Editing Compaq (section)

===Founding===
{{pic|Compaq logo 1982.svg|Logo used from 1982 to 1993}}
[[File:Rod Canion - SiliconCowboys-MFF16.jpg|thumb|Compaq co-founder [[Rod Canion]], pictured in 2016]]
Compaq was founded in February 1982 by [[Rod Canion]], [[Jim Harris (entrepreneur)|Jim Harris]], and Bill Murto, three senior managers from semiconductor manufacturer [[Texas Instruments]]. The three of them had left due to lack of faith and loss of confidence in TI's management and initially considered but ultimately decided against starting a chain of Mexican restaurants.<ref name="scribd1">{{cite web |url = https://www.scribd.com/doc/23519983/Martin-Puris-Comeback |title = Martin Puris – Comeback |publisher = Scribd.com |access-date = 2012-11-16 }}</ref><ref>{{cite web |url = https://tshaonline.org/handbook/online/articles/dnc01 |title = COMPAQ COMPUTER CORPORATION &#124; The Handbook of Texas Online&#124; Texas State Historical Association (TSHA) |publisher = Tshaonline.org |access-date = 2012-11-16 }}</ref> Each invested $1,000 to form the company, which was founded with the temporary name Gateway Technology. The name "COMPAQ" was said to be derived from "Compatibility and Quality" but this explanation was an afterthought. The name was chosen from many suggested by [[Ogilvy & Mather]], it being the name least rejected. The first [[Compaq Portable|Compaq PC]] was sketched out on a placemat by Ted Papajohn while dining with the founders in a pie shop,<ref name="scribd1" /><ref>{{cite news |url = https://www.usatoday.com/tech/techinvestor/2001-09-04-compaq-history.htm |title = Compaq: From place mat sketch to PC giant |date = 2001-09-04 |newspaper = USA Today |access-date = 2009-11-01 }}</ref> (named [[House of Pies]] in Houston). Their first venture capital came from [[Benjamin M. Rosen]] and [[Sevin Rosen Funds]], who helped the fledgling company secure {{US$|long=no|1.5 million}} to produce their initial computer.<ref name="ezinearticles_com">[http://ezinearticles_com/?Compaq-Computer---Joseph-R.-Rod-Canions-Success-Story&id=219879]{{dead link|date=May 2017|bot=InternetArchiveBot|fix-attempted=yes}}</ref> Overall, the founders managed to raise $25 million from venture capitalists, as this gave stability to the new company as well as providing assurances to the dealers or middlemen.

Compaq differentiated its offerings from other [[IBM PC clone]]s by not focusing mainly on price, but instead concentrating on new features such as portability and better technology, at prices comparable to those of IBM's PCs.{{r|halfhill198612}}{{r|bane19881120}} In contrast to Dell and [[Gateway 2000]], Compaq hired veteran engineers with an average of 15 years' experience, which lent credibility to Compaq's reputation of reliability among customers.<ref name="entrepreneur1">{{cite web |url = http://www.entrepreneur.com/article/197620 |title = Joseph R. "Rod" Canion |publisher = Entrepreneur.com |date = 2008-10-10 |access-date = 2012-11-16 }}</ref><ref name="britannica1">{{cite encyclopedia |url = https://www.britannica.com/EBchecked/topic/129604/Compaq-Computer-Corporation |title = Compaq Computer Corporation (American corporation) – Britannica Online Encyclopedia |encyclopedia = Britannica.com |access-date = 2012-11-16 }}</ref> Due to its partnership with [[Intel]], Compaq was able to maintain a technological lead in the market place as it was the first one to come out with computers containing the next generation of each Intel [[x86]] processors.<ref name="scribd1"/>

Under Canion's direction, Compaq sold computers only through dealers to avoid potential competition that a direct sales channel would foster, which helped foster loyalty among resellers. By giving dealers considerable leeway in pricing Compaq's offerings, either a significant markup for more profits or discount for more sales, dealers had a major incentive to advertise Compaq.<ref name="entrepreneur1"/><ref name="britannica1"/>

