“There is no reason for any individual to have a computer in his home”

Ken OlsenDigital Equipment Corporation (DEC) founder and longtime CEO Ken Olsen died this week at 84.  By all accounts, Olsen was a decent man but his passing is a timely reminder of the problems of lineal thinking with technology.

Olsen missed the PC revolution because he didn’t see oncoming OS improvements that would make the computer a consumer product.  He wasn’t alone.  Around 1980, IBM rejected a young Bill Gates’ offer to sell the forerunner of the Windows OS for about $100,000.  As decisions go, that’s akin to General Pickett telling his troops to take Cemetery Hill.

Olsen lasted as DEC’s CEO for another 15 years after making the above comment in 1977.  But by that time, the company was well into its death roll.

Fast forward to today: The PC era is ending and the OS as we’ve known it for a generation won’t matter because what made it important to us is quickly migrating to racks in a dark data center. Devices are increasingly coming preloaded with the OS on a chip, while apps and data are stored in the cloud.

Meanwhile, our computer gizmos are falling into two groups: mobile devices, including ultralight laptops, and large displays with integrated receivers for entertainment.

DEC’s mainframes lost to minicomputers 20+ years ago because the latter were less than half the cost.  (As an added bonus, they didn’t need a special room cooled to the temperature of Detroit in February.)  By the early 1990s, minicomputers had lost out to PCs because the computing cost of latter was less than half that of a VAX.   Now, look forward to what the cloud means: Companies can slash their IT staff because they won’t need to spend the money when employees have stripped down smart terminals, an small encrypted hard drive and an Ethernet connection.

Welcome to the future!