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Splendid Isolation: Sierra at Mid-Decade

Some Sierra products of the latter 1980s

The hardest day that Ken Williams ever spent at the helm of Sierra On-Line was one in April of 1984. That was the day that, with cartridges full of the simple action games the venture capitalists had urged him to produce piling up in warehouses following the Great Videogame Crash and with red ink spilling everywhere, he was forced to let two-thirds of his employees go. In ten hours or so Sierra shrank from a company of 120 employees to one of 40. Always one to look another straight in the eye and tell it like it was — a quality that earned for him fantastic loyalty and even love amongst his charges — Ken sat in his office all day delivering the shattering news himself to shocked visage after shocked visage. He went home determined never to have another day like that again, never again to let the advice of others lead him to ruin. Love them or hate them for the strong opinions that their leader was never reluctant to express, no one would ever again be able to call Sierra a follower.

The most important lesson Ken took away from Sierra’s near-death experience was to be very choosy about what platforms he chose to support in the future. He had, for instance, decided that he had no use whatsoever for game consoles of any kind. He would never waver from this position, not even when new household names like Nintendo and Sega would convince many of his similarly vociferous console-hating peers to reconsider. For Ken the consoles that had nearly become the death of his company would always reek of snake oil and volatility, the computers that had birthed it of stability and sanity. Admittedly, at the time that Ken came to this conclusion it hardly stood out like it would in later years. In 1984, believing the time of the consoles to be done forever and foreseeing world domination on the horizon for home computers was very much the conventional wisdom. But the other major platform lesson that Ken had learned, or thought he’d learned, ran just as deep in his psyche but in a far more contrary direction: he had decided that not only the consoles but also the cheap home computers that were supposed to replace them were on the way out.

When one talked about a “cheap home computer” in the United States in 1984 one was almost invariably talking about the Commodore 64, which had just enjoyed an absolutely massive Christmas that made it the premier gaming platform in the country by a mile, a position it would hold firmly for another three or four years. Even when it became clear that the home-computer revolution at large was sputtering, the 64 remained the rock that sustained most of Sierra’s competitors. And yet already in 1984, when the 64 was just coming into its own, Ken Williams was making and following through on a decision to abandon it. A few more 64 titles would trickle out of Sierra over the next year or so, projects that had been in the works before the Crash or porting offers from third parties cheap enough to be worthy of a shrugged assent, but by and large Sierra was done with the Commodore 64 just when the rest of the industry was really waking up to it.

Ken’s loathing for the 64, which he dismissed as a “toy computer,” and its parent company, upon which he tended to bestow still choicer epithets, was visceral and intense. Commodore, just as much or more than Atari and Coleco, had loomed large over Sierra’s ill-fated foray into cartridge games. Many of the cartridges piled up in warehouses, threatening to smother Sierra under their storage costs alone, were for the 64’s older but weaker sibling, the VIC-20. Commodore had all but killed the VIC-20 software market overnight in 1983 when they’d unexpectedly slashed the price of the 64 so far that it didn’t make sense for computing families not to replace their old models with the shiny new one. In killing one of their own platforms without giving even an inkling of their plans for doing so, they’d left Sierra and many other publishers like them high and dry. Now it was 1984, Jack Tramiel was gone, and Commodore’s new management was claiming to be different. To at least some extent they really were earnestly trying to turn Commodore into a different sort of company, but it was all too little too late for Ken. He was done with fly-by-night operations like theirs. He believed that Sierra could hope to find truly safe harbor in only one place: inside the comfortingly bland beige world of IBM.

Sierra’s embrace of IBM might read as shocking, given that their own culture seemed the very antithesis of the crewcut-sporting, dark-suit-clad, company-theme-song-singing world of Big Blue. It’s certainly true that a big part of Sierra’s corporate personality was born from the last embers of the counterculture fire of the 1960s, which had managed to smolder for longer in California than just about anywhere else. Their hippie outlook was reflected not just in the image they preferred to project to the world, of a sort of artists commune tucked away in the bucolic wilderness near Yosemite, but also in a certain hedonistic spirit in which just about everyone, especially in the early days, indulged at least a little bit.

Yet there were also other, more conservative currents at work inside Ken and thus also inside Sierra. Ken had spent much of the 1970s as a jobbing programmer working not on the likes of the DEC PDP-10s, where creativity ran wild and so much hacker culture had been born, but on the machines that the industry referred to as the Big Iron: the huge, unsexy mainframes, all clattering punched cards and whirling reel-to-reel tapes and nerve-jarring industrial printers, that already by then underpinned much of the country’s industrial and financial infrastructure. This was the domain of IBM and the many smaller companies that orbited around it. Most hackers looked upon the mainframes with contempt, seeing only a hive mind of worker drones carrying out dull if necessary tasks in unimaginative ways. But Ken, especially after being dumped into the chaos that was the early PC market upon founding Sierra, saw stability and maturity there. Whatever else you could say about those machines, you knew they were going to be there next year and the year after and even the year after that. And you knew as well that, while IBM might move slowly and with infuriating deliberation, they were as close a thing to an irresistible force that the world of business had ever seen once set in motion. One bet against Big Blue only at one’s peril. And IBM was eminently predictable, a blessed trait in an emerging industry like the PC market. They were unlikely to suddenly undercut and destroy one of their platforms without giving all of their partners plenty of warning first. In short, IBM represented for Ken a legitimacy that the likes of Commodore and Atari and even Apple could never hope to match.

