DEC was the second-largest computer company — then it dismissed the PC as a toy

Digital Equipment Corporation was founded in 1957 by Ken Olsen and Harlan Anderson in Maynard, Massachusetts. DEC pioneered the minicomputer, a smaller, more affordable alternative to the mainframes that dominated computing. Its PDP series, especially the PDP-8 and PDP-11, and later the VAX architecture, made DEC the world's second-largest computer company by the late 1980s, with $14 billion in annual revenue and more than 140,000 employees. The company was a powerhouse of engineering and innovation.

But DEC's leadership failed to see the personal computer revolution coming. In 1977, Ken Olsen famously stated, 'There is no reason for any individual to have a computer in his home.' When DEC finally entered the PC market, it launched three incompatible machines — the DEC Professional, DECmate II, and Rainbow 100 — none of which ran the dominant IBM PC software. The rise of RISC-based workstations from Sun Microsystems and others eroded the VAX market, and by the early 1990s minicomputer sales were in free fall.

DEC launched the technically brilliant Alpha processor in 1992, but it was too late. The company had shrunk to 53,500 employees. On January 26, 1998, Compaq acquired DEC for $9.6 billion, at the time the largest merger in computer industry history. Compaq used the acquisition to enter enterprise services, but struggled with the integration and was itself acquired by Hewlett-Packard in 2002. DEC's technology and people were absorbed into HP, and the company that had defined an era of computing was gone.