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Product Details
| ISBN-13: | 9780994031075 |
|---|---|
| Publisher: | Variant Press |
| Publication date: | 06/21/2019 |
| Series: | Commodore |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 548 |
| File size: | 8 MB |
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CHAPTER 1
New Management 1984
Prologue: Friday 13th
By 1984, Commodore the computer company had achieved remarkable success while its competition — Atari, Tandy, Texas Instruments and even Apple — were floundering. On January 13, 1984, Commodore's board of directors, led by financier Irving Gould, decided to fire the man who had made that success happen: Jack Tramiel, founder and president. When Commodore lost Tramiel, it lost the passionate, ruthless engine that drove the company forward. "Jack was the whole personality of the company. There was nobody else," says Commodore engineer Robert Russell. Even though Tramiel treated many of his employees harshly, they were ready to follow him.
Commodore was searching for the next great product to compete against what it saw as the biggest threat at the time, the IBM PC. Unknown to them, a third foe would rise who was capable of obliterating Commodore, gutting the company from within. Commodore needed strong leadership to carry the company's momentum forward.
Marshall Smith
The timing of Jack Tramiel's resignation was a surprise to everyone, including Irving Gould, and he needed an acting CEO very quickly. Gould wanted stable management and turned to friend and former industrial CEO, Marshall Smith. A week later, Smith was voted in.
According to Gould, Smith "enjoys an excellent reputation as an executive in the area of manufacturing, finance and marketing and is known for his leadership skills in motivating and developing the people who workfor him."
"There's a lot of insanity at Commodore," says engineer David Baraff. "I mean they got rid of Jack and they brought in a guy who had no experience in retail or high-tech at all. You couldn't have found a poorer match."
According to Robert Russell, "Once you saw somebody like Marshall Smith, you were like, 'You've got to be kidding me.'" Smith was previously president of Indian Head Incorporated, a Charlotte, North Carolina company specializing in brakes for the trucking industry. In 1974 the company was acquired by a Netherlands company, Thyssen-Bornemisza N.V., in order to establish a North American presence. Indian Head was renamed Thyssen-Bornemisza Incorporated and Smith became its CEO.
Gould wanted to expand Commodore. He did not want the lean, perennially understaffed company of the past, and did not want to personally approve every expenditure over $1000 — unlike Tramiel. "Commodore at that time was ballooning with all these guys being brought down from Northern Telecom [Nortel] up in Canada, like Martin Schabelski," says Russell. "They were big-company guys building empires."
Many of Commodore's top managers had come from Bell Northern Research (a research arm of Northern Telecom), including VP of Technology, Adam Chowaniec and his boss Lloyd Taylor, who was responsible for finding new technology and acquisitions for Commodore. "At that time, a vice president from the research division by the name of Lloyd Taylor had gone down to Commodore to work with Jack Tramiel," explains Baraff. "Lloyd was a technology guy with a semiconductor background and Commodore needed inexpensive computer chips to be cost effective."
Former marketing head Kit Spencer believes the new hires were a key mistake. "Commodore just brought in people from the traditional computer business who weren't in the microcomputer business and they didn't really understand the business they were coming into," he says.
Engineer Yash Terakura was perturbed by the changes he saw happening in Commodore. " They wanted to be IBM," he says. "They got too big and it became very bureaucratic."
Software developer Neil Harris found the new Commodore less driven than under Tramiel. "After he left, at one point I said to my boss, 'I don't really have that much to work on right now.' And he said, ' Just keep your head down and look busy and that will be fine.' In all the years of working for this company, I never had to look busy."
The Unix Business Computer
Commodore was still basking in the success of the C64 and VIC-20 in 1984. However, the company did not remain complacent and was about to release a followup computer that was intended to be even cheaper than the C64. Called the Plus/4, it frustratingly ended up as a more expensive computer than the C64 with worse technical specs.
Commodore also had the aging PET line of business computers, which had been a bonafide hit in the European business community for a few years. With the IBM PC beginning to take away business market share, Commodore's VP of product development, Lloyd "Red" Taylor, began looking for a worthy successor.
His search for a business machine led him to consider releasing a Unix-based computer. Unix was a well regarded operating system that was popular in universities and research, not to mention among programmers and developers. It had yet to gain a foothold in the business world, however, but it was still early days. Perhaps it had a shot at competing against MS-DOS.