During its first year of sales (second year of operation), the company sold 53,000 PCs for sales of {{US$|long=no|111 million}}, the first start-up to hit the {{US$|long=no|100 million}} mark that fast. Compaq went public in 1983 on the NYSE and raised {{US$|long=no|67 million}}. In 1986, it enjoyed record sales of {{US$|long=no|329 million}} from 150,000 PCs and became the youngest-ever firm to make the [[Fortune 500]]. In 1985, sales reached $504 million.<ref name=":0">{{Cite web |last=Ramstad |first=Evan |date=1998-01-27 |title=Compaq to Acquire Digital, Once an Unthinkable Deal |url=https://www.wsj.com/articles/SB885817641399131000 |access-date=2022-12-03 |website=[[The Wall Street Journal]] |language=en-US}}</ref> The company shipped its 500,000th computer in April 1986.<ref name="halfhill198612">{{cite news | url=https://archive.org/stream/1986-12-compute-magazine/Compute_Issue_079_1986_Dec#page/n33/mode/2up | title=The MS-DOS Invasion / IBM Compatibles Are Coming Home | work=Compute! | date=December 1986 | access-date=9 November 2013 | author=Halfhill, Tom R. | pages=32}}</ref> In 1987, Compaq hit the {{US$|long=no|1 billion}} revenue mark, taking the least amount of time to reach that milestone.<ref name="ezinearticles_com"/><ref name="entrepreneur1"/> By 1991, Compaq held the fifth place spot in the PC market with {{US$|long=no|3 billion}} in sales that year.<ref>{{cite news |author = LAURENCE ZUCKERMANPublished: June 16, 1997 |url = https://www.nytimes.com/1997/06/16/business/compaq-computer-looks-back-and-sees-the-competition-gaining.html?pagewanted=print&src=pm |title = Compaq Computer Looks Back and Sees the Competition Gaining – New York Times |work = [[The New York Times]] |date = 1997-06-16 |access-date = 2012-11-16 |url-access=limited }}</ref> 

Two key marketing executives in Compaq's early years, Jim D'Arezzo and Sparky Sparks, had come from [[IBM Personal Computer|IBM's PC Group]]. Other key executives responsible for the company's meteoric growth in the late 1980s and early 1990s were Ross A. Cooley, another former IBM associate, who served for many years as SVP of GM North America; Michael Swavely, who was the company's chief marketing officer in the early years, and eventually ran the North America organization, later passing along that responsibility to Cooley when Swavely retired. In the United States, Brendan A. "Mac" McLoughlin (another long time IBM executive) led the company's field sales organization after starting up the Western U.S. Area of Operations. These executives, along with other key contributors, including Kevin Ellington, Douglas Johns, Steven Flannigan, and Gary Stimac, helped the company compete against the IBM Corporation in all personal computer sales categories, after many predicted that none could compete with the behemoth.

The soft-spoken Canion was popular with employees and the culture that he built helped Compaq to attract the best talent. Instead of headquartering the company in a downtown Houston skyscraper, Canion chose a West Coast-style campus surrounded by forests, where every employee had similar offices and no-one (not even the CEO) had a reserved parking spot. At semi-annual meetings, turnout was high as any employee could ask questions to senior managers.<ref name="scribd1"/><ref name="entrepreneur1"/>

In 1987, company co-founder Bill Murto resigned to study at a religious education program at the University of St. Thomas. Murto had helped to organise the company's marketing and authorized-dealer distribution strategy and held the post of senior vice president of sales since June 1985. Murto was succeeded by Ross A. Cooley, director of corporate sales. Cooley would report to Michael S. Swavely, vice president for marketing, who was given increased responsibility and the title of vice president for sales and marketing.<ref>{{cite news |url = https://www.nytimes.com/1987/04/08/business/business-people-compaq-founder-shifts-to-religion.html |work = The New York Times |title = BUSINESS PEOPLE; Compaq Founder Shifts to Religion |date = 1987-04-08 |url-access=limited }}</ref>