Adding to this was the fact that Sierra had had a surprisingly long and close relationship with IBM already, one that by all accounts had engendered a certain mutual trust and respect. IBM had first approached Sierra — not the other way around — in early 1981, just a few months after Ken and Roberta and brother John had packed up and moved out to Oakhurst to start their new company/artists commune in earnest. IBM was soon to introduce their first PC, to be known simply as the “IBM PC,” and they wanted Sierra to port a few of their Apple II hits — most notably their landmark illustrated adventure game The Wizard and the Princess — to their new platform in time for its launch. This Sierra did, thus beginning a steady and often fruitful relationship. IBM again came to Sierra for games and other software for their new home-oriented machine, the PCjr, in 1983. The PCjr turned into a flop, but not before IBM funded the development of Sierra’s revolutionary new AGI platform for making animated adventure games as well as the first game written with it, King’s Quest.

Thanks to its open, scrupulously documented hardware design and a third-party operating system that Microsoft was all too happy to sell to anyone who asked for a license, by 1984 clones of IBM’s PC architecture were sprouting up everywhere, just as they had in the mainframe industry in earlier decades. The IBM PC was fast leaving the nest, becoming a well-established hardware and software standard that could survive and develop independently of its parent, a unique phenomenon in the young industry. With so much of corporate America already wedded to that standard, Ken judged that it couldn’t die. More boldly, he also judged that sooner or later it would become the standard everywhere, not only in business but also in the home. The industry would need to settle on one platform across the board someday soon as software continued to grow more complex and porting it to half a dozen or more machines thus ever more costly. No platform was so well-positioned to become that standard as the IBM PC. In anticipation of that day, the IBM PC must be Sierra’s first priority from now on. Second priority would be given to the Apple II line, for which they still retained a lot of knowledge and affection even as the confused messaging coming out of Apple following the launch of the new Macintosh made them less bullish on it than they had been a year or two earlier. Everything else would be ignored or, at best, given much lower priority.

The decision managed to be simultaneously short-sighted and prescient. For many years to come Ken and his colleagues would look forward to every successive Christmas with no small sense of schadenfreude, certain that this simply must be the year that the idiosyncratic also-rans faded away at last and IBM’s architecture took over homes as it already had businesses. For quite some years they were disappointed. Commodore, after very nearly going under in early 1986, got a second wind and just kept on selling Ken’s hated 64s in absurd quantities. And yet more incompatible platforms appeared, like the Atari ST and Commodore’s new Amiga. Sierra somewhat begrudgingly ported their AGI interpreter to both, but, because the games took no advantage of these new machines’ much more advanced audiovisual capabilities, they weren’t generally well received there. For some it seemed that Ken was leaving millions on the table out of sheer stubbornness. Restless investors talked pointedly about “chasing pennies” in the clone market when dollars were ripe for the taking.

Yet in the end, if admittedly in a much later end than Ken had ever predicted, the IBM/Microsoft architecture did win out for exactly the reasons that Ken had said it must: not perhaps the most sexy or elegant on the block, it was nevertheless practical, reliable, stable, and open (or at least open enough). When the big break came, Sierra would be well-positioned with titles that supported the new sound cards, graphics cards, and CD-ROM drives that were making these heretofore dull machines enticing for homes at last, well-positioned to take a spot at the forefront of mainstream computer entertainment.

But that’s a story for later articles. What we’re interested in now is this interim period when Sierra, whilst waiting less than patiently for the clones’ breakthrough, found ways of sustaining themselves in markets ignored by just about everyone else. While the rest chased Commodore 64 owners, Sierra existed in splendid isolation in their own parallel universe. Happy as they were to sell their software through all of the usual gaming channels, far more was sold through shops dealing in IBMs and IBM-compatibles who mostly catered to business customers — but, hey, even businesspeople like to have fun sometimes. “It’s like we were dealing with a distribution channel that our competitors failed to even see was out there,” says John Williams. Still more important, the real key to their survival during these oft-lean years, was yet another alternate channel that even fewer others bothered to explore: Radio Shack.

Tandy 1000

Like the clones that were also so important to Sierra, Radio Shack wasn’t the most exciting retailer in the world. In compensation they were, like IBM, stable and reliable, a quality that endeared them enormously to Ken. In fact, they were after his own heart in more ways than one. In late 1984, when Sierra was still teetering on the razor’s edge of bankruptcy, Radio Shack made a concerted and very clever attempt to succeed where IBM themselves had failed at making a PC clone that people would actually want to buy for the home. The Tandy 1000 was in some ways an outright PCjr copycat, incorporating its 16-color graphics capabilities and its three-voice sound synthesizer. Tandy, however, ditched the PCjr’s horrid keyboard, added a menu-driven shell on top of MS-DOS (“DeskMate”) to make it easier to use, and in general made a proper computer out of it, as expandable as any other clone and without all of the artificial constraints and bottlenecks that IBM had built into the PCjr to keep it from competing with their “big” machines. At about $1200 it was still much pricier than the likes of the Commodore 64, but it was also much more capable in most ways, able to handle typical productivity tasks with ease thanks to its 80-column display and its compatibility with the huge ecosystem of MS-DOS software. It was a very compelling product for a family looking for a somewhat serious computer that could also play games in reasonable style and that wouldn’t completely break the bank. A hit for Radio Shack, it became nothing less than Sierra’s savior.

