DEC, which Olsen launched in 1957, is considered an icon in technology circles today. The company attracted top engineers and helped usher in a technology revolution that changed the way people interact with computers.
In the 1960s and 1970s, Digital played a central role in creating the market for “minicomputers,” powerful, refrigerator-sized machines that appealed to scientists, engineers and other number crunchers who did not need the bigger, multimillion-dollar mainframes used by big corporations. At its peak in the 1980s, DEC was the second-largest computer maker behind International Business Machines Corp.
“In the heady days of Bill Gates and Steve Jobs, it’s too easy to forget that it was Ken Olsen’s vision of interactivity that took computing away from the centralized mainframe and into the hands of the people,” said Gordon Bell, who joined DEC in 1960 and headed the company’s engineering operations for more than 20 years.
Ultimately, DEC lost its way in the Internet-era transformations of the technology industry, which shrunk computers down to pocket-sized gadgets that people carry wherever they go. And Olsen is still remembered for his 1977 prediction that “there is no reason for any individual to have a computer in their home.” He later insisted the quote was taken out of context and that he simply meant he could not envision a day when computers would run people’s lives.
Born in Bridgeport, Connecticut, Olsen grew up in the neighboring town of Stratford. His father designed machine tools and Olsen and his brothers spent hours tinkering with gadgets in the family basement. After being drafted during World War II, Olsen attended the Navy’s electronics school, where he learned how to maintain radars, sonars and navigation systems. He went on to earn undergraduate and masters degrees in engineering from the Massachusetts Institute of Technology.
At MIT, Olsen worked in the university’s Lincoln Laboratory, a federally funded research center created in 1951 to develop technology to improve the nation’s air defense system. That technology, powered by MIT’s advanced Whirlwind computers, grew into the Air Force’s Semi-Automatic Ground Environment defense system, which was used to track and intercept enemy aircraft. One of Olsen’s roles at Lincoln Laboratory was to serve as a liaison with IBM, a major contractor on the project. Olsen also worked on Lincoln Lab’s TX-2 computer, which helped break new ground in computer-aided drafting.
In 1957, Olsen teamed with MIT colleague Harlan Anderson to start Digital Equipment Corp. with $70,000 from American Research and Development, an early venture capital firm.
The company was headquartered in an old wool mill in Maynard, Massachusetts.
DEC named its first computer the PDP-1, for Programr Data Processor. But it was the PDP-8, which was introduced in 1965 and became a building block for computer systems made by other companies, that really established minicomputers as a major new industry.
DEC’s innovative machines helped bring computers out from glass-enclosed rooms inside big corporations, where they were operated by men in white lab coats, and made them accessible to small and medium-sized operations and even individual users.
“The computers we built were of a cost and size that they brought computing down a level,” said Bell, now a principal researcher in Microsoft Corp.’s Silicon Valley Research Group.
DEC computers also trained and influenced many key players in the technology industry. Microsoft co-founders Bill Gates and Paul Allen used the PDP-10 to create the first version of the BASIC programming language for a personal computer. And Dave Cutler, who developed several key operating systems for DEC, went on to develop the Windows NT and Azure operating systems for Microsoft.
In 1986, Fortune Magazine called Olsen “America’s most successful entrepreneur.” By the late 1980s, DEC had more than 120,000 employees worldwide. Sales peaked at $14 billion in 1992.
Digital’s fortunes had begun to decline by the early 1990s. The company was late to recognize the growing popularity of smaller personal computers and desktop workstations for business use. DEC also resisted the market’s shift away from proprietary technology to open systems, including PCs powered by Intel microprocessors and generic servers running UNIX software.
