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Full text of "A History of the Personal Computer"

Chapter 16 Corporate Activities in the 1990's 

Apple Computer 

The company entered the 1990' s under John 
Sculley' s direction with increasing sales and profits. 
However, in the following years the company would 
encounter problems resolving its product strategy. Apple 
could either limit the use of its proprietary technology 
and maintain a high profit margin, or license the 
technology and achieve a greater market share for it. 
This problem was not helped by an executive group with 
individual aspirations that lacked corporate 
cohesiveness . Gilbert Amelio has described the Apple 
organization as a "dysfunctional culture." This affected 
the future performance and even the viability of the 
company. 

Litigation by Xerox regarding the similarity of 
Macintosh graphics systems to the systems developed at 
PARC (Palo Alto Research Center) was thrown out in early 
1990. In March 1991, the Windows /Macintosh graphics 
litigation with Microsoft was found to be in favor of 
Apple Computer, only to have most of it thrown out in 
April 1992. 

In early 1991, Apple began negotiations with IBM 
regarding the possible use of IBM RISC microprocessor 
technology for a more powerful Macintosh computer. This 
resulted in an early announcement to form the PowerPC 
Alliance with IBM and Motorola in July 1991, followed by 
the final agreement in October (See Section 19.6) . 

A significant decline of profits in 1993, resulted 
in John Sculley being replaced by Michael H. Spindler as 
the chief executive officer in June. Sculley became 
chairman of the board. Then in October, Sculley resigned 
from Apple Computer and joined Spectrum Information 
Technologies as chairman and chief executive officer. 

Gilbert F. Amelio, who was the CEO of National 
Semiconductor Corporation, became a member of the Apple 
Computer board in November 1994. 

Due to a continuation of declining profits and 
loss of market share, Gilbert Amelio replaced Spindler 



16/1 



16/2 Part IV 1990's - Current Technology 

as the chief executive officer in February 1996. The 
company lost $816 million in 1996. 

Apple acquired NeXT Software Inc., for $427 
million in February 1997. The company was purchased to 
obtain the NeXT operating system. Steven Jobs who had 
founded NeXT, became a consultant to the chairman of the 
Apple board. 

In the spring of 1997, Apple Computer announced a 
corporate restructuring and laid off 2,700 employees. 
Then in May, Apple formed an independent subsidiary to 
produce and market the money losing Newton hand-held 
computer . 

Although Amelio had implemented many improvements 
at Apple, the board wanted a new chief executive officer 
who would increase sales. This resulted in the 
resignation of Amelio in July. The company lost $1,045 
million in 1997. Steven Jobs announced in August, that 
Microsoft was investing $150 million in the company. 
Apple agreed to drop its legal dispute about Microsoft 
Windows versus the Apple Macintosh graphic interfaces. 
Apple also agreed to promote the use of Microsoft 
Internet Explorer software on the Macintosh and 
Microsoft agreed to update and release its popular 
Office suite of applications for the Macintosh. 
Significant changes were made to the Apple board of 
directors with resignations that included vice-chairman 
Mike Markkula and the appointments of Lawrence Ellison 
from Oracle Corporation and William Campbell from 
Intuit . 

The company introduced the iMac computer and 
discontinued its Newton MessagePad and eMate product 
lines in 1998. Sales of the discontinued products had 
been significantly below expectations. The company also 
stated that they wanted to focus their efforts on those 
products critical to the future success of the company. 
Apple reported in 1998, that its share of the personal 
computer market had declined to 4.6% in the USA and to 
3 . 6% worldwide . 

The iBook portable computer was introduced in July 
1999. At the end of Apple Computer's 1999 fiscal year in 
September, net sales were $6,134 million and the company 



Corporate Activities in the 1990's 16/3 

had 6,960 regular employees. Steven Jobs was interim 
chief executive officer and a director of the board. 