To understand how that could be, you have to understand two things about Radio Shack. The first is that, while Radio Shack did sell some third-party software, their selection of same was far from overwhelming. What with Radio Shack not selling the more popular gaming machines like the Commodore 64 and being far from aggressive about seeking out software for their shelves, most publishers never really thought about them at all, or if they did concluded it just wasn’t worth the effort. The second salient point is that Radio Shack customers, especially those who splashed out on a big-ticket item like a computer system, were astonishingly loyal. Radio Shack was the dominant retailer in the rural United States, and even more so in the oft-forgotten markets of Canada and Australia. As John Williams once put it to me, “Every town in Canada and Australia had a Radio Shack, even if the only other retailer was a small grocery store.” Many a Radio Shack customer had literally no other option for buying software within fifty or even a hundred miles. Even those customers who lived a bit closer to the center of things often never seemed to realize that they didn’t have to buy software for their new Tandy 1000s from the meager selection on their local franchises’ shelves, that Babbage’s and Software, Etc. and ComputerLand and plenty of others had a much greater selection that would also work perfectly well. Whatever the reason, people who liked their local Radio Shack seemed to really like their local Radio Shack.

This combination of little competition on Radio Shack’s shelves and a captive audience to buy from them spelled gold for Sierra, who established a relationship with Radio Shack and made them a priority in exactly the way that virtually no one else in the industry was doing. Ken struck up a warm relationship early on with Radio Shack’s senior software buyer, a fellow named Srini Vasan, that went beyond that of mere business acquaintances to become a genuine friendship. The two came to trust and rely on each other to a considerable degree. Ken would call Srini before initiating a new project to see if it would “fit” with Radio Shack, and Srini in turn was occasionally willing to take a chance on something outside the partners’ usual bill of fare if Ken really thought it could become a winner. Srini also made sure that Sierra got pride of place in store displays and in the catalogs that Radio Shack shipped to all and sundry. By 1986 no less than one-third of Sierra’s revenue was coming through Radio Shack — the difference and then some between bankruptcy and a modestly profitable bottom line. Radio Shack proved such a cash cow that Sierra even violated Ken’s usual sense of platform priorities at Srini’s prompting to port some of their adventure games as well as other products to one of the Tandy marquee’s lower-end IBM-incompatible models, the Color Computer, where they were by all indications also quite successful.

Selling to the typical Radio Shack customer — rural, conservative, often religious — meant that the software Sierra moved through that pipeline had to be noncontroversial in every way, even more plainly G-rated than was the norm for the industry at large. So too the corporate image they projected in selling it. In this as in so much else Roberta Williams was a godsend. Just a few years on from posing as a topless swinger in a hot tub for the cover of Softporn, she was now an all-American Great Mom, the perfect ambassador to the Radio Shack demographic. Sierra took to featuring her picture — looking always friendly and wholesome and pretty — on the back of all her games, over a caption declaring that “her games have sold more copies than any other woman in computer software history” (a bit of tortured diction that did prove that their copywriting skills still weren’t quite on par with their abstract promotional instincts).

The products they were peddling through Radio Shack and elsewhere can be largely broken down into three categories: one well-remembered today, one only more vaguely recalled, and one virtually forgotten. Those that everyone remembers are of course the AGI-driven graphic adventures, which began with the first three of Roberta Williams’s long-running King’s Quest series, released in quick succession just a year apart from one another, and then gradually opened up as resources became less straitened to include alternative series like Space Quest. Paralleling these releases, and sometimes running under the same AGI engine, was a line of educational software that often used the classic Disney stable of characters. There was some conflation of these two product lines, particularly in the case of King’s Quest, which was often marketed as a family-friendly, vaguely educational adventure series suitable for the younger set and, again, perfect for the typical Radio Shack family. Finally came the forgotten products that were actually quite a useful moneyspinner in their day: Sierra’s line of home-oriented productivity software that had their HomeWord word processor and their Smart Money personal-finance package as its star attractions.

The Disney partnership fit well with the general image Sierra was projecting. After all, what could be more Middle American than Disney? That said, it’s very much a sign of the times that the deal was ever made at all. Sierra was just barely scraping by from week to week, hardly a huge media company’s ideal choice to become a major partner. But then the stock of Disney themselves was at the lowest ebb of its history, in the middle of a long trough between the death or retirement of Uncle Walt’s original Nine Old Men and the critical and commercial revival that was 1989’s The Little Mermaid. As if that wasn’t bad enough, Disney was also trying to fend off an ugly hostile-takeover bid from the predatory financier Saul Steinberg. Sierra actually bought the Disney license, with Disney’s tacit approval, from Texas Instruments, whose bid for world domination in home computers had been thoroughly cut off at the knees during 1983 by Jack Tramiel’s Commodore. Buying the preexisting contract from Texas Instruments allowed Sierra to dodge Disney’s usual huge upfront licensing fee, which they couldn’t possibly have paid. Nevertheless, Sierra paid dearly for the license on the back end via exorbitant royalties. Even at their lowest ebb Disney had a way of making sure that no one got rich off of Disney but Disney.

While Roberta Williams worked on the Disney products on and off when not busy with her King’s Quest games, Sierra’s principal Disney point man was a former musician, musical director, and music teacher with a ready laugh and a great gift for gab. His name was Al Lowe, and Ken Williams had already fired him once.