====Introduction of Compaq Portable====
[[File:Compaq portable.jpg|thumb|right|[[Compaq Portable]] (1983)]]
In November 1982, Compaq announced their first product, the [[Compaq Portable]], a portable [[IBM PC compatible]] [[personal computer]]. It was released in March 1983 at {{US$|long=no|2995}}. The Compaq Portable was one of the progenitors of today's [[laptop]]; some called it a "suitcase computer" for its size and the look of its case. It was the second IBM PC compatible, being capable of running all software that would run on an [[IBM Personal Computer|IBM PC]]. It was a commercial success, selling 53,000 units in its first year and generating {{US$|long=no|111 million}} in sales revenue. The Compaq Portable was the first in the range of the [[Compaq Portable series]]. Compaq was able to market a legal IBM clone because [[IBM]] mostly used "off the shelf" parts for their [[IBM Personal Computer|PC]]. Furthermore, [[Microsoft]] had kept the right to license [[MS-DOS]], the most popular and de facto standard operating system<ref>but not the only one</ref> for the IBM PC, to other computer manufacturers. The only part which had to be duplicated was the [[BIOS]], which Compaq did legally by using [[clean room design]] at a cost of {{US$|long=no|1 million}}.<ref>{{cite web |url = http://www.extremetech.com/article2/0,1697,21218,00.asp |title = Loyd Case: A Trip Down Memory Lane with Hewlett-Packard & Compaq |access-date = 2008-01-31 |work = extremetech.com |url-status = dead |archive-url = https://web.archive.org/web/20080120121139/http://www.extremetech.com/article2/0%2C1697%2C21218%2C00.asp |archive-date = 2008-01-20 }}</ref><ref>{{cite web |url = https://www.pbs.org/cringely/pulpit/1999/pulpit_19990930_000400.html |title = Real Trouble: How Reverse Engineering May Yet Kill Real Networks |access-date = 2008-01-31 |author = Robert X. Cringely |publisher = PBS |archive-url = https://web.archive.org/web/20071211074325/https://www.pbs.org/cringely/pulpit/1999/pulpit_19990930_000400.html |archive-date = 2007-12-11}}</ref><ref>{{cite web |url = http://www.islandnet.com/~kpolsson/comphist/comp1982.htm |title = Chronology of Personal Computers (1982) |access-date = 2008-01-31 |author = Ken Polsson }}</ref>

Unlike other companies, Compaq did not [[bundled software|bundle application software]] with its computers. Vice President of Sales and Service H. L. Sparks said in early 1984:<ref name="zientara19840402">{{cite magazine |url = https://books.google.com/books?id=kC4EAAAAMBAJ&pg=PA84 |title = Q&A: H.L. Sparks |magazine = [[InfoWorld]] |date = 1984-04-02 |access-date = 10 February 2015 |last = Zientara |first = Marguerite |pages = 84–85 | volume = 6 | issue = 14}}</ref>

{{Blockquote|We've considered it, and every time we consider it we reject it. I don't believe and our dealer network doesn't believe that bundling is the best way to merchandise those products.

You remove the freedom from the dealers to really merchandise when you bundle in software. It is perceived by a lot of people as a marketing gimmick. You know, when you advertise a {{US$|long=no|3000}} computer with {{US$|long=no|3000}} worth of free software, it obviously can't be true.

The software should stand on its merits and be supported and so should the hardware. Why should you be constrained to use the software that comes with a piece of hardware? I think it can tend to inhibit sales over the long run.}}

Compaq instead emphasized PC compatibility, of which Future Computing in May 1983 ranked Compaq as among the "Best" examples.<ref name="ward198311">{{cite magazine |url = https://archive.org/stream/byte-magazine-1983-11/1983_11_BYTE_08-11_Inside_the_IBM_PC#page/n249/mode/2up |title = Levels of PC Compatibility |magazine = [[Byte (magazine)|BYTE]] |date = November 1983 |access-date = 19 March 2016 |last = Ward | first = Ronnie |pages = 248–249 | volume = 8 | issue = 11}}</ref> "Many industry observers think [Compaq] is poised for meteoric growth", ''[[The New York Times]]'' reported in March of that year.<ref name="pollack19830327">{{Cite news |last=Pollack |first=Andrew |url=https://www.nytimes.com/1983/03/27/business/big-ibm-has-done-it-again.html |title=Big I.B.M. Has Done It Again |date=1983-03-27 |work=The New York Times |access-date=2020-03-16 |page=Section 3, Page 1 |language=en-US |issn=0362-4331 |url-access=limited }}</ref> By October, when the company announced the Compaq Plus with a {{val|10|ul=MB}} hard drive, ''[[PC Magazine]]'' wrote of "the reputation for compatibility it built with its highly regarded floppy disk portable".<ref name="pc19840124">{{cite magazine |url = https://books.google.com/books?id=kSzKzjWHeVEC&pg=PA39 |title = PC-Compatible Portables |magazine = [[PC Magazine]] |date = 1984-01-24 |access-date = 23 October 2013 |author1 = Cook, Karen |author2 = Langdell, James |page = 39 | volume = 3 | issue = 1 }}</ref> The company bragged that it was more IBM compatible than IBM itself.<ref name="watt19840716">{{Cite magazine |last=Watt |first=Peggy |date=1984-07-16 |title=Compaq Line Has 'Overdrive' |url=https://books.google.com/books?id=yS4EAAAAMBAJ&pg=PA47#v=onepage&q&f=true |access-date=2025-04-27 |magazine=InfoWorld |pages=47-51 |volume=6 |issue=29}}</ref> Compaq computers remained the most compatible PC clones into 1984,<ref name="mace19840109_16">{{cite magazine |url = https://books.google.com/books?id=ey4EAAAAMBAJ&pg=PA79 |title = IBM PC clone makers shun total compatibility |magazine = [[InfoWorld]] |date = 9–16 January 1984 |access-date = 4 February 2015 |author = Mace, Scott |pages = 79–81 | volume = 6 | issue = 2 & 3 }}</ref>and maintained its reputation for compatibility for years,{{r|iw19890123}} even as clone BIOSes became available from [[Phoenix Technologies]] and other companies that also reverse engineered IBM's design, then sold their version to clone manufacturers.