Apple Computer is a unique company that has 
created an inspired and devoted following. Its easy-to- 
use technology, starting with the Apple II and then the 
Macintosh computer are acclaimed. The company has become 
an icon, an American success story. Conceived by 
entrepreneurs in a garage who became multimillionaires. 
Unfortunately it has lost significant market share in a 
largely IBM compatible market. A lack of consistent 
leadership has been a handicap. Management have allowed 
what was the dominant supplier of personal computers, to 
become a relatively minor participant in the current 
market. If Apple had made the Macintosh operating system 
more open, it may have gained a significantly greater 
share of the market. Its pioneering proprietary 
technology has lost its initial advantage. The future 
for the company is somewhat uncertain. 

Compaq Computer 

In a management reorganization in January 1991, 
Eckhard Pfeiffer who had previously led Compaq 
operations in Germany, was appointed chief operating 
officer. Then in October, the company announced a major 
restructuring of its operations and a reorganization 
into distinct product divisions. Pfeiffer was elected 
president and chief executive officer, replacing co- 
founder Rod Canion. The company had experienced 
unsatisfactory financial results that also resulted in a 
reduction of the number of employees by approximately 14 
percent . 

Compaq became the world' s largest producer of 
personal computers in 1994 and the world' s fifth largest 
computer company in 1995. 

In June 1997, Compaq acquired Tandem Computer Inc. 
for the equivalent of about $4.1 billion in stock. 
Tandem is a manufacturer of fail-safe minicomputers and 
servers for processing online transactions. Also in 
1997, Compaq started to make a transition from "build- 
to-inventory" to a "build-to-order" manufacturing 
environment . 



16/4 Part IV 1990's - Current Technology 

Compaq announced an agreement to purchase the 
Digital Equipment Corporation (DEC) for $9.1 billion in 
January 1998 . Compaq Computer stated that the merger 
would create the "second largest computing company" in 
the world. The merger was completed in June. 

During 1998, Compaq expanded its direct-sell 
process based on customer build-to-order choice. 

In April 1999, Eckhard Pfeiffer left the company. 
It was reported that Benjamin Rosen and the company's 
board were not satisfied with the profitability of 
company. Michael D. Capellas was appointed the new 
president and chief executive officer in July. 

At the end of Compaq's 1999 fiscal year in 
December, sales were $38.5 billion. Benjamin M. Rosen 
was chairman of the board and Michael Capellas president 
and chief executive officer. 

Dell Computer 

Dell Computer Corporation has become a dominant 
direct sale provider of build-to-order personal 
computers. However, Dell had financial difficulties in 
1993 due to problems with a new laptop computer and an 
overaggressive company expansion. Michael Dell 
reorganized his company and brought in new experienced 
executives from other companies such as Morton L. Topfer 
who left Motorola and joined Dell in June 1994. 

In 1999, the company stated that it was the "the 
second-largest manufacturer and marketer of personal 
computers in the United States and were No. 2 
worldwide." At the end of Dell's fiscal year in 
February 1999, sales were $18.2 billion and the company 
had more than 24,400 employees. Kevin B. Rollins and 
Topfer are vice chairmen and Michael Dell is chairman 
and chief executive officer. 

IBM 

IBM sold its Lexington, Kentucky keyboard, printer 
and typewriter division as an independent company that 
became Lexmark International Group, Inc. in March 1991. 
Clayton, Dubilier & Rice, an investment firm arranged 
the financing. Marvin L. Mann, a former IBM manager 
became the chairman, president and chief executive 



Corporate Activities in the 1990's 16/5 

officer. IBM retained a ten percent share of the new 
company. 

The Lexington division sale helped to minimize a 
loss of $2.8 billion for IBM in 1991. This was the 
beginning of profitability problems for the company 
under the direction of John Akers and Jack Kuehler. In 
late 1991 IBM announced a major reorganization of the 
company from a single centralized company into a group 
of more independent business units . 

