The Soul of a New Machine Read online

  Among the founders of the company, only de Castro — the much-talked-about president — and Richman remained engaged in daily operations. Richman had come up through the industry in sales — a supersalesman, some called him — and he had created and run Data General's sales force, which was known if not notorious for its aggressiveness. Curly-haired, trim and in his forties, Richman wore a nicely tailored denim jacket and no tie. "I'm one of the few guys that money made a nice guy out of," he said. "Before, I was just driven, clawing Success has made me more rational and introspective." He remarked that not long ago he had been playing tennis with a man who had seemed to him just an ordinary fellow, but then he had found out that the man was actually president of an oil company. "And it was one of the largest oil companies in the world, and I was just in awe of him," said Richman. He added, softly, "And yet I bet my net worth greatly exceeded his."

  The stock that Richman himself owned in Data General was worth about $13 million then, but, he seemed to say, he was unhappy with the way certain organs of the press depicted his company's achievements. They were, Richman believed, too often depicted as "ruffians," not as merely rough, which they were proud to be. "We agree that a lot of things we've done around here are wild," he said. "But we can't understand why we're tabloid, instead of the New York Times."

  Some part of Data General's reputation was easy to explain. The company had promoted it themselves, and maybe it had gotten a little out of hand. Richman suggested, "We've done so much so well for so long that everyone seems to think we have to be doing something illegal." A good point, but not a full accounting.

  Some years back, in the early seventies, a company called Keronix accused Data General's officers of arranging the burning of a factory. Keronix had been making computers that performed almost identically to Data General machines. The theory was that Data General had taken a shortcut in attempting to get rid of this competitor. In time, the courts found no basis for those charges and dismissed them. Indeed, it seemed preposterous to think that the suddenly wealthy executives of Data General would risk everything, including jail, and resort to arson, just to drive away what was, after all, a small competitor. But Wall Street didn't see it that way, apparently. When Keronix made its accusation, Data General's stock plummeted; there was such a rash to unload it that the New York Exchange had to suspend trading in it for a while. More peculiar was the fact that many years later, some veteran employees, fairly far down in the hierarchy, would say privately that they believed someone connected with the company had something to do with that fire. Not the officers, but some renegade within the organization. They had no basis for saying so, no piece of long-hidden evidence. It seemed to me that this was something that they wanted to believe.

  I got this feeling more than once. Turning down the road to Building 14A/B one day, a veteran engineer pointed out the sign that warned against unauthorized parking. "The first sign you see says Don't," he remarked. He imagined another sign by the road; it would say: Use of Excessive Force Has Been Approved. The engineer laughed and laughed at the thought.

  In a land of tough and ready companies, theirs, some of Data General's employees seemed to want to think, was the toughest and the readiest around.

  Certainly Data General's reputation had other underpinnings besides advertisements and imagination. In an industry where sharp marketing practices were common, Data General's were as sharp as any, and by the late 1970s competitors were challenging some of them in federal court. To the contention, leveled in Fortune, that Data General played especially rough with its customers, it was only fair to add that many of Data General's customers knew very well what sort of market they were in, and moreover, it was clear that the company could not have survived if most of its customers had not felt at least fairly satisfied. But Data General was litigious, toward customers as well as others. "Sure," said Richman, "if people don't pay us or breach our contract, we litigate 'em." They did so at least in part to assure Wall Street that they weren't the sort of company that would accumulate a crippling number of bad debts.

  The salient feature of Data General, however — what that sharp-eyed, astonished visitor from Wall Street would have pondered— was its growth. This was indeed the industry's salient characteristic. In the main, computer companies that were not dying were growing; they had to do so just to stay alive, it seemed. But no company whose primary business was making computers had grown more rapidly than Data General. Bursts of growth were not uncommon, but Data General had been bursting for a decade, and what's more, it had been maintaining the highest profit margins in the industry next to IBM's. All this would have impressed the analyst from Wall Street, of course, but would also have given him pause.

  Building 14A/B and its sparse furnishings, the facts that Data General paid its stockholders no dividends and that its top managers dispensed to themselves and other officers exceptionally small salaries, meting out rewards in the form of stock instead — all were signs of a common purpose. The company had displayed extravagance when it came to financing its tendency to go to court. Otherwise, the management seemed bent on saving all their cash to feed the hungry beast of growth. And, of course, the more this beast gets fed, the bigger it becomes, the more it wants to eat. It is one thing for a company with revenues of a million dollars a year to grow 30 or 40 percent in a year and quite another for a half-a-billion-dollar company to pull off the same trick.