====Compaq Deskpro====
On June 28, 1984, Compaq released the [[Compaq Deskpro|Deskpro]], a 16-bit desktop computer using an [[Intel 8086]] microprocessor running at {{val|7.14|ul=MHz}}. It was considerably faster than an [[IBM Personal Computer|IBM PC]] and was, like the original [[Compaq Portable]], also capable of running IBM software. It was Compaq's first non-portable computer and began the Deskpro line of computers.

====Compaq DeskPro 386====
[[File:Compaq Deskpro 386 16Mhz.jpg|150px|thumb|Compaq Deskpro 386 16Mhz]]In 1986, Compaq introduced the [[Compaq Deskpro 386|Deskpro 386]], the first PC based on [[Intel]]'s new [[i386|80386]] microprocessor.{{r|lewis19891022}}<ref>{{cite web |url = http://www.techhive.com/article/126692/greatest_pcs_of_all_time.html?page=9 |title = PC World – The 25 Greatest PCs of All Time |date = 11 August 2006 |access-date = 2008-01-31 |archive-date = 2013-07-25 |archive-url = https://web.archive.org/web/20130725093306/http://www.techhive.com/article/126692/greatest_pcs_of_all_time.html?page=9 |url-status = dead }}</ref> [[Bill Gates]] of Microsoft later said<ref name="millergates19970325">{{Cite interview |last=Gates |first=Bill |interviewer=Michael J. Miller |title=Interview: Bill Gates, Microsoft |url=https://books.google.com/books?id=wVDB2C8IJRYC&pg=PA230 |date=1997-03-25 |pages=230-235 |magazine=[[PC Magazine]] |volume=16 |issue=6}}</ref>

{{Blockquote|the folks at IBM didn't trust the 386. They didn't think it would get done. So we encouraged Compaq to go ahead and just do a 386 machine. That was the first time people started to get a sense that it wasn't just IBM setting the standards, that this industry had a life of its own, and that companies like Compaq and Intel were in there doing new things that people should pay attention to.}}

The Compaq 386 computer marked the first CPU change to the PC platform that was not initiated by IBM.{{r|lewis19891022}} Compaq had concluded, according to ''PC'', that it could do so because "IBM's DOS standard is now bigger than IBM"; IBM could not make changes to the PC architecture it had created to hurt Compaq, without also obsoleting millions of real IBM PCs.<ref name="howard19861125">{{Cite magazine |last=Howard |first=Bill |date=1986-11-25 |title=386 Compatibility: What, Me Worry? |url=https://books.google.com/books?id=UwLE_FWJ-_0C&pg=PA141 |access-date=2024-11-01 |magazine=PC |page=141}}</ref> An IBM-made 386 machine reached the market almost a year later,<ref name="lewis19891022">{{Cite news |last=Lewis |first=Peter H. |date=1989-10-22 |title=THE EXECUTIVE COMPUTER; The Race to Market a 486 Machine |language=en-US |work=The New York Times |url=https://www.nytimes.com/1989/10/22/business/the-executive-computer-the-race-to-market-a-486-machine.html |access-date=2020-05-20 |issn=0362-4331 |url-access=limited }}</ref> but by that time Compaq was the leading 386 supplier with 28% market share, compared to IBM's 16%.{{r|bane19881120}}

For the first three months after announcement, the Deskpro 386 shipped with Windows/386. This was a version of Windows 2.1 adapted for the 80386 processor. Support for the [[virtual 8086 mode]] was added by Compaq engineers.  (Windows, running on top of the MS-DOS operating system, would not become a popular "operating environment" until at least the release of Windows 3.0 in 1990.)

====Compaq SystemPro====
Compaq's technical leadership and the rivalry with IBM was emphasized when the [[Compaq SystemPro|SystemPro]] server was launched in late 1989 – this was a true server product with standard support for a second CPU and [[RAID]], but also the first product to feature the [[Extended Industry Standard Architecture|EISA]] bus, designed in reaction to IBM's MCA ([[Micro Channel Architecture]]) which was incompatible with the original AT bus.