Lowe had first come to Sierra’s attention via a couple of self-published educational titles that he’d written on his Apple II using BASIC and Penguin Software’s ubiquitous Graphics Magician. Ken was so impressed by them that he took over the publishing of both, and also hired Al himself as a designer and programmer. Al learned assembly language at Ken’s insistence and wrote a children’s adventure game in it called Troll’s Tale, only to be fired after less than a year in the great purge of April 1984. But then, as a dejected Al was about to leave his office, Ken threw him a lifeline. As remembered by Al himself:

“I want you to work as an outside contractor. You write games, and I’ll pay you advances against future royalties instead of a salary. For accounting purposes, if you’re a salaried employee you’re an expense, but if I’m paying you advances against future royalties you’re a prepaid asset. It’ll make the books look better.”

In time Al Lowe would become more important to Sierra’s commercial fortunes and public image than any other member of their creative staff short of Roberta Williams.

Like so much Sierra software, this copy of Mickey’s Space Adventure was sold through Radio Shack. Note the sticker at bottom left advertising Tandy 1000 compatibility.

But first there was Disney, who became a notable pain in the ass for him and everyone else who had to deal with them. Disney has always been known amongst their licensees as control freaks, but in this case they were control freaks who were also clueless. Responsibility for oversight of Sierra’s work ended up getting kicked down to their educational-films division, a collection of aged former schoolteachers who didn’t even know how to boot a computer yet were desperate to prove to their own managers that they were contributing. The problem was that their lack of understanding of the technology involved sharply limited how productive those contributions could be. For instance, Sierra’s artists were constantly being told that they needed to make Mickey Mouse’s ears “rounder” when it simply wasn’t possible; the pixels themselves were just too big and too square. Disney, says John Williams, “knew nothing about the media we were creating, didn’t care, and didn’t want to.” Al Lowe developed the most effective strategy for dealing with them: to ignore them as much as possible.

I would rarely send them anything unless they begged me for it, and I always made sure it took me a few extra days to get something ready for them. I basically played a passive-aggressive postponement game with them. And it worked out because they didn’t really have a lot of good suggestions. They often suggested changes so that they would have some imprint on the product, but their changes were never for the better. It was always just to make it different, so that they could say they’d done something.

The combination of Disney’s control-freak tendencies and their high royalties quickly soured everyone on the deal, iconic though the characters themselves may have been. In the end it resulted in only a handful of releases, including one each for Donald Duck, Mickey Mouse, and Winnie the Pooh, with most activity stopping well before the license itself actually expired. The entire episode is dismissed by John Williams today as an “unproductive side trip,” while Ken Williams walked away from the Disney experience having learned yet one more lesson that he would use to guide Sierra from here on in a direction that was, once again, contrary to the way just about everyone else in the industry was going. From now on they would stay far, far away from licenses of any sort.

Perhaps the most worthwhile result of the partnership was a full-fledged AGI adventure game based on Disney’s 1985 box-office bomb The Black Cauldron that was largely designed by Roberta and programmed, as usual, by Al Lowe. Being designed to be suitable for younger children than even the King’s Quest games, it ditches the parser entirely in favor of a menu-driven interface and is nowhere near as cruel as the typical Sierra adventure game of the era. It would prove to be good training for Al’s next project.

The winding down of the Disney arrangement might have made Al Lowe nervous, may have made him wonder if it also meant the winding down of his career — or at least his career with Sierra — as a maker of games. If so, he didn’t have to be nervous very long. Soon after The Black Cauldron wrapped, Ken invited him to lunch to discuss a dangerous idea that had been brewing at the back of his mind for a while now, one that if carried through would send his new, family-friendly Sierra ricocheting back toward the debauchery of Softporn. We’ll join Al Lowe at that lunch, during which he’ll be introduced to the idea that will change his life forever, next time.

(This article is largely drawn from my personal correspondence with John Williams as well as interviews with Al Lowe conducted by Matt Barton, Top Hats and Champagne, and Erik Nagel. Last but far from least, Ken Gagne also shared with me the full audio of an interview he conducted with Lowe for Juiced.GS magazine. My huge thanks to John and Ken!)

 
 

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Send in the Clones

In computer parlance, a clone is Company B’s copycat version of Company A’s computer that strains to be as software and hardware compatible with its inspiration as possible. For a platform to make an attractive target for cloning, it needs to meet a few criteria. The inspiration needs to be simple and/or well-documented enough that it’s practical for another company — and generally a smaller company at that, with far fewer resources at its disposal — to create a compatible knock-off in the first place. Then the inspiration needs to be successful enough that it’s spawned an attractive ecosystem that lots of people want to be a part of. And finally, there needs to be something preventing said people from joining said ecosystem by, you know, simply buying the machine that’s about to be cloned. Perhaps Company A, believing it has a lock on the market, keeps the price above what many otherwise interested people are willing or able to pay; perhaps Company A has simply neglected to do business in a certain part of the world filled with eager would-be buyers.

Clones have been with us almost from the moment that the trinity of 1977 kicked off the PC revolution in earnest. The TRS-80 was the big early winner of the trio thanks to its relatively low price and wide distribution through thousands of Radio Shack stores, outselling the Apple II in its first months by margins of at least twenty to one (as for the Commodore PET, it was the Bigfoot of the three, occasionally glimpsed in its natural habitat of trade-show booths but never available in a form you could actually put your hands on until well into 1978). The first vibrant, non-business-focused commercial software market in history sprung up around the little Trash 80. Cobbled together on an extreme budget out of generic parts that were literally just lying around at Radio Shack — the “monitor,” for instance, was just a cheap Radio Shack television re-purposed for the role — the TRS-80 was eminently cloneable. Doing so didn’t make a whole lot of sense in North America, where Radio Shack’s volume manufacturing and distribution system would be hard advantages to overcome. But Radio Shack had virtually no presence outside of North America, where there were nevertheless plenty of enthusiasts eager to join the revolution.