  Analysts on Wall Street sometimes become boosters of the companies they follow. Looking for an opinion that was certain to be disinterested, I asked an old friend, a veteran analyst of securities, to take a look at Data General's numbers. He had the advantage of never having followed the company before, and in return for anonymity he agreed to my proposal. A couple of weeks later, he called me back. It seemed to him that Data General was bent on continuing to grow at 30 to 40 percent a year. He pointed out that this meant large growth in everything — in the need for capital, new buildings, new employees. Between 1974 and 1978, for instance, Data General had hired about 7,000 new employees, roughly tripling its numbers; in one year alone the company had increased its ranks by 71 percent. The analyst imagined the difficulties of finding that many qualified people so quickly. And what must it be like, he asked, to work at a place like that? You'd come to work some morning and suddenly find yourself in charge of a dozen new people, or suddenly beneath a new boss to whom you would have to prove yourself all over again. "That sort of growth puts a strain on everything," the analyst concluded. "It's gonna be intriguing to see if they get caught." He thanked me for putting him onto such a marvelous entertainment.

  Where did the risks lie? Where could a company go badly wrong? In many cases, a small and daily growing computer company did not fall on hard times because people suddenly stopped wanting to buy its products. On the contrary, a company was more likely to asphyxiate on its own success. Demand for its products would be soaring, and the owners would be drawing up optimistic five-year plans, when all of a sudden something would go wrong with their system of production. They wouldn't be able to produce the machines that they had promised to deliver. Lawsuits might follow. At the least, expensive parts would sit in inventory, revenues would fall, customers would go elsewhere or out of business themselves. Data General got one leg caught in this trap back around 1973. Six years later, a middle-level executive, sitting in an office upstairs at headquarters, remembered that time: "We were missing our commitments to customers. We just grossly fucked over our customers. We actually put some entrepreneurs out of business and I think some of them may have lost their houses. But we recovered from our shipment problems and never repeated them."

  Another way of fouling up had less to do with a company's own growth than with the growth occurring all around it. From observers of the industry came such comments as: "Things change fast in the computer business. A year is a hell of a long time. It's like a year in a dog's life." In every segment of the industry, companies announced small new products for sale every day. Compani
es brought out new lines of computers, much more powerful than the ones they replaced, only every few years or so; but considering all the work that went into them and the fact that they required a redirection of effort throughout a company, the pace at which these major announcements came was very rapid too. Conventional wisdom held that if a company fell very far behind its competitors in producing the latest sorts of machines, it would have a hard time catching up. And failure to stay abreast could have, serious consequences, because major new computers played crucial roles in the other business of the companies; they helped them sell all their little products and, often, their older types of machines.

  At some companies the task of guarding against this sort of crisis fell mainly to engineers, working below decks, as it were. Executives might make the final decisions about what would be produced, but engineers would provide most of the ideas for new products. After all, engineers were the people who really knew the state of the art and who were therefore best equipped to prophesy changes in it. At Data General, an engineer could play such an important role. It was there for the taking. The president, de Castro, liked "self-starters," it was said. Initiative was welcomed at Data General, and in the late seventies it appeared that the company had need of some initiative from its engineers. For Data General was in a bind. The firm had fallen behind the competition: it hadn't yet produced the latest big thing in minicomputers.

  Early in 1979 the businessman who told me about Data General's problems and recovery back in '73 bit upon a heroic metaphor for success in the computer business. 'The major thing," he said, "is avoiding the big mistake. It's like downhill ski racing: Can you stay right on that edge beside disaster? At Data General we keep coming up with these things that are basically acts of recovery. What Tom West and his people are doing is a great act of recovery."

  THE WARS

  Tom West went to work these days in freshly laundered blue jeans or pressed khakis, in leather moccasins and in solid-colored long-sleeved shirts, with the sleeves rolled up in precise folds, like the pages of a letter, well above his bony elbows. He expostulated with his hands. When dismissing someone or some idea or both, he made a fist and then exploded it, fingers splaying wide. The gesture was well known to the engineers who worked for him. Long index fingers inserted under either side of the bridge of his glasses signified thought, and accompanied by a long "mmmmmnimmh" warned that some emphatic statement was near. He kept his car and his office as neat as the folds in his sleeves. He was decisive, and in his manner, exact. For all of that, he was vague. "When I first went to work, he was ray boss," an engineer said of West, "and it was amazing! Half the time I couldn't figure out what he was saying." He was not always this way, said one of his oldest colleagues, but sometimes you got the feeling that West expected you to be on his secret wavelength, and if you weren't he'd be disappointed in you. If you weren't, that was your problem. He didn't have time to explain.

  Seen at the wheel of his sporty red Saab, driving to work down 495, West made a picture of impatience. His jaw was set, he had a forward lean. Sometimes he briefly wore a mysterious smile. He was a man on a mission.

  Into the world of the minicomputer a new thing had been bora, a class of computer known as a 32-bit supermini. West said, with characteristic enthusiasm: "Everyone thinks they want one now. It's an emotional issue. In fact, it's kind of a fire storm." As for the present state of affairs, sometimes he called it "a disaster." Sometimes he would say, "We're gonna get schmeared if we don't react to VAX."