In October 1991, IBM participated in the formation 
of the PowerPC Alliance with Apple Computer and Motorola 
to develop a new RISC microprocessor for personal 
computers, software for an advance operating system and 
development of multimedia applications (See Section 
19.6) . 

An intense price war in personal computers, by 
firms such as Dell Computer, Compag Computer and the 
various clone manufacturers, forced IBM to implement an 
extensive cost reduction program in 1992 . This resulted 
in James Cannavino obtaining special reductions for 
corporate overhead from the Corporate Management 
Committee (CMC) . Cannavino then appointed Robert J. 
Corrigan to head the hardware part of the personal 
computer operations. 

In June, IBM formed a separate company known as 
the Individual Computer Products International (ICPI) . 
This company was formed to market a series of low cost 
personal computers in Britain, Canada and France using 
the Ambra brand name. Then in September, James Cannavino 
announced the creation of the IBM Personal Computer 
Company (IBM PC Company) with worldwide responsibility 
for all aspects of the personal computer business. 
Robert Corrigan was appointed president of the new 
company. A new series of low cost computers developed in 
the late summer was introduced in October using the 
ValuePoint brand name. 

In 1992, IBM had a second year of financial 
losses, $5 billion, a new corporate record. 
Reorganizations and staff reductions had not returned 
the company to profitability. IBM also sold Rolm Systems 
in May, a telecommunications subsidiary it had purchased 
for $1.3 billion in 1984. 



16/6 Part IV 1990's - Current Technology 

In January 1993, the IBM board announced the 
resignation of John Akers as chairman and Jack Kuehler 
as president. Kuehler' s resignation was effective in 
February and Akers in March. The announcement also 
stated that the company' s dividend to shareholders would 
be reduced for the first time, by 55 percent. In April, 
Louis V. Gerstner replaced John Akers as chairman of the 
board and chief executive officer. The position of 
president was left vacant. Gerstner was from RJR Nabisco 
and the first CEO who had not progressed to the top 
through the company. Gerstner started implementing many 
changes and large write-offs to "right-size" the company 
that resulted in a net loss of $8 billion in 1993. 
During 1993, James Cannavino became a senior vice 
president for strategy and development, and Robert 
Corrigan became president of the IBM Personal Computer 
Company. 

Personal computer revenue had been growing, but at 
a slower rate than some of the other competitors. This 
resulted in G. Richard Thoman, a senior vice-president 
and group executive being appointed head of the Personal 
Computer Group in January 198 4. Changes implemented by 
Gerstner, resulted in a financial turnaround for IBM in 
1994, a profit of $3 billion. However, the number of 
employees had gone from a peak of 407,000 in 1986 down 
to 219,800 in 1994. IBM was a significantly different 
organization . 

IBM acguired Lotus Development Corporation for 
$3.2 billion ($2.9 billion in cash) in July 1995. Jim 
Manzi the former chief executive officer of Lotus became 
a vice-president of IBM. Then in October 1995 Manzi 
resigned. During 1995, G. R. Thoman became the chief 
financial officer of IBM, Robert M. Stephenson senior 
vice president and group executive of the Personal 
Systems Group and William E. McCracken general manager, 
sales and service of the IBM PC Company. 

Taligent Inc., was dissolved in December 1995 and 
became an IBM subsidiary. 

At the end of IBM's 1999 fiscal year in December, 
revenue for the year was $87.5 billion and the number of 
employees was 307,401. Louis V. Gerstner was chairman of 
the board and chief executive officer. 



Corporate Activities in the 1990's 16/7 



Intel 

Robert Noyce, co-developer of the integrated 
circuit and co-founder of Fairchild Semiconductor and 
Intel, died at the relatively young age of 62, in June 
1990. 

