IBM was a giant of the computer industry and when it released its own version of a PC it instantly became the most popular PC and set the market standard. Everybody shifted from building whatever they were making to creating something that was as close as possible to the IBM PC. So if you wanted to build an IBM clone it was as simple as licensing the operating system on IBM computers from Microsoft and getting the same parts used on the IBM PC from computer parts manufacturers. The reason for this was because of the BIOS which was quite literally the only part of the IBM PC that was proprietary. BIOS or the basic input/output system is the program a computer's microprocessor uses to start the computer system after it is powered on. Rod Canion, Bill Murto, and Jim Harris were the founders of Compaq before starting Compaq they worked at Texas Instruments, one day they realized that they were bored of the normal day-to-day corporate life and decided that they wanted to start a company. The Compaq PC was launched in November 1982. The selling point of the IBM PC was clear: it was exactly like the IBM PC but it was cheaper and portable. In their first year of Business, they set a business record for the largest first-year sales in history which was $111 Million. By the end of 1983, Compaq had sold 53 000 computers. IBM saw the success of the Compaq portable and began to feel threatened. They couldn’t understand why a little company called Compaq was out marketing and outselling them. So despite IBM’s best efforts, Compaq kept growing and growing, expanding from 6 employees when they started to more than 1 000 just 2 years later. In 1984 their sales hit $329 Million, In 1985 they hit $503 Million in sales. Because of how dominant IBM was in the 80s computer industry they always got first access to all Intel Chips, so every time Intel released a new Chip IBM would be first to get it and the rest of the computer industry would just follow them. In 1986 using cutting-edge Intel Chips Compaq launched the Deskpro 386 which at the time was the fastest and most advanced computer on the market. This caught IBM by surprise because they were used to getting first access to intel Chips but the Intel 386 Chip was offered to everyone at the same time and Compaq beat IBM to the punch by being the first to release a computer featuring the advanced 386 Chip. The Deskpro 86 brought more success for Compaq with sales topping $1 Billion in 1987. IBM realized that it was losing a ton of market shares to clones of its IBM PC and began suing companies that manufactured these clones. Rumors began to spread that IBM was going to Sue Compaq. IBM believed Compaq was using a large number of their patented technology without permission. IBM had thousands of Patents and an army of lawyers given enough time they would have found patent violations that Compaq was guilty of. IBM and Compaq eventually settled with Compaq agreeing to pay $130 Million to settle the lawsuit. The threat of IBM was seemingly gone after the settlement that was until April 2nd, 1987. On that Day IBM released its IBM personal system 2, the second generation of the IBM PC. The IBM personal system 2 had better technical specs. It utilized a system design called microchannels which meant that it was able to do more than one task at once like printing and simultaneously allowed you to type documents most computers at the time were only capable of doing one task at a time. Because of this about $12 Billion worth of software that had been bought by companies and individuals simply didn’t run on the IBM PC. Compaq CEO Rod Canion organized a meeting of 9 companies, amongst those companies were Intel, Microsoft, and 6 of the biggest PC manufacturers at the time except for IBM. They came up with the Extended Industry Standard Architecture which was a framework for the collaboration of all these companies to build compatible computer systems that were better than IBM’s PCs. It was a response to IBM's Microchannel computer. No longer could IBM dictate to the computer industry what the standard of a PC is rather the Computer Industry had set its own standard. The clones were divorcing from trying to be like IBM and going their own way. In 1989 following the announcement of EISA, Compaq’s Earnings hit an all-time high. In the same year, IBM’s earnings dropped by a 3rd to an all-time low.

• published: 25 Jun 2022
• views: 6738