  A number of Data General's rivals had produced 32-bit superminis, and the most important from West's point of view was the computer that DEC had recently sent to market, a machine called the VAX 11/780. Data General, meanwhile, had not yet produced a computer of this class. Many people, including West, believed that they must do so, and in fairly short order. Partly it was a matter of keeping up appearances: customers get married to their computer companies in many different ways and they don't usually want to get or stay married to a company that has fallen behind the state of the art. Besides, you had to grab a piece of the new market for the 32-bit supermini because that market was huge and growing fast; most observers agreed that it would be worth several billion dollars by the middle 1980s. You did not have to be the first company to produce the new kind of machine; sometimes, in fact, it was better not to be the first. But you had to produce yours before the new market really opened up and customers had made other marriages. For once they are lost, both old and prospective customers are often gone for good.

  It had been painful for West and for a number of engineers working with him at Westborough to watch DEC'S VAX go to market, to hear it described as "a breakthrough," and not have a brand-new machine of their own to show off. It had been painful for them to read in the trade press of the VAX's growing success; VAX was beginning to look like one of those best-sellers that come along only once in a while. But by the fall of 1978 West had drawn around him a team of enthusiastic engineers and they were finally working on their own supermini, which they had nicknamed Eagle. A new computer, especially one of this class, does not get built in a month. Often it takes years to bring one to life. But it wasn't too late, West was saying. Not if they could build this computer in the record time of something like a year. This was at last "the right machine." This was "the answer to VAX." At times West fancied that this computer would become the source of Data General's continued ascent in the Fortune 500. "This is the second billion," he said. His doubts he did not share widely.

  Secretly, West felt afraid of VAX. DEC had published a great deal of technical literature describing VAX, and West had read all of it. Nothing in this material had made him feel that his team's approach was inferior to DEC's. In some engineers, however, reading does not constitute knowing. For them, touch is the first of the senses. And so, one holiday morning in 1978, when his team was already well launched on the building of its own machine, West went away from Westborough to have a look at a VAX for himself.

  He traveled to a city, which was located, he would only say, somewhere in America. He walked into a building, just as though he belonged there, went down a hallway, and let himself quietly into a windowless room. The floor was torn up; a sort of trench filled with fat power cables traversed it. Along the far wall, at the end of the trench, stood a brand-new example of DEC's VAX, enclosed in several large cabinets that vaguely resembled refrigerators. But to West's surprise, one of the cabinets stood open and a man with tools was standing in front of it. A technician from DEC, still installing the machine, West figured.

  Although West's purposes were not illegal, they were sly, and he had no intention of embarrassing the friend who had given him permission to visit this room. If the technician had asked West to identify himself, West would not have lied, and he wouldn't have answered the question either. But the moment went by. The technician didn't inquire. West stood around and watched him work, and in a little while, the technician packed up his tools and left.

  Then West closed the door, went back across the room to the computer, which was now all but fully assembled, and began to take it apart.

  The cabinet he opened contained the VAX's Central Processing Unit, known as the CPU — the heart of the physical machine. In the VAX, twenty-seven printed-circuit boards, arranged like books on a shelf, made up this thing of things. West spent most of the rest of the morning pulling out boards; he'd examine each one, then put it back.

  Across the surfaces of a typical computer's printed-circuit boards stand columns of small rectangular boxes, with metal legs descending from their sides. They might be some odd strain of caterpillar bred for mathematical ability. In fact, each of these boxes holds inside it another box, as it were — the intricate integrated circuitry known as a chip. Etched into the boards, among the housings of the chips, run many silvery bands; they make patterns like the tracks in large railroad yards.

  Some boards are colorful and most finished ones please the eye. A computer's boards seem to show order tr
iumphing in complexity. They look as if they make sense, but not in the way the moving parts of an engine make sense. The form on the surface of a board does not imply its function. It's difficult but possible to get inside the littlest boxes inside the boxes that constitute a modern computer, and bringing back the details, to create a functionally equivalent copy of the machine. Reverse engineering is the name for that art.

  West called it "knockoff copy work." He had a cleaner, simpler purpose. He examined the outside of the VAX's chips — some had numbers on them that were like familiar names to him — and he counted the various types and the quantities of each. Later on, he looked at other pieces of the machine. He identified them generally too. He did more counting. And when he was all done, he added everything together and decided that it probably cost $22,500 to manufacture the essential hardware that comprised a VAX (which DEC was selling for somewhat more than $100,000). He left the machine exactly as he had found it.

  "I'd been living in fear of VAX for a year," West said afterward, while driving along 495 one evening. "I wasn't really into G-Two. VAX was in the public domain and I wanted to see how bad the damage was. I think I got a high when I looked at it and saw how complex and expensive it was. It made me feel good about some of the decisions we've made."

  Looking into the VAX, West had imagined he saw a diagram of DEC's corporate organization. He felt that VAX was too complicated. He did not like, for instance, the system by which various parts of the machine communicated with each other; for his taste, there was too much protocol involved. He decided that VAX embodied flaws in DEC'S corporate organization. The machine expressed that phenomenally successful company's cautious, bureaucratic style. Was this true? West said it didn't matter, it was a useful theory. Then he rephrased his opinions. "With VAX, DEC was trying to minimize the risk," he said, as he swerved around another car. Grinning, he went on: "We're trying to maximize the win, and make Eagle go as fast as a raped ape."