Advanced Micro Devices (AMD) litigation to obtain 
a license as a second source for the Intel 80386 
microprocessor and allegations of antitrust violations 
continued in the courts during the early 1990' s. In 
February 1992, the court arbitrator awarded license 
rights for the 80386 to AMD. However, Intel appealed the 
court ruling to the State Supreme Court, but lost the 
appeal in 1994. A compromise settlement on all pending 
litigation between AMD an Intel was reached in January 
1995. 

Intel began an end-user marketing campaign in May 
1991, that used an "intei inside" logo. This cooperative 
advertising campaign with eguipment manufacturers, was 
started to emphasize the Intel brand name to personal 
computer consumers . It was also targeted at companies 
like AMD who had developed a clone of the 80386 
microprocessor. This also led to the discontinuation of 
the x8 6 designation for new microprocessors with the 
introduction of the Pentium in 1993. 

The Peripheral Component Interface (PCI) that had 
been developed by Intel, was announced in 1993. This 
technology permitted faster graphics and enhanced 
computer performance. Intel offered royalty-free 
licenses on the PCI patents to other companies to 
promote the new standard. 

With the release of the Pentium in 1993, Intel 
also became a manufacturer of motherboards . This enabled 
Intel to implement new microprocessor releases and 
related chips to small companies at a faster rate 
comparable to the larger personal computer 
manufacturers . 

Intel and Hewlett-Packard announced a joint 
venture to develop a new microprocessor in June 1994. 

The company acguired the outstanding shares of 
Chips and Technologies, Inc., for approximately $430 
million in January 1998 . Intel also purchased the 



16/8 Part IV 1990's - Current Technology 

semiconductor operations of Digital Equipment 
Corporation for $585 million in May 1998. 

Intel was estimated to have 8 6.7% share of the 
microprocessor market in mid 1998. In June the Federal 
Trade Commission (FTC) file an antitrust complaint 
against Intel. The FTC alleged that Intel used its 
dominant position to withhold technical data and 
threatened to restrict supply of chips to other 
manufacturers who had intellectual disputes with the 
company. 

At the end of Intel's 1999 fiscal year in 
December, the company had revenue of $29.4 billion and 
the number of employees was 70,2 00. Gordon Moore was 
chairman emeritus of the board, Andrew Grove chairman of 
the board and Craig R. Barrett was president and chief 
executive officer. 

Microsoft 

In April 1990, the company appointed Michael R. 
Hallman as president and chief operating officer, to 
replace Jon Shirley who had decided to retire. Hallman 
had been at IBM for 20 years and then as president of 
Boeing Computer Services . Shirley remained on the Board 
and Hallman assumed operational responsibilities in 
June. Brad A. Silverberg also joined the company in 1990 
to head the Windows and MS-DOS group and became a vice 
president of Microsoft. Nathan Myhrvold became a vice 
president responsible for advanced technology and 
business development in 1990. 

In March 1991 arguments on items in the 
Windows /Macintosh graphics litigation were determined in 
favor of Apple. Also in March, it became public that the 
Federal Trade Commission (FTC) was investigating 
Microsoft for possible antitrust violations. The FTC 
actually began the inquiry in June 1990. The Commission 
of the European Communities also launched a similar 
investigation of Microsoft practices, after receiving 
complaints from Novell, Inc. 

Microsoft had another stock split in 1991, a three 
for two issue. By the end of 1991 Bill Gates owned about 
57 million shares or 33 percent of Microsoft. In October 
1992, Forbes magazine reported Gates to be the richest 



Corporate Activities in the 1990's 16/9 

person in North America with an estimated worth of about 
$6.3 billion. 

James Allchin joined Microsoft in 1991 and 
subsequently became a vice president. He is head of the 
business systems division with responsibilities that 
include Windows NT and the advanced Cairo project. 