Commodore began developing a UNIX machine to replace the PET computers sometime in 1983. Frank Hughes, the engineer in charge of Commodore's cash register products, became the project leader of the machine with engineer Shiraz Shivji designing the motherboard.
According to Robert Russell, much of the design came together in discussions with Shivji. "Shiraz and I were doing lunch all the time, working on what we wanted to do for the next generation computer," reveals Russell.
The logical chip choice for many computer makers was the 16-bit Motorola 68000, which would end up being famously used in the Amiga and Macintosh. However, at Commodore, this was unthinkable due to an ongoing lawsuit with the chipmaker. "We were still butting heads with Motorola, so Motorola wasn't really an option," says Russell.
Instead, the PET successor (later called the C900) would use a 16bit Z8000 chip from semiconductor maker ZiLOG. Commodore, under Jack Tramiel, began talks with ZiLOG to acquire the entire company.
Engineers dubbed it the Z-machine because of the Z8000 chip. Bil Herd loved to tease the Unix group by calling them Z-people. The engineers soon raised the naming stakes to absurd heights and began calling the pens they used Z-pens and the food they ate Z-meals. "They were kind of treated as second rate citizens unfortunately," says Herd.
According to Russell, the deal to acquire ZiLOG fell through. "I remember being in meetings with the top management of ZiLOG while the Commodore guys were negotiating," he recalls. "I think it must have been an issue about price."
According to Byte magazine, Commodore acquired a license to manufacture the Z8000 instead. "We were trying to leverage MOS Technology chips," says Russell. "The goal was to do vertical integration. They let me keep the project because they basically negotiated parts at cost for us to continue on with the technology."
The engineers even attempted to create an entertainment system out of the Z-Machine. "At one time we were going to do a gaming version of the Z8000 with the memory mapping chip and everything," recalls Russell. "Once we put it together as a prototype and we were running BASIC on it, it was kind of like, 'This isn't a gaming machine! It's not interesting because there's no way to make it compatible. What the hell is this but just a super fast thing that looks like a Commodore 64.'"
As Commodore expanded during this time, engineers like Russell and Shivji found it difficult to do their jobs. "The engineers that I hired were guys like me who thought, 'This is bullshit.' Guys like Shiraz that were like, 'We're here to do things, we're not here to go fight in meetings and sit across the desk from Martin Schabelski and Joe Krasucki, and argue to try to get things done the right way."
Shivji designed the system using a Z8000 chip running at 10 MHz. The system contained a reasonable 256 kilobytes of memory, expandable up to 2 megabytes, and two 1.2 megabyte floppy drives. Shivji completed his prototype motherboard for the Unix system and was able to bring up the system in time for a showing at the upcoming Hanover Fair.
Testing the Waters
In January 1983, Compaq pioneered a new industry by releasing an IBM PC clone. The move was legal because the IBM PC used widely available parts with no custom semiconductor chips. The BIOS code (Basic Input/Output System) was the only copyrighted part of the IBM PC, so Compaq had its programmers legally reverse-engineer the code.
By early 1984, the IBM PC was seen as an open standard for business computers. With Commodore's PET computers now obsolete, and the Unix machine at least a year away, Commodore Europe needed something to sell its business customers quickly. Commodore's VP of product development, Lloyd Taylor, decided to join the enemy and test the waters with IBM PC clones.
Rather than attempting to design a PC from scratch, Taylor found a Canadian competitor to Compaq that produced a luggable clone called the Hyperion. "We went and bought the design for a luggable PC compatible from Canada called the Bytec-Hyperion," recalls Nicholas Lefevre, Commodore's legal counsel. "We went and cut a deal and got all that technology to hedge our bets if we wanted to be in the PC compatible space."
Lloyd Taylor concluded that Commodore could have an advantage over other clone makers, such as Compaq, if it could manufacture its own Intel 8088 chips. The list price of the 8088 was originally $124.80 when first released and in-house production could result in significant savings. Taylor went to Intel and successfully negotiated a license to become a second source for the Intel 8088, a first for any company before or since. When news of the deal leaked, an industry analyst from the Gartner Group predicted, "Commodore could conceivably become the major supplier of low-cost PC-compatibles, while other companies may be forced to merge or go out of business."
