the Fortune 500. In 1985, sales reached $504 million. The company shipped its 500,000th computer in April 1986. In 1987, Compaq hit the revenue mark, taking the least amount of time to reach that milestone. By 1991, Compaq held the fifth place spot in the PC market with in sales that year.
Two key marketing executives in Compaq's early years, Jim D'Arezzo and Sparky Sparks, had come from IBM's PC Group. Other key executives responsible for the company's meteoric growth in the late 1980s and early 1990s were Ross A. Cooley, another former IBM associate, who served for many years as SVP of GM North America; Michael Swavely, who was the company's chief marketing officer in the early years, and eventually ran the North America organization, later passing along that responsibility to Cooley when Swavely retired. In the United States, Brendan A. "Mac" McLoughlin led the company's field sales organization after starting up the Western U.S. Area of Operations. These executives, along with other key contributors, including Kevin Ellington, Douglas Johns, Steven Flannigan, and Gary Stimac, helped the company compete against the IBM Corporation in all personal computer sales categories, after many predicted that none could compete with the behemoth.
The soft-spoken Canion was popular with employees and the culture that he built helped Compaq to attract the best talent. Instead of headquartering the company in a downtown Houston skyscraper, Canion chose a West Coast-style campus surrounded by forests, where every employee had similar offices and no-one had a reserved parking spot. At semi-annual meetings, turnout was high as any employee could ask questions to senior managers.
In 1987, company co-founder Bill Murto resigned to study at a religious education program at the University of St. Thomas. Murto had helped to organise the company's marketing and authorized-dealer distribution strategy and held the post of senior vice president of sales since June 1985. Murto was succeeded by Ross A. Cooley, director of corporate sales. Cooley would report to Michael S. Swavely, vice president for marketing, who was given increased responsibility and the title of vice president for sales and marketing.

Introduction of Compaq Portable

In November 1982, Compaq announced its first product, the Compaq Portable, a portable IBM PC compatible personal computer. It was released in March 1983 at. The Compaq Portable was one of the progenitors of today's laptop; some called it a "suitcase computer" for its size and the look of its case. It was the second IBM-compatible PC, capable of running all software that would run on an IBM PC. It was a commercial success, selling 53,000 units in its first year and generating in sales revenue. The Compaq Portable was the first in the range of the Compaq Portable series. Compaq was able to market a legal IBM clone because IBM mostly used "off the shelf" parts for its PC. Furthermore, Microsoft had kept the right to license MS-DOS, the most popular and de facto standard operating system for the IBM PC, to other computer manufacturers. The only part which had to be duplicated was the BIOS, which Compaq did legally by using clean room design at a cost of. Compaq also developed COMPAQ-DOS, its own MS-DOS variant. Microsoft later licensed COMPAQ-DOS and resold it as MS-DOS.
Unlike other companies, Compaq did not bundle application software with its computers. Vice President of Sales and Service H. L. Sparks said in early 1984:
Compaq instead emphasized PC compatibility, of which Future Computing in May 1983 ranked Compaq as among the "Best" examples. "Many industry observers think is poised for meteoric growth", The New York Times reported in March of that year. By October, when the company announced the Compaq Plus with a hard drive, PC Magazine wrote of "the reputation for compatibility it built with its highly regarded floppy disk portable". The company bragged that it was more IBM compatible than IBM itself, such as the IBM Portable PC. Compaq computers remained the most compatible PC clones into 1984, and maintained its reputation for compatibility for years, even as clone BIOSes became available from Phoenix Technologies and other companies that also reverse engineered IBM's design, then sold their version to clone manufacturers.

Compaq Deskpro

On June 28, 1984, Compaq released the Deskpro, a 16-bit desktop computer using an Intel 8086 microprocessor running at. It was considerably faster than an IBM PC and was, like the original Compaq Portable, also capable of running IBM software. It was Compaq's first non-portable computer and began the Deskpro line of computers.

Compaq DeskPro 386

In 1986, Compaq introduced the Deskpro 386, the first PC based on Intel's new 80386 microprocessor. Bill Gates of Microsoft later said
The Compaq 386 computer marked the first CPU change to the PC platform that was not initiated by IBM. Compaq had concluded, according to PC, that it could do so because "IBM's DOS standard is now bigger than IBM"; IBM could not make changes to the PC architecture it had created to hurt Compaq, without also obsoleting millions of real IBM PCs. An IBM-made 386 machine reached the market almost a year later, but by that time Compaq was the leading 386 supplier with 28% market share, compared to IBM's 16%.
For the first three months after announcement, the Deskpro 386 shipped with Windows/386. This was a version of Windows 2.1 adapted for the 80386 processor. Support for the virtual 8086 mode was added by Compaq engineers.