EACA shindig in Hong Kong

A shindig for EACA distributors in Hong Kong. Shortly after this photo was taken, Eric Chuang, third from right in front, would abscond with $10 million and that would be that for EACA.

The most prominent of the number of TRS-80 cloners that had sprung up by 1980 was a rather shady Hong Kong-based company called EACA, who made cheap clones for any region of the world with distributors willing to buy them. Their knock-offs popped up in Europe under the name “The Video Genie”; in Australasia as the “Dick Smith System 80,” distributed under the auspices of Dick Smith Electronics, the region’s closest equivalent to Radio Shack; even in North America as the “Personal Micro Computers PMC-80.” EACA ended in dramatic fashion in 1983 when founder Eric Chuang absconded to Taiwan with all of his company’s assets that he could liquify, $10 million worth, stuffed into his briefcase. He or his descendants are presumably still living the high life there today.

By the time of those events, the TRS-80’s heyday was already well past, its position as the most active and exciting PC platform long since having been assumed by the Apple II, which had begun a surge to the fore in the wake of the II Plus model of 1979. The Apple II was if anything an even more tempting target for cloners than the TRS-80. While Steve Wozniak’s hardware design is justly still remembered as a marvel of compact elegance, it was also built entirely from readily available parts, lacking the complex and difficult-to-duplicate custom chips of competitors like Atari and Commodore. Wozniak had also insisted that every last diode on the Apple II’s circuit board be meticulously documented for the benefit of hackers just like him. And Apple, then as now, maintained some of the highest profit margins in the industry, creating a huge opportunity for a lean-and-mean cloner to undercut them.

The Franklin Ace 1000

A Franklin Ace 1000 mixed and matched with a genuine Apple floppy drive.

Assorted poorly distributed Far Eastern knock-offs aside, the first really viable Apple II clone arrived in mid-1982 in the form of the Franklin Ace line. The most popular model, the Ace 1000, offered for about 25 percent less than a II Plus complete hardware and software compatibility while also having more memory as well as luxuries like a numeric keypad and upper- and lowercase letter input. The Ace terrified Apple. With the Apple III having turned into a disaster, Apple remained a one-platform company, completely dependent on continuing Apple II sales — and continuing high Apple II profit margins — to fund not one but two hugely ambitious, hugely innovative, and hugely expensive new platform initiatives, Lisa and Macintosh. A viable market in Apple II workalikes which cut seriously into sales, or that forced price cuts, could bring everything down around their ears. Already six months before the Ace actually hit the market, as soon as they got word of Franklin’s plans, Apple’s lawyers were therefore looking for a way to challenge Franklin in court and drive their machine from the market.

As it turned out, the basis for a legal challenge wasn’t hard to find. Yes, the Apple II’s unexceptional hardware would seem to be fair game — but the machine’s systems software was not. Apple quickly confirmed that, like most of the TRS-80 cloners, Franklin had simply copied the contents of the II’s ROM chips; even bugs and the secret messages Apple’s programmers had hidden inside them were still there in Franklin’s versions. A triumphant Apple rushed to federal court to seek a preliminary injunction to keep the Ace off the market until the matter was decided through a trial. Much to their shocked dismay, the District Court for the Eastern District of Pennsylvania found the defense offered by Franklin’s legal team compelling enough to deny the injuction. The Ace came out right on schedule that summer of 1982, to good reviews and excellent sales.

Franklin’s defense sounds almost unbelievable today. They readily admitted that they had simply copied the contents of the ROM chips. They insisted, however, that the binary code contained on the chips, being a machine-generated sequence of 1s and 0s that existed only inside the chips and that couldn’t be reasonably read by a human, was not a form of creative expression and thus not eligible for copyright protection in the first place. In Franklin’s formulation, only the human-readable source code used to create the binary code stored on the ROM chips, which Franklin had no access to and no need for given that they had the binary code, was copyrightable. It was an audacious defense to say the least, one which if accepted would tear down the legal basis for the entire software industry. After all, how long would it take someone to leap to the conclusion that some hot new game, stored only in non-human-readable form on a floppy disk, was also ineligible for copyright protection? Astonishingly, when the case got back to the District Court for a proper trial the judge again sided with Franklin, stating that “there is some doubt as to the copyrightability of the programs described in this litigation,” in spite of an earlier case, Williams Electronics, Inc. v. Arctic International, Inc., which quite clearly had established binary code as copyrightable. Only in August of 1983 was the lower court’s ruling overturned by the Federal Court of Appeals in Philadelphia. A truculent Franklin threatened to appeal to the Supreme Court, but finally agreed to a settlement that January that demanded they start using their own ROMs if they wanted to keep cloning Apple IIs.

Apple Computer, Inc., v. Franklin Computer Corp. still stands today as a landmark in technology jurisprudence. It firmly and finally established the copyrightable status of software regardless of its form of distribution. And it of course also had an immediate impact on would-be cloners, making their lives much more difficult than before. With everyone now perfectly clear on what was and wasn’t legal, attorney David Grais clarified the process cloners would need to follow to avoid lawsuits in an episode of Computer Chronicles:

You have to have one person prepare a specification of what the program [the systems software] is supposed to do, and have another person who’s never seen the [original] program write a program to do it. If you can persuade a judge that the second fellow didn’t copy from the [original] code, then I think you’ll be pretty safe.