The other factor in Commodore's favor was that IBM was struggling to gain a foothold in Europe. According to PC Magazine, "Unlike Commodore, IBM has had difficulties in marketing its PC overseas." IBM had flubbed the release, without special German characters and with poor documentation, making it unsuitable for business use. This left IBM with sluggish sales and in 1984 it was forced to drop prices by 20% in order to reduce-inventory.
Given that Commodore held a vastly superior position to IBM in the European market, it was clear that the time to strike was now, rather than waiting for the upcoming C900 Unix system.
First, Commodore needed to secure one important part of the PC clone. "Of course we needed for the Bytec machine an MS-DOS license if we're going to be able to sell a PC compatible," explains Lefevre.
Unfortunately, the prior year, Jack Tramiel had launched a $24 million antitrust lawsuit against Microsoft. This happened because at the 1983 Summer CES Sig Hartmann, Commodore's VP of software, had announced Commodore would sell Multiplan for $99 even before Microsoft had signed the deal. Bill Gates had immediately responded the next day that he would not allow any vendor to sell Multiplan for $99 and cancelled the deal.
Gates was soon reminded that, according to the Sherman Antitrust Act, a manufacturer is not allowed to set prices for its vendors. Jack Tramiel responded by levelling the aforementioned antitrust lawsuit against Microsoft — perhaps not the best way to continue a working partnership.
Back to early 1984, Nicholas Lefevre attempted to acquire an MSDOS license from Microsoft. He says, "In the meantime of course Steve Ballmer, who is responsible for the OEM deal, is telling me, 'The MS-DOS deal for the Bytec? Someday we'll talk about it.'"
Lefevre approached Bill Gates again at the February 21 Softcon in New Orleans. "I got Bill and he said, 'Okay let's talk. You should talk with my friend Jon Shirley.' He was the new president of Microsoft," says Lefevre.
Lefevre tracked down Microsoft's president and they went into a smoke-filled room. "I met with Jon Shirley and started working out a deal," says Lefevre. "And the idea I say is, 'We'll drop the Multiplan lawsuit if you give us MS-DOS for the Bytec.'"
The two continued working out the details when there was a knock at the door. It was at that moment Lefevre learned of the loathing Microsoft felt towards Commodore. "I open the door and there's Bill Gates," recalls Lefevre. "He asks, 'What's going on here?' Jon says, 'We're trying to work out something on getting rid of the lawsuit in exchange for MS-DOS.' And Bill goes into one of his fits of anger and curses Jack and everything with the Tramiels. 'I will never deal with them. We're not even going to talk about MS-DOS until you dismiss the lawsuit and then we'll talk about terms for that.'"
Commodore dismissed the lawsuit and, as a result, secured MS-DOS for its clones. But it was clear the company would not be able to win the support of one of the most powerful software makers in the industry. One that, in 1983 at least, had been willing to make software for the world's most popular computer.
In March 1984, Lloyd Taylor and Nicholas Lefevre negotiated the license from the makers of the Hyperion luggable, Bytec-Comterm, to rebrand the computer and sell it as a Commodore product. The same month, Bytec-Comterm shipped Commodore dozens of Hyperion kits for assembly and the latter began studying them for cost reductions.
Commodore debuted the Hyperion April 4 at the massive Hanover Fair in Germany. And, perhaps sending a mixed message, Commodore privately debuted the C900 behind closed doors to select people. The system was obviously in the early alpha stage and lacked a working Unix operating system, although Commodore mentioned it planned to use a version of Unix called Coherent.
At the same show, IBM attended with a massive booth manned by 500 employees. The industry giant was sending a clear message that it would do whatever it took to enter the European business market. The race was on.
Tramel Technology Limited
Earlier in the year, as the drama at Commodore played out that resulted in Jack Tramiel being dismissed from Commodore, its chief rival Atari was keeping close watch. As emails exchanged among Atari employees attest to, the view of Tramiel was not flattering. When an Atari engineer named Dave Sovey was informed of the surprise resignation, he replied, "I wonder what industry he is going to ruin next?"