Although Compaq had become successful by being 100 percent IBM-compatible, it decided to continue with the original AT bus—which it renamed [[Industry Standard Architecture|ISA]]{{r|iw19890123}}—instead of licensing IBM's MCA. Prior to developing EISA Compaq had invested significant resources into reverse engineering MCA, but its executives correctly calculated that the $80 billion already spent by corporations on IBM-compatible technology would make it difficult for even IBM to force manufacturers to adopt the new MCA design. Instead of cloning MCA, Compaq led an alliance with Hewlett Packard and seven other major manufacturers, known collectively as the "[[Gang of Nine]]", to develop EISA.<ref name="britannica1"/>{{r|iw19890123}}<ref name=bane19881120>{{cite journal | last=Bane | first=Michael | date=November 20, 1988 | url=https://www.chicagotribune.com/news/ct-xpm-1988-11-20-8802180783-story.html | title=9 Clonemakers Unite to Take On the Industry Giant | journal=Chicago Tribune | page=11 | archiveurl=https://web.archive.org/web/20201112024817/https://www.chicagotribune.com/news/ct-xpm-1988-11-20-8802180783-story.html | archivedate=November 12, 2020}} {{ProQuest|282556133}}</ref>

====Compaq SLT and LTE====
{{multiple image|direction=horizontal|total_width=440
|image1=Compaq SLT-286.jpg|caption1=The [[Compaq SLT|SLT/286]], Compaq's first laptop, was released in 1988.
|image2=Compaq LTE 1st generation.jpg|caption2=The [[Compaq LTE|LTE]] was the first commercially successful [[Notebook (laptop)|notebook computer]] on its release in 1989.
}}
Development of a truly mobile successor to the Portable line began in 1986, the company releasing two stopgap products in the meantime, the [[Compaq SLT|SLT]] (Compaq's first [[laptop]]) and the [[Compaq Portable III]] (a lighter-weight, lunchbox-sized entry in the Portable line). In 1989, they introduced the [[Compaq LTE|LTE]], their first [[Notebook (laptop)|notebook-sized laptop]] which competed with [[NEC]]'s [[NEC UltraLite|UltraLite]] and [[Zenith Data Systems]]'s [[Zenith MinisPort|MinisPort]]. However, whereas the UltraLite and MinisPort failed to gain much uptake due to their novel but nonstandard data storage technologies, the LTE succeeded on account of its use of the conventional floppy drive and spinning hard drive, allowing users to transfer data to and from their [[desktop computer]]s without any hassle. As well, Compaq began offering [[docking station]]s with the release of the [[Compaq LTE/386s|LTE/386s]] in 1990, providing performance comparable to then-current desktop machines.<ref name=doesitagain>{{cite journal | last=Lewis | first=Peter H. | date=October 17, 1989 | url=https://www.nytimes.com/1989/10/17/science/personal-computers-compaq-does-it-again.html | title=Compaq Does It Again | journal=The New York Times | page=C8 | archiveurl=https://archive.today/20231019055439/https://www.nytimes.com/1989/10/17/science/personal-computers-compaq-does-it-again.html | archivedate=October 19, 2023}}</ref> Thus, the LTE was the first commercially successful notebook computer, helping launch the burgeoning industry.<ref>{{cite journal | last=Bridges | first=Linda | date=March 1, 1999 | url=https://link.gale.com/apps/doc/A53975770/GPS?sid=wikipedia | title=Making a Difference | journal=eWeek | publisher=Ziff-Davis | page=76 | via=Gale}}</ref> It was a direct influence on both [[Apple Inc.|Apple]] and [[IBM]] for the development of their own notebook computers, the [[PowerBook]] and [[ThinkPad]], respectively.<ref name=managing>{{cite book | chapter=Apple PowerBook: Design Quality and Time to Market | last=Thomke | first=Stefan H. | date=2007 | chapter-url=https://archive.org/details/managingproducts0000thom/page/59/ | title=Managing Product and Service Department: Text and Cases | publisher=McGraw-Hill/Irwin | pages=59–82 | isbn=9780073023014 | via=the Internet Archive}}</ref><ref name=blue>{{cite book | last=Dell | first=Deborah A. | date=2000 | url=https://archive.org/details/isbn_9780672317569/page/75/ | title=ThinkPad: A Different Shade of Blue | publisher=Sams Publishing | pages=75–78 | isbn=9780672317569 | via=the Internet Archive}}</ref>