After going through this process, Apple II cloners needed to end up with systems software that behaved absolutely identically to the original. Every system call needed to take the exact same amount of time that it did on a real Apple II; each of the original software’s various little quirks and bugs needed to be meticulously duplicated. Anything less would bring with it incompatibility, because there was absolutely nothing in those ROMs that some enterprising hacker hadn’t used in some crazy, undocumented, unexpected way. This was a tall hurdle indeed, one which neither Franklin nor any other Apple II cloner was ever able to completely clear. New Franklins duly debuted with the new, legal ROMs, and duly proved to be much less compatible and thus much less desirable than the older models. Franklin left the Apple-cloning business within a few years in favor of hand-held dictionaries and thesauri.

There is, however, still another platform to consider, one on which the cloners would be markedly more successful: the IBM PC. The open or (better said) modular architecture of the IBM PC was not, as so many popular histories have claimed, a sign of a panicked or slapdash design process. It was rather simply the way that IBM did business. Back in the 1960s the company had revolutionized the world of mainframe computing with the IBM System/360, not a single computer model but a whole extended family of hardware and software designed to plug and play together in whatever combination best suited a customer’s needs. It was this product line, the most successful in IBM’s history, that propelled them to the position of absolute dominance of big corporate computing that they still enjoyed in the 1980s, and that reduced formerly proud competitors to playing within the house IBM had built by becoming humble “Plug-Compatible Manufacturers” selling peripherals that IBM hadn’t deigned to provide — or, just as frequently, selling clones of IBM’s products for lower prices. Still, the combined profits of all the cloners remained always far less than those of IBM itself; it seemed that lots of businesses wanted the security that IBM’s stellar reputation guaranteed, and were willing to pay a bit extra for it. IBM may have thought the PC market would play out the same way. If so, they were in for a rude surprise.

The IBM PC was also envisioned as not so much a computer as the cornerstone of an ever-evolving, interoperable computing family that could live for years or decades. Within three years of the original machine’s launch, you could already choose from two CPUs, the original Intel 8088 or the new 80286; could install as little as 16 K of memory or as much as 640 K; could choose among four different display cards, from the text-only Monochrome Display Adapter to the complicated and expensive CAD-oriented Professional Graphics Controller; could choose from a huge variety of other peripherals: floppy and hard disks, tape backup units, modems, printer interfaces, etc. The unifying common denominator amongst all this was a common operating system, MS-DOS, which had quickly established itself as the only one of the four operating paradigms supported by the original IBM PC that anyone actually used. Here we do see a key difference between the System/360 and the IBM PC, one destined to cause IBM much chagrin: whereas the former ran an in-house-developed IBM operating system, the operating system of the latter belonged to Microsoft.

The IBM architecture was different from that of the Apple II in that its operating system resided on disk, to be booted into memory at system startup, rather than being housed in ROM. Still, every computer needs to have some code in ROM. On an IBM PC, this code was known as the “Basic Input/Output System,” or BIOS, a nomenclature borrowed from the CP/M-based machines that preceded it. The BIOS was responsible on startup for doing some self-checks and configuration and booting the operating system from disk. It also contained a set of very basic, very low-level routines to do things like read from and write to the disks, detect keyboard input, or display text on the screen; these would be called constantly by MS-DOS and, very commonly, by applications as well while the machine was in operation. The BIOS was the one piece of software for the IBM PC that IBM themselves had written and owned, and for obvious reasons they weren’t inclined to share it with anyone else. Two small companies, Corona Labs and Eagle Computer, would simply copy IBM’s BIOS a la Franklin. It took the larger company all of one day to file suit and force complete capitulation and market withdrawal when those machines came to their attention in early 1984.

Long before those events, other wiser would-be cloners recognized that creating a workalike, “clean-room” version of IBM’s BIOS would be the key to executing a legal IBM clone. The IBM PC’s emphasis on modularity and future expansion meant that it was a bit more forgiving in this area than the likes of the more tightly integrated Apple II. Yet an IBM-compatible BIOS would still be a tricky business, fraught with technical and financial risk.

As the IBM PC was beginning to ship, a trio of Texas Instruments executives named Rod Canion, James Harris, and William Murto were kicking around ideas for getting out from under what they saw as a growing culture of non-innovation inside TI. Eager to start a business of their own, they considered everything from a Mexican restaurant to household gadgets like a beeper for finding lost keys. Eventually they started to ask what the people around them at TI wanted but weren’t getting in their professional lives. They soon had their answer: a usable portable computer that executives and engineers could cart around with them on the road, and that was cheap enough that their purchasing managers wouldn’t balk. Other companies had explored this realm before, most notably the brief-lived Osborne Computer with the Osborne 1, but those products had fallen down badly in the usability sweepstakes; the Osborne 1, for example, had a 5-inch display screen the mere thought of which could prompt severe eye strain in those with any experience with the machine, disk drives that could store all of 91 K, and just 64 K of memory. Importantly, all of those older portables ran CP/M, until now the standard for business computing. Canion, Harris, and Murto guessed, correctly, that CP/M’s days were numbered in the wake of IBM’s adoption of MS-DOS. Not wanting to be tied to a dying operating system, they first considered making their own. Yet when they polled the big software publishers about their interest in developing for yet another new, incompatible machine the results were not encouraging. There was only one thing for it: they must find a way to make their portable compatible with the IBM PC. If they could bring out such a machine before IBM did, the spoils could be enormous. Prominent tech venture capitalist Ben Rosen agreed, investing $2.5 million to help found Compaq Computer Corporation in February of 1982. What with solid funding and their own connections within the industry, Canion, Harris, and Murto thought they could easily design a hardware-compatible portable that was better than anything else available at the time. That just left the software side.