The two Atari employees had no idea Tramiel would soon be their boss. After his dismissal from Commodore, Tramiel and his wife began a yearlong trip around the world, a lifelong dream for both of them. However, the trip was cut short in April 1984 when Tramiel received a phone call from Steve Ross, the CEO of Warner Communications. Ross had tracked down Tramiel through his youngest son, Gary.
By 1984, Atari was hemorrhaging money and the parent company Warner wanted to be rid of it. But Ross had a reason for calling Tramiel above all other people: Atari had competed head to head against Tramiel while he ran Commodore, and knew what an aggressive leader he was. Though Ross wanted to sell off Atari, he also wanted Warner to receive shares in the newly spun-off company. Ross believed if anyone could rescue Atari, and raise the stock price, it was Jack Tramiel.
Tramiel, along with his son Sam, returned to California and met with Ross and executives of Warner Communications. When talks of an acquisition became serious, Tramiel opened up an office at 455 South Mathilda Avenue in Sunnyvale, five minutes from Atari. He called his new venture Tramel Technology Limited (TTL, which coincidentally is also an acronym for Transistor-Transistor Logic). According to Leonard Tramiel, "Our name Tramiel was constantly being mispronounced as Tra-meal and my dad hoped that the other spelling would get people to say Tra-mell. It didn't work."
After their initial meeting, Tramiel and his sons negotiated throughout the next few months with Warner Communications in New York for the ownership of Atari. The Tramiels had to convince Warner that a deal with them was in its best interest. For starters, Tramel Technology offered to take over all debts and obligations, something that would give Warner Communications a big sigh of relief. Warner would also retain shares in Atari, which it could sell or hold depending on how the company fared after Tramiel took over.
Finally, Tramiel had to convince Warner that he would be the guy to turn Atari around, making Warner's shares in Atari potentially valuable.
The same month, Tramiel began scouring Silicon Valley, searching for development firms with technology to create a C64 killer. On the advice of Commodore executive Lloyd ' Red' Taylor, he eventually made his way to a small start-up with a computer they called the Amiga.
Earthquakes
A Silicon Valley upstart known as Amiga had successfully created a multimedia home computer whose chip technology surpassed that of the competition. But the company's future was on shaky ground, both figuratively and literally. On April 24, 1984 at 1:15 pm, the Morgan Hill earthquake hit California. "That was so remarkable for me because it was my first earthquake ever in my life," recalls Amigas employee RJ Mical. "You could tell the difference between someone from California and someone not from California because all of my coworkers, who knew better, dove under their desks, dove into the doorways, and got themselves into protective positions."
(Continues…)
Excerpted from "Commodore The Amiga Years"
by .
Copyright © 2017 Variant Press.
Excerpted by permission of Variant Press.
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Table of Contents
Acknowledgments,
Table of Contents,
Introduction,
Chapter 1 - New Management,
Chapter 2 - Proto Laptop,
Chapter 3 - Unix Machine,
Chapter 4 - Hi-Toro,
Chapter 5 - Amiga,
Chapter 6 - Crash,
Chapter 7 - Chip Boards,
Chapter 8 - Dancing Fools,
Chapter 9 - Help!,
Chapter 10 - Boing!,
Chapter 11 - Changing Sides,
Chapter 12 - The Acquisition,
Images 1 of 2,
Chapter 13 - A True Sequel,
Chapter 14 - Commodore-Amiga,
Chapter 15 - Animal House,
Chapter 16 - Finishing What You Started,
Chapter 17 - Pepsi Challenge,
Chapter 18 - Launching the C128,
Chapter 19 - The Debut,
Chapter 20 - Running on Empty,
Chapter 21 - Releasing the Amiga,
Chapter 22 - The Next Amigas,
Images 2 of 2,
Chapter 23 - Resurrecting 8-Bit,
Chapter 24 - Turning it Around,
Chapter 25 - Saving the Amiga,
Chapter 26 - Amiga Invades Europe,
Chapter 27 - Plotting a New Course,
Chapter 28 - Every Man's Macintosh,
Chapter 29 - Cutting to the Bone,
Chapter 30 - Building a B52,
Chapter 31 - Rebound,
Chapter 32 - Two Amigas,
Chapter 33 - From Hero to Zero,
Chapter 34 - C64 Lives!,
Chapter 35 - Adios Amigos,
Chapter 36 - Dark Echo,
Thanks,