Webb McKinney’s oral history offers a fascinating glimpse into the challenges and missed opportunities experienced by HP as it navigated the rise of the personal computer. Despite its innovative culture and talented engineers, HP struggled to adapt its hardware-centric business model and decentralized structure to the rapidly evolving and increasingly commoditized PC market.
McKinney’s story highlights the tension between HP’s desire to differentiate its products through unique software and the market’s overwhelming preference for standardization and compatibility. While HP’s early digital instrumentation software enjoyed success in its niche market, later attempts like NewWave failed to gain widespread adoption, ultimately leading to HP’s withdrawal from the PC software arena.
However, McKinney’s account also reveals valuable lessons learned. He emphasizes the importance of clearly defined strategic intent, understanding the business side of software beyond just the technology, and the need to adapt to changing market dynamics. These insights remain relevant even today, serving as a reminder that even the most innovative companies must remain flexible and customer-focused to thrive in a dynamic industry like technology.
In the context of tech history, this interview provides valuable insights into the challenges faced by established hardware companies during the rise of the PC and the increasing importance of software in the industry. It serves as a cautionary tale about the dangers of clinging to outdated business models and the need to embrace standardization when market forces dictate.
On the early days of digital instrumentation:
- “In those days, I have to say that the Fourier Analyzer computer that we used was a minicomputer… I remember that the main product had 16K bytes of memory, so you put that in the context of probably what’s in your wrist watch today, but it was a rack full of equipment at the time.”
- “I used to say to get a Fourier Analyzer you needed $100,000 and a PhD, because the customers that actually used this equipment typically were PhDs.” On HP’s decentralized structure and internal competition:
- “HP had a very decentralized operating model where you have all these divisions… and a culture focused on innovation and leadership and not, probably, a tidy way to rationalize conflicts.”
- “So what we had is a group in Colorado who had been doing these big high-end technical work stations and they’re looking over and they’re saying, wow, this PC business has taken off. I bet we could build a PC. So they launch an effort to do it. And then you have the terminal division… and they said, you know there’s really not that much difference between an intelligent terminal and a PC; we’re going to build one.”
On HP’s struggle to enter the PC market:
- “HP like DEC and Data General were late to the party in the PC market… HP had a very decentralized operating model… and it wasn’t clear who was right or if both of them could coexist and what HP would let that happen.”
- “The software came from Microsoft in those days, right, so it was DOS… But at the same time, HP is a company where innovation is kind of at the core, and we had said well how are we going to differentiate ourselves in a business that’s that standardized?”
On HP’s attempt to differentiate with NewWave:
- “Frankenberg saw this prototype in England that essentially was an object oriented user interface. It’s the way computers look now, and this was 1986… He sort of bet the software farm on this thing called NewWave.”
- “The problem with NewWave was that they were having trouble getting it done… It was a lot of software and it required a lot of hardware, so it was kind of an expensive system solution.”
On HP’s eventual exit from the PC software market:
- “We did make one last attempt… We came up with a product called Dashboard, which was a PC kind of a toolbar… It turned out that product dominated its segment but it was a very small segment.”
- “By the early 1990s, we pretty much made the decision that we have to support our existing customers… but we basically are going to stop any new development in PC software for now.”
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