Compaq

Compaq Computer Corporation was an American information technology company founded in 1982 that developed, sold, and supported computers and related products and services. Compaq produced some of the first IBM PC compatible computers, being the second company after Columbia Data Products to legally reverse engineer the BIOS of the IBM Personal Computer. It rose to become the largest supplier of PC systems during the 1990s. The company was initially based in Harris County, Texas.

The company was formed by Rod Canion, Jim Harris, and Bill Murto, all of whom were former Texas Instruments senior managers. All three had left the company in 1991 due to an internal shakeup, and saw Eckhard Pfeiffer appointed as president and CEO, who served throughout the 1990s. Ben Rosen provided the venture capital financing for the fledgling company and served as chairman of the board for 17 years from 1983 until September 28, 2000, when he retired and was succeeded by Michael Capellas, who served as its last chairman and CEO until its merger.

Compaq was overtaken by Dell as the top global PC maker two times; one in 1999 and the other in 2001. Struggling to keep up against its competitors with the price wars against Dell, the launch of a joint venture with ADI Corporation in 1994, and a risky acquisition of DEC in 1998 (which includes the inheritance of the DEC Alpha family of CPUs), Compaq was acquired by Hewlett-Packard (HP) for US$25 billion in 2002. Despite using the Compaq name in HP's own HP Compaq brand of business computers, which served as a replacement for the Compaq Evo in 2003 as well as the HP ProBook brand in 2009, the Compaq brand as a whole remained in use by HP for lower-end systems until 2013 when it was discontinued; two years after the Compaq brand was discontinued, HP itself was later split up into two companies in 2015, leading to its legal successors HP Inc. and Hewlett Packard Enterprise.

As of 2025^[update], the Compaq brand is currently licensed to third parties outside of North America for use on electronics in Latin America (e.g. Mexico and Brazil) and India.

Compaq was founded in February 1982 by Rod Canion, Jim Harris, and Bill Murto, three senior managers from semiconductor manufacturer Texas Instruments. The three of them had left due to lack of faith and loss of confidence in TI's management and initially considered but ultimately decided against starting a chain of Mexican restaurants. Each invested $1,000 to form the company, which was founded with the temporary name Gateway Technology. The name "COMPAQ" was said to be derived from "Compatibility and Quality" but this explanation was an afterthought. The name was chosen from many suggested by Ogilvy & Mather, it being the name least rejected. The first Compaq PC was sketched out on a placemat by Ted Papajohn while dining with the founders in a pie shop, (named House of Pies in Houston). Their first venture capital came from Benjamin M. Rosen and Sevin Rosen Funds, who helped the fledgling company secure $1.5 million to produce their initial computer. Overall, the founders managed to raise $25 million from venture capitalists, as this gave stability to the new company as well as providing assurances to the dealers or middlemen.

Compaq differentiated its offerings from other IBM PC clones by not focusing mainly on price, but instead concentrating on new features such as portability and better technology, at prices comparable to those of IBM's PCs. In contrast to Dell and Gateway 2000, Compaq hired veteran engineers with an average of 15 years' experience, which lent credibility to Compaq's reputation of reliability among customers. Due to its partnership with Intel, Compaq was able to maintain a technological lead in the market place as it was the first one to come out with computers containing the next generation of each Intel x86 processors.

Under Canion's direction, Compaq sold computers only through dealers to avoid potential competition that a direct sales channel would foster, which helped foster loyalty among resellers. By giving dealers considerable leeway in pricing Compaq's offerings, either a significant markup for more profits or discount for more sales, dealers had a major incentive to advertise Compaq.

During its first year of sales (second year of operation), the company sold 53,000 PCs for sales of $111 million, the first start-up to hit the $100 million mark that fast. Compaq went public in 1983 on the NYSE and raised $67 million. In 1986, it enjoyed record sales of $329 million from 150,000 PCs and became the youngest-ever firm to make the Fortune 500. In 1985, sales reached $504 million. The company shipped its 500,000th computer in April 1986. In 1987, Compaq hit the $1 billion revenue mark, taking the least amount of time to reach that milestone. By 1991, Compaq held the fifth place spot in the PC market with $3 billion in sales that year.