The Tragic End of Control Data: The $3.7 Billion Computer Giant That Beat IBM, Then Destroyed Itself

In 1964 Control Data Corporation of Minneapolis shipped the CDC 6600: a cabinet built in the shape of a plus sign, about 12,000 pounds, drawing 30 kilowatts, with Freon circulating inside each arm to carry the heat out. It was the fastest computer on earth for the next five years, and it beat the previous record holder — IBM's 7030 Stretch — by a factor of three. On 28 August 1963 the chief executive of IBM, Thomas Watson Jr., wrote a memo to his own employees. He said the laboratory that built the 6600 had "only 34 people, including the janitor," of whom fourteen were engineers and four were programmers, and that he could not understand how IBM had lost its industry leadership. The Computer History Museum keeps the record of that memo. Control Data went on to top a billion dollars in revenue by 1970, peak at $289 million in earnings in 1981 with nearly 60,000 people worldwide, and hold half the world market in computer peripherals. Then it lost $567 million on $3.7 billion of sales in 1985, and in 1992 it split itself in two to stay out of bankruptcy court. WHAT IS IN THIS FILM July 1957: twelve engineers walk out of Sperry Rand, sell stock to raise $600,000, and rent space in a warehouse Seymour Cray at thirty-one, already called the brightest computer designer in the world, working on pads of quarter-inch graph paper The laboratory in Chippewa Falls, Wisconsin, chosen for a distance calculated so that long-distance telephone charges would discourage most calls from head office The written answer Cray gave when management asked for a one-year and five-year plan 1968: Cybernet, a national network of seven 6600s. In 1971 ARPANET had eighteen identifiable network centres. Cybernet had twenty December 1968: the antitrust suit over an IBM machine that had been announced but did not exist, settled five years later when IBM handed over a subsidiary with about 20,000 customers 1972: Cray leaves over the 8600, and the president he left behind puts $250,000 into Cray Research. Ten years later that company is one of three squeezing Control Data's mainframe business What the business histories actually blame: peripherals falling from 50% of the world market in 1980 to 23% in 1984, and a $130 million write-off when the company walked out of IBM-compatible discs 1992: no investor for a company whose interests ran from mainframes to military software to a lottery business, so it separated into two