The EDA360 vision document divides the world of electronic design into Silicon, SoC, and System Realization. It’s a product-oriented view and it has pushed all EDA vendors to embrace what designers always knew: product design is hard from the chip to the system and product development or Realization teams need all the assist they can get from the EDA vendors. There’s a meta-level story however that’s not in the EDA360 document. That story is about building dynasties. We know about dynasties in the electronics industry. We think about them all the time. Intel’s processor franchise is a dynasty that stretches back to the 1970s. Apple’s iPod is an end-product dynasty. In fact, Apple’s very good at realizing dynasties that now include the Macintosh computers, the iPod, the iPhone, and the iPad.
Dynasty Realization (a phrase I’ve just coined for this blog post) is usually only documented in business case studies. Such case studies are long on the business aspects and usually pretty short on the technical aspects, due to the nature of the authors. I’ve just spent two hours reading a different sort of case study, written by a friend named Chuck House. House is Chancellor of Cogswell College in Silicon Valley and he once worked for Intel but before that, he worked at Hewlett-Packard. Bill and Dave’s Hewlett-Packard. House has written a 45-page treatise on the invention of an entire HP division, the one that made logic analyzers and microprocessor development systems. It’s a really interesting story because it clearly demonstrates the seemingly random walk that leads to the creation of a dynasty.
The study starts with a very unusual situation. House and his fellow “HPite” (official HP nomenclature) Kent Hardage are standing in the Tektronix booth at the IEEE International Convention in New York City on March 23, 1970. They are conducting what’s supposed to be a covert operation to gather intelligence about the new Tektronix 7000 series mainframe oscilloscopes because House is running a development program called “Next Gen” (I wonder how many hundreds of projects have had that name) for HP’s Colorado Springs Division. That’s the division with the very unhappy task of trying to beat Tektronix at the ‘scope game.
The Next Gen project’s goal is to create an oscilloscope mainframe even better than the Tektronix 7000 series, so House has gone to NYC to find out more about the new Tektronix product family. Something amazing happens. House writes:
“… it took the Tektronix team less than three minutes to figure out who we were, what we were doing, and thus to develop a coping strategy. Oddly, they let us in. We knew the functionality better than most folk in their booth; surprisingly, we were invited to stay and exhibit their new ‘scope to potential customers.”
Now you might think that it was a supreme betrayal for House and Hardage to demo the Tek 7000 series ‘scope mainframe to prospects. Seems like it might have been, but it wasn’t. During the hours of demoing the Tek 7000 ‘scope to prospects, House learned what the prospects’ true problems related to ‘scopes were. These problems had nothing to do with the combined ‘scope and frequency analyzer that House’s team envisioned for the Next Gen project. Instead, the problems revolved around those newfangled integrated circuits—especially the digital ones—that wiggled so many signals simultaneously. Even a 4-channel scope was insufficient to troubleshoot such circuits. A different sort of test equipment was needed.
House’s foray into enemy territory—literally living in a competitor’s shoes for a few hours—put a stake into the heart of his Next Gen project. House learned that Tektronix had spent $34 million and seven years developing the Tektronix 7000 series. House’s team had spent $2 million and was at least two years away from a product. Dead end. Game over.
House’s narrative goes on to describe the initial, stumbling steps that his greatly reduced and restructured team made to envision what that next step after the current generation of HP scopes should be. It was a logic analyzer—something no one knew how to define or build. House’s 45-page document then explains in great detail how the first three generations of HP logic-analysis equipment was defined and built before it became truly usable and practical. Eventually, HP and its test-equipment spinout Agilent sold $5 billion worth of logic-analysis equipment. All because of a few hours spent on some spontaneous and opportunistic market research.
House’s story is one of Dynasty Realization. Creating a $5 billion dynasty isn’t a bad bit of work.
If you’d like to read more about this fascinating case study, you’ll find it on the HPmemory.org Web site. Click here.