Digital Equipment Corp:The Fall of a World Leader in Technology

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Abrams, Eric; Coskun, Beril; Ho, Jonathan; Numanoglu, Nergis; Ozdil, Alper; Robertson, Scott; Sunardi, Andreas; Volz, Craig
Technology and Innovation
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Ken Olsen is a visionary whose entrepreneurial drive created one of the world’s most successful and long-lived computer companies: Digital Electronics Corporation (DEC). Under Olsen, DEC became a worldwide company and technological innovator, creating the minicomputer, network technology, robust operating systems, scaleable systems, and advanced CPU and silicon process technology for the most powerful RISC processors in the world. However, Olsen missed several key market opportunities. Management problems led to lost market share, ineffective organization, and eventually DEC’s selloff of divisions and buyout by Compaq. Why did a leader in the computer industry with world leader technology fail? This paper explores some key management decisions at DEC and how those decisions affected the company. It explores the ‘why’ behind DEC’s failure and draws some lessons learned.