Given Bill Gates’s reputation as the Machiavelli of the computer industry, we perhaps shouldn’t be surprised that some journalists have credited him with anticipating the rise of PC clones from well before the release of the first IBM PC. That, however, is not the case. All indications are that Gates negotiated a deal that let Microsoft lease MS-DOS to IBM rather than sell it to them simply in the expectation that the IBM PC would be a big success, enough so that an ongoing licensing fee would amount to far more than a lump-sum payout in the long run. Thus he was as surprised as anyone when Compaq and a few other early would-be cloners contacted him to negotiate MS-DOS license deals for their own machines. Of course, Gates being Gates, it took him all of about ten minutes to grasp the implications of what was being requested, and to start making deals that, not incidentally, actually paid considerably better than the one he’d already made with IBM.

The BIOS would be a tougher nut to crack, the beachhead on which this invasion of Big Blue’s turf would succeed or fail. Having quickly concluded that simply copying IBM’s ROMs wasn’t a wise option, Compaq hired a staff of fifteen programmers who would dedicate the months to come to creating a slavish imitation. Programmers with any familiarity at all with the IBM BIOS were known as “dirty,” and barred from working on the project. Instead of relying on IBM’s published BIOS specifications (which might very well be incorrect due to oversight or skulduggery), the team took the thirty biggest applications on the market and worked through them one at a time, analyzing each BIOS call each program made and figuring out through trial and error what response it needed to receive. The two trickiest programs, which would go on to become a sort of stress test for clone compatibility both inside and outside of Compaq, proved to be Lotus 1-2-3 and Microsoft Flight Simulator.

Before the end of the year, Compaq was previewing their new portable to press and public and working hard to set up a strong dealer network. For the latter task they indulged in a bit of headhunting: they hired away from IBM H. L. ”Sparky” Sparks, the man who had set up the IBM PC dealer network. Knowing all too well how dealers thought and what was most important to them, Sparks instituted a standard expected dealer markup of 36 percent, versus the 33 percent offered by IBM, thus giving them every reason to look hard at whether a Compaq might meet a customer’s needs just as well or better than a machine from Big Blue.

The Compaq Portable

Compaq’s first computer, the Portable

Savvy business realpolitik like that became a hallmark of Compaq. Previously clones had been the purview of small upstarts, often with a distinct air of the fly-by-night about them. The suburban-Houston-based Compaq, though, was different, not only from other cloners but also from the established companies of Silicon Valley. Compaq was older, more conservative, interested in changing the world only to the extent that that meant more Compaq computers on desks and in airplane luggage racks. ”I don’t think you could get a 20-year-old to not try to satisfy his ego by ‘improving’ on IBM,” said J. Steven Flannigan, the man who led the BIOS reverse-engineering effort. “When you’re fat, balding, and 40, and have a lot of patents already, you don’t have to try.” That attitude was something corporate purchasing managers could understand. Indeed, Compaq bore with it quite a lot of the same sense of comforting stolidity as did IBM itself. Not quite the first to hit the market with an IBM clone with a “clean” BIOS (that honor likely belongs to Columbia Data Products, a much scruffier sort of operation that would be out of business by 1985), Compaq nevertheless legitimized the notion in the eyes of corporate America.

The Compaq Portable goes flying

The worst possible 1980s airplane seatmate: a business traveler lugging along a Compaq Portable.

Yet the Compaq Portable that started shipping very early in 1983 also succeeded because it was an excellent and — Flannigan’s sentiments aside — innovative product. By coming out with their portable before IBM itself, Compaq showed that clones need not be mere slavish imitations of their inspirations distinguished only by a lower price. “Portable” in 1983 did not, mind you, mean what it does today. The Compaq Portable was bigger and heavier  — a full 28 pounds — than most desktop machines of today, something you manhandled around like a suitcase rather than slipping into a pocket or backpack. There wasn’t even a battery in the thing, meaning the businessperson on the go would likely be doing her “portable” computing only in her hotel room. Still, it was very thoughtfully designed within the technical constraints of its era; you could for instance attach it to a real monitor at your desk to enjoy color graphics in lieu of the little 9-inch monochrome screen that came built-in, a first step on the road to the ubiquitous laptop docking stations of today.

Launching fortuitously just as some manufacturing snafus and unexpected demand for the new PC/XT were making IBM’s own computers hard to secure in some places, the Compaq Portable took off like a rocket. Compaq sold 53,000 of them for $111 million in sales that first year, a record for a technology startup. IBM, suddenly in the unaccustomed position of playing catch-up, released their own portable the following year with fewer features but — and this was truly shocking — a lower price than the Compaq Portable; by forcing high-and-mighty IBM to compete on price, Compaq seemed to have somehow turned the world on its head. The IBM Portable PC was a notable commercial failure, first sign of IBM’s loosening grip on the monster they had birthed. Meanwhile Compaq launched their own head-to-head challenge that same year with the DeskPro line of desktop machines, to much greater success. Apple may have been attacking IBM in melodramatic propaganda films and declaring themselves and IBM to be locked in a battle of Good versus Evil, but IBM hardly seemed to notice the would-be Apple freedom fighters. The only company that really mattered to IBM, the only company that scared them, wasn’t sexy Apple but buttoned-down, square-jawed Compaq.