After less than two years as the president Michael 
Hallman left the company. This resulted in a major 
reorganization of the company into three major groups in 
March 1992. The three groups reporting through a new 
Office of the President, were Products, Sales and 
Support, and Operations. Executive vice president Mike 
Maples had the Products Group, Steve Ballmer as an 
executive vice president, the Sales and Support Group 
and Frank Gaudette was Chief Financial Officer with 
responsibilities for the Operations Group. Craig Mundie 
joined the company in 1992 and became head of the 
advanced consumer division and was appointed a vice 
president of Microsoft. 

In April 1992, the judge favored Microsoft and 
dismissed a significant part of the Apple Computer 
charges that Windows software infringed the "look and 
feel" of the Macintosh graphics system. In August the 
court made additional judgments in favor of Microsoft. 
Then in August 1993 the court dismissed all of Apple 
Computer's remaining infringement claims. 

Then in June 1992, Microsoft announced a major 
agreement with IBM that confirmed their joint 
development separation. IBM relinquished rights to 
Windows NT, but was however allowed to use Windows 
software until September 1993. Microsoft would receive a 
royalty for each copy of OS/2 sold, but paid IBM a one- 
time payment for use of certain IBM patents. 

In 1993 the Federal Trade Commission litigation 
started in 1990, was moved to the Department of Justice 
by the Clinton administration. Richard (Rick) Rashid 
joined the company in 1993 and became head of research 
and a vice president of Microsoft. Rashid was an expert 
in operating systems and chief architect in the 
development of Mach, a UNIX-based operating system. 

Bill Gates married Melinda French, a Microsoft 
product manager on January 1, 1994 on the Hawaiian 



16/10 Part IV 1990's - Current Technology 

island Lanai . In March 1994, Microsoft reached an 
agreement with Tele-Communications, Inc., to develop an 
interactive cable-TV system for personal computers. This 
is a new entry into the information highway market by 
Microsoft . 

Microsoft lost a patent infringement law suit by 
Stac Electronics in February 1994. The infringement 
pertained to the DoubleSpace disk compression utility 
included in MS-DOS Versions 6.0 and 6.2. Microsoft 
deleted DoubleSpace in Version 6.21 and added DriveSpace 
in Version 6.22 released in June 1994. Also in June, 
Microsoft acguired Softimage, Inc., a leading developer 
of high performance 2-D and 3-D computer animation and 
visualization software. 

Microsoft signed a consent agreement with the 
Department of Justice in August 1994, regarding 
potential antitrust violations. A similar agreement was 
reached with the European Union. However in February 
1995, a Federal judge decided not to ratify the 
agreement. This was successfully appealed by Microsoft 
and the Department of Justice later in 1995. 

Microsoft signed an agreement in October 1994 to 
purchase a company called Intuit, Inc. Intuit had a very 
popular personal finance program called Quicken. However 
after the intervention of the Department of Justice to 
block the merger, Microsoft withdrew its offer to 
purchase the company in May 1995. 

In July 1995, Gates made another major 
reorganization following the retirement of Mike Maples. 
Five senior executives now directed four operating 
groups. Steve Ballmer the Sales and Support Group, 
Robert J. Herbold the Operations Group, and Frank M. 
(Pete) Higgins and Nathan P. Myhrvold directed the 
Applications & Content Group and Paul A. Maritz the 
Platforms Group. 

Microsoft released Windows 95 that previously had 
the code name of Chicago in August 1995. Microsoft also 
provided capability within Windows 95 to access a new 
Microsoft Network (MSN) . In December, Bill Gates 
announced the company' s commitment to supporting and 
enhancing the Internet by integrating its software with 
the public network. Also in December, the company 



Corporate Activities in the 1990's 16/11 

entered into a 50/50 partnership with the NBC television 
network to create a news /information channel and an 
interactive online news service for the Microsoft 
Network (MSN) . 

In January 1996, Microsoft acquired Vermeer 
Technologies Inc., and the FrontPage application 
software. FrontPage is a tool for creating and managing 
Web documents without programming. In February, the 
Interactive Media Division was created with 
responsibilities for applications for children and 
games, the Microsoft Network on line service and 
products of the now-dissolved Consumer Products 
Division. Jeffrey Raikes was promoted to group vice 
president for sales and marketing in July and in 
December the Office of the President was replaced by an 
executive committee. 

