Encore Computer

~ the eulogy ~

The last working day of Encore Computer was 8 January 1999, when a sale that had been running on a monthly management fee since the previous June finally closed. I was in secondary school in Turkey and about a year into dial-up, and the machines in this obituary were the kind that ran flight simulators for air forces. Nothing about them was ever going to cross my path. What makes the company worth a stone is the arithmetic at the two ends of it.

Encore started in 1983 in Marlborough, Massachusetts with something close to 50 million dollars, an amount that in 1983 was not how computer companies got started. It bought that kind of money with names. Kenneth Fisher had taken Prime Computer from seven million dollars of revenue to 350 million, and Gordon Bell had been the engineering vice president at Digital responsible for the VAX. The third founder was Henry Burkhardt III, who had co-founded Data General. The plan was to build parallel machines out of commodity processors instead of custom silicon, and the first of them, the Multimax, shipped in September 1985 with up to ten pairs of National Semiconductor NS32032s. It was one of the first commercial machines to use bus snooping to keep many processors honest about shared memory. You could run it under BSD or System V, and Encore maintained a parallel Mach as well, which put it in a very small club.

Then the supply chain turned on them repeatedly. National stopped developing the NS32032 line shortly after the Multimax 500 came out in 1989. Encore moved to the Motorola 88000 and shipped the Encore-91 in late 1991 and the Infinity 90 series from 1994, at which point Motorola abandoned the 88000 for PowerPC. Encore went to the DEC Alpha 21064 for the Infinity R/T in late 1994. Three processor architectures in six years is three complete hardware redesigns, and each one was paid for out of losses.

By the middle of the 1990s the clusters of ordinary machines had arrived and the parallel computing pitch was finished. What Encore still had was a real-time business with genuine customers and a storage products group with technology Sun wanted. It sold both. The bigger piece went in November 1997 and the smaller piece went in January 1999, and when the second one closed there was no company left behind it.

~ the dossier ~

~ the three names on the door ~

None of the founders stayed for the ending. Bell left in the 1980s for the National Science Foundation. Burkhardt left to found Kendall Square Research, which built its own parallel machines and then collapsed in an accounting scandal in 1994, so he managed to be present at two separate deaths in the same market. Fisher stayed longest and spent most of the 1990s raising money from the same source over and over.

~ the japanese money ~

In 1988 Encore bought the computer division that had once been Systems Engineering Laboratories, founded 1961, acquired by Gould in 1980 and swept up when Nippon Mining bought Gould in 1988. SEL machines sat inside military flight simulators, and United States rules on foreign control of defense suppliers meant a Japanese owner could not keep them, so Nippon had to find an American buyer in a hurry and in practice paid Encore to be it. That relationship then became the company's life support. A 50 million dollar revolving loan and 80 million refinanced in 1991, a 150 million dollar recapitalization from Nippon Mining in 1992, 100 million converted from debt to equity in 1994, another recapitalization from Japan Energy in 1995. Between 1989 and 1998 the company lost more than 228 million dollars and stayed open the entire time.

~ two prices ~

On 24 November 1997 Sun Microsystems completed the purchase of the storage products business for 185 million dollars, 150 million in cash at closing and 35 million due the following July, which brought Sun the DataShare software and the intellectual property around it. That was the valuable half.

The other half, the real-time computing business that traced back to SEL, went to Gores Technology Group for three million dollars in cash agreed in March 1998. The arrangement was peculiar: Gores ran the business from 1 June 1998 while the deal sat open, paying Encore 100,000 dollars a month for the privilege, refundable when it closed. Under that management sales rose about twenty percent over six months and the unit started turning a profit, which says something uncomfortable about the years before. It closed on 8 January 1999 and Encore Computer Corporation stopped existing.

~ who sells it now ~

Gores renamed the surviving business Encore Real-Time Computing. In 2002 it went to Compro Computer Services, which is still in the business of keeping SelBUS machines alive for people who bought them decades ago, including a hardware simulator that lets the old software run without the old boards. Some of the equipment covered by those support contracts dates back to 1975.

The Naval Postgraduate School donated a Multimax to the Computer History Museum, where it is in storage. That is the physical remainder of 50 million dollars of 1983 money and the most decorated founding team anybody assembled in minicomputers: one machine in a warehouse, and a support contract business selling emulators to the customers nobody else wanted.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »