Computer Business Review

ENCORE FOR A FADED SUPERGROUP, OR HOW KEN FISHER BROUGHT HIS DREAM BACK FROM THE BRINK

by CBR Staff Writer| 27 April 1989

Back in the late 1960s and early 1970s, the concept of the supergroup was born, where the leading lights from three or four bands would come together to create a new group Blind Faith springs to mind but the results seldom lived up to expectations, and after one or two albums, the members usually went their separate ways. An exact counterpart occurred in the in the computer industry when Ken Fisher grew tired of running Prime Computer Inc, and after a few months of reflection got together two other leading lights of the industry - father of the minicomputer Dr Gordon Bell, who designed the PDP-11 and the VAX for DEC, and Henry Burkhardt, a luminary from Data General Corp, and formed Encore Computer Corp, announcing that the company would find hightech companies with bright ideas but no marketing muscle or savvy, invest in them and turn them into superstars. The names were good for a phenomenal amount of venture capital, and the total raised on the back of their reputations reached $47m when the company successfully made an initial public offering without a product to its name. Trouble was that each of the founders had slightly different ideas for the company, and strange little bits of technology were bought from all over the place. By 1987, most of this had been sold again, all of the names bar Fisher had departed and he had to reach into his own pocket to the tune of $3m to keep the company afloat. By then it had settled down to building mildly innovative parallel processing Unix machines around a chip that the rest of the industry had given up on, the National Semiconductor NS32000. So Ken Fisher must be feeling relief as much as anything else that in the wake of his acquisition of Gould Computer Systems Inc, he was again news enough that the Wall Street Journal thought him worthy of a personality splash piece. The acquisition, as reported, hikes Encore's sales sixfold - Encore did just $34.4m in the year to October, Gould Computer is thought to have done about $220m last year gives it a presence in Europe, quintuples its sales force to 165 people, and provides world-wide maintenance operations. Nippon Mining Co paid $1,000m for Gould Inc because it wanted its copper foil business, and was so keen to get rid of the computer side that it agreed to give Encore a $140m bridging loan to buy the business, in return getting a stake of about one-third in Encore. But looking at his alma mater Prime Computer Inc, which has so little confidence in its proprietary minis that it has hitched its star to an ECL version of the Intel 80486 and the Sun Mic-rosystems Sparc what does Fisher want with a minisupercomputer firm? After all, the 680X0-based systems from Massachusetts Computer Corp are regarded as the more attractive properties in Concurrent Computer Corp's portfolio, Data General is disengaging from its NovEclipse history and pinning its future on an ECL version of Motorola Inc's 88000 RISC - Unix being the unifying thread that runs through all these developments. 11 straight years of losses Norsk Data A/S is wondering how to reduce its Nord minis to a vestigial part of its business without frightening all its customers away, Ferranti Computer Systems is phasing out its Argus, Bull's DPS 6000s are rapidly being superseded by 68000 family Unix machines, and even ITL Information Technology Plc has seen the writing on the wall and can't move its customers over to Sequoia Unix supermicros soon enough. Only Modular Computer Systems Inc is pinning its future on a new line of minis - albeit ones stuffed with off-the-shelf complex and reduced instruction set microprocessors around a small proprietary core. But ModComp is owned by a West German company, AEG AG, that has a refreshingly realistic attitude towards profits - and lost causes: about the size of Britain's GEC Plc, the company turned in 11 straight years of overall losses up to 1983 before someone decided it really was time to call a halt. But Ken Fisher may well agree with this dismal epitaph for the minicomputer - if it doesn't run VMS and it isn't called NonStop, it's d

ead (and even DEC and Tandem Computers are both carefully hedging their bets by Diversifying with machines based on off-the-shelf RISCs from MIPS Computer Systems Inc. He told the Journal that Gould's San Diego-based mini-supercomputer operation was late to market and has probably been passed by, and analysts expect him to close it down promptly and try to persuade Gould's customers to switch to Encore's MultiMax systems, treating the acquisition simply as a vast new sales and service operation for Encore's Multimax machines.

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