But Compaq was actually far from IBM’s only problem. Cloning just kept getting easier, for everyone. In the spring of 1984 two little companies called Award Software and Phoenix Technologies announced identical products almost simultaneously: a reverse-engineered, completely legal IBM-compatible BIOS which they would license to anyone who felt like using it to make a clone. Plenty of companies did, catapulting Award and Phoenix to the top of what was soon a booming niche industry (they would eventually resolve their rivalry the way that civilized businesspeople do it, by merging). With the one significant difficulty of cloning thus removed, making a new clone became almost a triviality, a matter of ordering up a handful of components along with MS-DOS and an off-the-shelf BIOS, slapping it all together, and shoving it out the door; the ambitious hobbyist could even do it in her home if she liked. By 1986, considerably more clones were being sold than IBMs, whose own sales were stagnant or even decreasing.

That year Intel started producing the 80386, the third generation of the line of CPUs that powered the IBM PC and its clones. IBM elected to wait a bit before making use of it, judging that the second-generation 80286, which they had incorporated into the very successful PC/AT in 1984, was still plenty powerful  for the time being. It was a bad decision, predicated on a degree of dominance which IBM no longer enjoyed. Smelling opportunity, Compaq made their own 80386-based machine, the DeskPro 386, the first to sport the hot new chip. Prior to this machine, the cloners had always been content to let IBM pave the way of such fundamental advances. The DeskPro 386 marks Compaq’s — and the clone industry’s — coming of age. No longer just floating along in the wake of IBM, tinkering with form factors, prices, and feature sets, now they were driving events. Already in November of 1985, Bill Machrone of PC Magazine had seen where this was leading: “Now that it [IBM] has created the market, the market doesn’t necessarily need IBM for the machines.” We see here business computing going through its second fundamental shift (the first being the transition from CP/M to MS-DOS). What was an ecosystem of IBM and IBM clones now became a set of sometimes less-than-ideal, sometimes accidental, but nevertheless agreed-upon standards that were bigger than IBM or anyone else. IBM, Machrone wrote, “had better conform” to the standards or face the consequences just like anyone else. Tellingly, it’s at about this time that we see the phrase “IBM clone” begin to fade, to be replaced by “MS-DOS machine” or “Intel-based machine.”

The emerging Microsoft/Intel juggernaut (note the lack of an “IBM” in there) would eventually conquer the home as well. Already by the mid-1980s certain specimens of the breed were beginning to manifest features that could make them attractive for the home user. Let’s rewind just slightly to look at the most important of them, which I’ve mentioned in a couple of earlier articles but have never really given its full due.

When the folks at Radio Shack, trying to figure out what to do with their aging, fading TRS-80 line, saw the ill-fated IBM PCjr, they saw things well worth salvaging in its 16-color graphics chip and its three-voice sound synthesizer, both far superior to the versions found in its big brothers. Why not clone those pieces, package them into an otherwise fairly conventional PC clone, and sell the end result as the perfect all-around computer, one which could run all the critical business applications but could also play games in the style to which kids with Commodore 64s were accustomed? Thanks to the hype that had accompanied the PCjr’s launch, there were plenty of publishers out there with huge inventories of games and other software that supported the PCjr’s audiovisuals, inventories they’d be only too eager to unload on Radio Shack cheap. With those titles to prime the pump, who knew where things might go…

Launched in late 1984, the Tandy 1000 was the first IBM clone to be clearly pitched not so much at business as at the ordinary consumer. In addition to the audiovisual enhancements and very aggressive pricing, it included DeskMate, a sort of proto-GUI operating environment designed to insulate the user from the cryptic MS-DOS command prompt while giving access to six typical home applications that came built right in. A brilliant little idea all the way around, the Tandy 1000 rescued Radio Shack from the brink of computing irrelevance. It also proved a godsend for many software publishers who’d bet big on the PCjr; John Williams credits it with literally saving Sierra by providing a market for King’s Quest, a game Sierra had developed for the PCjr at horrendous expense and to underwhelming sales given that platform’s commercial failure. Indeed, the Tandy 1000 became so popular that it prompted lots of game publishers to have a second look at the heretofore dull beige world of the clones. As they jumped aboard the MS-DOS gravy train, many made sure to take advantage of the Tandy 1000’s audiovisual enhancements. Thousands of titles would eventually blurb what became known as “Tandy graphics support” on their boxes and advertisements. Having secured the business market, the Intel/Microsoft architecture’s longer, more twisting road to hegemony over home computing began in earnest with the Tandy 1000. And meanwhile poor IBM couldn’t even get proper credit for the graphics standard they’d actually invented. Sometimes you just can’t win for losing.

Another sign of the nascent but inexorably growing power of Intel/Microsoft in the home would come soon after the Tandy 1000, with the arrival of the first game to make many Apple, Atari, and Commodore owners wish that they had a Tandy 1000 or, indeed, even one of its less colorful relatives. We’ll get to that soon — no, really! — but first we have just one more detour to take.

(I was spoiled for choice on sources this time. A quick rundown of periodicals: Creative Computing of January 1983; Byte of January 1983, November 1984, and August 1985; PC Magazine of January 1987; New York Times of November 5 1982, October 26 1983, January 5 1984, February 1 1984, and February 22 1984; Fortune of February 18 1985. Computer Wars by Charles H. Ferguson and Charles R. Morris is a pretty complete book-length study of IBM’s trials and tribulations during this period. More information on the EACA clones can be found at Terry Stewart’s site. More on Compaq’s roots in Houston can be found at the Texas Historical Association. A few more invaluable links are included in the article proper.)

 
 

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