In June 1997, Microsoft invested $1 billion in 
Comcast Corporation, the fourth-largest cable television 
operator in the USA. 

WebTV Networks, Inc., was acquired by Microsoft 
for $425 million in August 1997. WebTV Networks was an 
online service that enabled consumers to access the 
Internet through their television via set-top terminals 
using proprietary technologies. 

Microsoft invested $150 million in non voting 
shares of Apple Computer stock in August 1997. Bill 
Gates and Steve Jobs described a broad product and 
technology development agreement between the two 
companies. Microsoft also agreed to develop future 
versions of the popular Office suit of programs for the 
Macintosh computer. 

In October 1997, the Department of Justice 
announced a new investigation of Microsoft. The 
department stated that the company was violating anti- 
competitive licensing practices for personal computer 
manufacturers by tying the use of its Windows 95 
operating system to the use of its Internet Explorer 
software. This investigation, resulted in the launching 
of an antitrust suit by the Department of Justice and 20 
States against Microsoft in May 1998. The antitrust 
trial opened in October, and the number of States was 
reduced to 19 when South Carolina withdrew in December. 



16/12 Part IV 1990's - Current Technology 

Microsoft released Windows 98 in June. In July, 
Gates appointed Steve Ballmer as president of the 
company. 

At the end of Microsoft's 1999 fiscal year in 
June, net revenue was $19.7 billion. Microsoft is now 
the world's largest software company. 

In September 1999, Microsoft announced it will buy 
the Visio Corporation for $1.3 billion in stock. Visio's 
main software is a graphics package for drawing such 
things as flowcharts, block diagrams and networks. The 
November 29, 1999 issue of Forbes magazine reported Bill 
Gates net worth to be $93 billion, Paul Allen $26 
billion and Steve Ballmer $22 billion. Gates was number 
1, Allen number 2 and Ballmer number 3 on the list of 
the world' s top technological billionaires . 

Novell 

In 1992, Novell acguired Digital Research, Inc. 
from Gary Kildall who died in July 1994. 

Novell acguired the WordPerfect Corporation for 
$1.4 billion in March 1994 and bought the Quattro Pro 
spreadsheet from Borland International for $110 million 
in June. Novell also purchased a license to market the 
Borland Paradox database for $35 million. Novell made 
the acguisitions to gain a greater penetration in the 
business applications market. However, the Novell board 
became unhappy with the acguisitions and forced Raymond 
Noorda to leave. He was replaced by Bob Frankenberg who 
had been at Hewlett-Packard for twenty-five years. 

The company released a suit of applications called 
PerfectOffice in early 1995. 

By October 1995 the WordPerfect contribution to 
Novell sales had declined and was affecting the 
company' s profitability. This resulted in the sale of 
WordPerfect and related suite software to Canadian Corel 
Corporation for $10.75 million and shares of Corel stock 
in February 1996. Corel Corporation was now one of the 
dominant suppliers of software for personal computers. 

The board once again became unhappy with its CEO 
and in late 1996 Frankenberg resigned. He was replaced 
by Eric Schmidt who had been the chief technology 



Corporate Activities in the 1990's 16/13 

officer of Sun Microsystems. Significant reorganization 
and layoffs were made in 1997 to improve profitability. 

Sun 

In early 1990, Sun decided to consolidate its 
computer designs on the SPARC microprocessor technology. 
Its workstations would not use the Motorola 
microprocessor and the 3861 personal computer with the 
Intel microprocessor was discontinued. The SuperSPARC 
microprocessor was released in 1991 to mixed reviews and 
incorporated into Sun's workstations in 1993. The 
Solaris operating system was also introduced in 1993. 

