How Hewlett Packard got in the computer business

[Tom Potter]

As no one, including Barney Oliver,
knows how Hewlett Packard got into the computer business,
I will set the record straight.

In the early 1960's Digital Equipment was growing rapidly
and making lots of money selling mini-computers.

At that time there was a lot of computer talent in Detroit.
Burroughs was big in mainframe computers and in calculators,
and Bendix manufactured the G15 minicomputer.

A guy in Detroit by the name of Sam Irwin
thought that he could build a cheap computer to compete with DEC
by using an acoustical delay line memory
instead of solid state memory.

He hired two or three electrical engineers,
rented a store front in Grosse Pointe Michigan,
and began to design a computer.

I was selling Hewlett Packard instruments at that time
and recognized that electronic logic and switching
was far superior to the electro-mechanical devices being
used by Dymec, the HP systems division,
and that the programable computer approach was far superior
to hard wired systems.

Following up a bingo card, I met Sam Irwin at his place,
and it appeared to me that his computer would make it
possible for me to sell many instrument and automation systems.

I knew at the time that Chrysler Financial wanted to automate
data collection of their many offices, and needed some kind
of automatic terminal. ( Data input, storage, modem, dial up, etc. )

I also knew that a computer controlled system
would be far superior to mechanical timers and switches
that the transfer machine manufacturers were using to
control the huge automated systems used by the auto industry.

I also had a couple of simulator manufactures in my territory
and figured I could sell systems to them ( Link trainers)

and I had many smaller potential deals including a
ham weighing system, a pipe line station test system, etc.

I was in the process of quoting Dr. Harlan Lane
at the university of Michigan a system that would generate
"speech model patterns" and dispense coins to students
who verbally matched the model patterns.

I took Sam around to visit him and other
potential customers and immediately got an
order from Dr. Lane.

As it turned out, Sam's acoustical delay line scheme was unstable
and didn't work and I had to cancel orders
and switch customers to systems using
the new DEC PDP8, or mechanical components as I did
with the ham weighing system, and I had to give up on
most projects such as the Chrysler smart terminals,
the transfer machine controls, computerized elevator controls
at Haughton Elevator in Toledo, Link Trainers, etc.

As Sam was running out of money and backers,
I told him to contact Hewlett Packard and get them
to back him as a small, cheap computer would be great
for instrumentation and control systems, and that
the electro-mechanical Dymec equipment was no good.

I wrote Dave Packard about Sam
and also suggested that as the Detroit Auto Industry was
becoming greedy and inefficient
and as more and more electronics
were being used in cars,

that HP should set up and co-ordinate
an "Open architecture" automobile program, and
utilize auto suppliers to produce parts
and bump shops assemble cars tailored to individual tastes and needs.

Dave Packard rejected auto business suggestion
as John Young also did when he became president.

They both probably thought I was nuts,
but they could have saved the America auto industry
and obtained a much larger market than ink jet printers,
not to mention providing better and cheaper cars to the public.

I assume that Sam Irwin approached HP on his own and was rejected
but he managed to get a large Michigan chemical company Union Carbide
to back him with the expectation that they could use the computers
to automate their processes, and perhaps to get into the computer business.

Although I was not privy to what happened later,
Sam was not able to get his computer
to work for Union Carbide, and I aasume that he approached HP
with a better deal, and they hired him and his two or three
engineers to come to Palo Also and tell them how to
make and program general purpose computers.

HP was into the programmable calculator business at that time
but they had no technology in general purpose computers.
There is a vast difference between hard wired systems,
programmable calculators, and von Neumann architecture machines.

I don't know what happened at HP, but either
Packard disposed of Sam, or Sam was determined to
be his own boss, but nevertheless, he ended up back
in Michigan, and perhaps stimulated by Chrysler's need
for many smart terminals, used Intel's new 8080 processor
to design a smart terminal which worked well as he sold
many of these and ended up selling the company to
the Canadian telephone company Northern TelCom.

He also designed a tape backup system
for the rapidly emerging micro computer business,
and became the largest employer in Ann Arbor Michigan.

Here's what Barney Oliver,
the head of HP's research and development had to say about
how HP got into the computer business.
=====================================================

"About the same time, Packard began to get a little uneasy. We
were not keeping up with progress in this automation field, and
so he decided that if anything came along that seemed
reasonable as a nucleus for a group, he would acquire it if
possible. When the Union Carbide group became available, we
snapped it up and used the personnel from that design group,
along with the people from our lab here who had already given
some thought to the problems, to form the initial group for the
2116.

KC: _That group from Union Carbide was called DSI, and to my
understanding, it was acquired more or less intact. But I don't
quite understand why Union Carbide had a computer design group
to begin with._

Oliver: We didn't demand an answer to that question -- as to
what their motives were. It sufficed that it was a ready-made
design group with some pretty reasonably talented people in it.."

==============================

As Dave Packard dismisses Sam Irwin lightly in his book
I suspect that they had some kind of falling out
and as Sam Irwin did not go into competition with HP
in automation and control, he must have been
restricted by some kind of employment contract.

I suspect that Sam just wanted to be his own boss
and got enough money from HP to design his smart terminal.

--
Tom Potter
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