By 1995, Sun was doing very well. The combination 
of computers with a new UltraSPARC microprocessor 
released in 1995 with the Solaris operating system made 
a significant improvement in revenues and more 
importantly profits. Sun had also become a major source 
for powerful servers that powered the Internet. Another 
important event in 1995 with implications for the 
Internet, was the introduction of the Java programming 
language . 

In 1996, Sun acguired a high-end server product 
line from Silicon Graphics . The server had been designed 
by Cray Research using the Sun SPARC microprocessor and 
the Solaris operating system. Sun also considered 
acguiring the Apple Computer company in 1996. However, 
after further consideration it decided not to. 

In late 1997, Sun announced that it would develop 
a version of Solaris operating system for the new Intel 
Merced microprocessor. This would reduce Intel's 
dependence on Microsoft and provide a UNIX operating 
system alternative. 

An entry-level line of workstations called Darwin 
was introduced in January 1988. These low-cost 
workstations sold for under $3000 without a monitor. 

Ed Zander who is the chief operating officer was 
given the additional title of president in April 1999. 
Scott McNealy who relinguished the position of president 
remains the chairman and chief executive officer. 

In August 1999, Sun acguired Star Division, a 
software developer of the StarOffice suit of 
productivity programs. Sun subseguently announced the 



16/14 Part IV 1990's - Current Technology 

development of a version of the suit called StarPortal 
for the World Wide Web. This is intended to provide a 
new method of competing with the highly successful 
Microsoft Office suit of programs. 

Sun, and in particular Scott McNealy has 
contributed to and supported the Department of Justice 
anti-monopolistic litigation against the Microsoft 
Corporation. Sun has become not just a major supplier of 
workstations and computer servers, but also a 
significant innovator in software and a potential threat 
to Microsoft in certain segments of the market. 

Other Companies 

1990 

Jean-Louise Gassee with financial backing from 
AT&T and Seymour Cray founded Be Inc., in 1990. Erich 
Ringewald who had also been at Apple Computer, was the 
director of engineering. The company demonstrated a new 
personal computer called the BeBox in October 1995. The 
computer system price ranged from $1,600 to $3,000. 

In the early 1990' s, the Symantec Corporation 
acquired a number of companies such as the Peter Norton 
Computing company in 1990 and the rival Central Point 
software company. Symantec now focuses its product line 
on communications, networks and is a leading supplier of 
utilities software. 

1991 

Borland International acquired Ashton-Tate and the 
dBASE database application program software for $440 
million in 1991. 

Starting in 1991, the Digital Equipment 
Corporation (DEC) encountered financial losses. This 
resulted in significant staff reductions and company 
reorganization in 1992. However the losses continued and 
resulted in the retirement of co-founder Kenneth Olsen 
in October. He was replaced by Robert B. Palmer who had 
joined DEC in 1985. 



Corporate Activities in the 1990's 16/15 

1992 

MIPS Computer Systems started having problems 
around 1990 and was purchased by Silicon Graphics in 
1992. Also in 1992, the Corel Systems Corporation, the 
Canadian developer of CorelDRAW graphics software, 
changed its name to Corel Corporation. 

At WordPerfect Corporation, the two principal 
owners Alan Ashton and Bruce Bastian decided to 
implement a management reorganization in March 1992. 
This resulted in Pete Peterson, the executive vice 
president who made significant contributions to the 
development of the corporation, leaving the company 
shortly after. 

Intuit released QuickBooks, an easy-to-use 
accounting program in 1992. The company went public in 
1993. 

Carol Bartz who had been a vice president of 
marketing at Sun Microsystems, was recruited by the 
board of Autodesk in 1992 to replace founder John 
Walker. Bartz is now the chief executive officer and 
chairman of Autodesk. Walker left the company in 1994. 

1993 

In February 1993, Steven Jobs sold the computer 
hardware operations of the NeXT Computer company to 
Canon Inc. Also in 1993, the Tandy/Radio Shack personal 
computer manufacturing operations were merged with AST 
Research . 

1994 

In early 1994, WordStar International (formerly 
MicroPro International Corporation) had financial 
difficulties and merged with Softkey Software Products 
and Spinnaker Software Corporation to become Softkey 
International, Inc. 

Commodore International was liguidated in April 
1994. Adobe Systems acguired Aldus Corporation in 
August 1994 whose main product was the desktop 
publishing program called PageMaker. 

Hayes Microcomputer Products encountered financial 
problems in November 1994 that resulted in them filing 
for protection from creditors. The company then 



16/16 Part IV 1990's - Current Technology 

reorganized and emerged from Chapter 11 protection in 
early 1996. 

1995 

Advanced Micro Devices (AMD) and Intel, reached a 
compromising settlement in their joint litigation 
regarding AMD's use of Intel technology in January. 

The Zeos personal computer company was purchased 
by Micron Technology in 1995. Joseph and Ward Parkinson 
and Doug Pitman had founded Micron Technology, Inc. in 
1978 as a semiconductor design consulting company. In 
1982, the company started manufacturing semiconductor 
memory chips. The purchase of Zeos resulted in the 
formation of Micron Electronics, Inc. that is now a 
major direct marketer of personal computers. 

In December 1995 the joint venture between Apple 
Computer and IBM to develop an advance operating system 
by Taligent was dissolved. Taligent became an IBM 
subsidiary. 

1996 

silicon Graphics acguired Cray Research, Inc., a 
manufacturer of supercomputers, in February 1996 for 
$161 million. However, it was not a successful 
acguisition and Silicon Graphics announced it was 
selling the remains of Cray Research in March 2000. 

In July 1996, The Atari Corporation was 
terminated. AMD acguired the NexGen company in 1996, 
that had developed advanced microprocessor designs. 

In early 1996, Packard Bell Electronics purchased 
Zenith Data Systems and its personal computer products. 
Then in July, a merger was formed to integrate Packard 
Bell Electronics and the NEC corporation' s worldwide 
personal computer operations outside Japan. The merged 
company became Packard Bell NEC, Inc. Beny Alagem serves 
as chairman, chief executive officer and president of 
the new company. The company is reported to be the 
second largest supplier of personal computers in the USA 
market . 

Since the termination of its computer, the NeXT 
Computer company has concentrated its efforts on 
software development. In early 1996 the company changed 



Corporate Activities in the 1990's 16/17 

its name to NeXT Software, Inc. Then in December, Steven 
Jobs sold the company to Apple Computer. 

1997 

Acer Inc., acquired the notebook computer 
operations of Texas Instruments in February 1997. The 
3Com Corporation acquired the U.S. Robotics Corporation 
in June 1997 in an $8.5 billion stock swap. 

1998 

The Hayes Corporation filed for protection from 
creditors in October 1998, and subsequently announced it 
was closinq down the company in January 1999. 

Borland International changed the company name to 
Inprise Corporation in April 1998. 

1999 

Lew Piatt, chairman of the board, president and 
chief executive officer of Hewlett-Packard, announced 
that the company was being slit into two separate 
companies in 1999. The medical and instrument business 
became Agilent Technologies Inc. The computer, printer, 
software and service business retained the Hewlett- 
Packard company name. Carleton S. Fiorina became 
president and chief executive officer of the HP computer 
company in July. 

America Online completed its acquisition of 
Netscape Corporation for $4.3 billion in March. The 
acquisition was assisted by a partnership between AOL 
and Sun Microsystems. Sun agreed to buy Netscape 
software and AOL agreed to buy Sun products and support 
the Java programming language. 

In November, Packard Bell NEC announced it was 
closing its USA operations by the end of the year. 
Cheaper competitive products had resulted in financial 
losses and quality problems contributed to the closure. 



16/18 Part IV 1990's - Current Technology 



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