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Forming a business
Harvard decided to down play computer research and Wang thought hard about his future. It seemed reasonable to try to start a company. He had so little to lose. He had some savings, enough to last a year, and if the company failed he could get a job. With only $600, no orders, no contracts and no office furniture he formed a sole proprietorship. The company was called Wang Laboratories and it specialised in magnetic memories. He used his contacts to sell magnetic cores which he built and sold for $4 each. Later in the year Harvard refunded $1000 from his pension plan which provided additional security. The business grew but modestly. At the end of the first year he had enough to continue and so he did. Then IBM entered the picture.
Duped by IBM
IBM wanted Wang's core memory patents and started negotiations to buy them. However, IBM was not an easy company to deal with. In 1955 they refused various licensing deals and then eventually settled on a sum of $500,000 but with strings attached. The money would be paid in stages and the last $100,000 was conditional on the patent not being challenged. At the last minute the patent was challenged by Fredrick Viehe, a complete surprise to Wang. It later turned out his patent had been bought by another company and Viehe had been sworn to secrecy not to reveal who. Wang guessed that the buyer was in fact IBM who had used each patent to drive down the price of the other. Wang was learning how business was done in the US!
Slowly but surely Wang's company changed from being a consulting and research company into a manufacturer. Their first product was a set of "Logiblocs" - electronic modules that implemented basic logic functions for use by control engineers. Later they built a phototypesetting machine called Linasec with Compugraphic. The machine was very successful but just as Wang Laboratories was turning into a large company the rug was pulled out from under it when Compugraphic decided to make the machines itself - leaving Wang with nothing. Wang was still learning about US business practice and took each incident as a lesson not to be repeated.
The real breakthrough came when Wang realised that engineers and scientists needed a good desktop calculator. The current generation of machines were slow and couldn't work out the scientific functions that were needed. His bright idea was to use a factor-combining method for working out logarithms and to base the whole machine on this principle. The result, the LOCI, was very much easier to use and cheaper than a computer and it sold in large numbers to a scientific and engineering community that was still desperate for computational power. The idea was so good that even years later his competitors were still wondering how the LOCI could calculate logarithms with so little electronics!
The LOCI calculator that started Wang on the road to being a computer company.
What is surprising is that even in 1965 it was still believed that there was only a limited market for computers. Wang didn't want to get involved in building a minicomputer because he really didn't have any idea that there was a market for such a product - but the huge success of LOCI proved that there was for sophisticated calculators. Over time the LOCI and the other calculators that Wang designed grew more and more to look like minicomputers - they were programmable, they had I/O devices and they were modular.
Why then did Wang carry on selling them as "calculators"? Perhaps the answer is that he had noticed the simple fact that once you mentioned the word "computer" management took notice and called in the accountants and called for proposals, studies and tenders. By selling his machines as calculators he short-circuited management's attempts to control computers and allowed the engineers and scientists to buy what amounted to a minicomputer in stages without having to seek approval from higher up! Interestingly a similar phenomena in the 80s got microcomputers into companies past the eyes of the data managers who were still totally preoccupied by their mainframes.
Wang Laboratories continued to build calculators. The model 300 was even easier to use and more successful than the LOCI. Later he became convinced that the ultimate easy-to-use calculator would be a machine that could be programmed in Basic - then a new language.
The LOCI's successor - the much easier to use 300
The Wang 700 was modelled on the IBM 360 system architecture and the 3300 was the first to use Basic. The Wang 2200 was clearly a minicomputer and was special because it had Basic in ROM. You switched it on and you could run Basic programs without having to spend tens of minutes loading the system. Clearly a minicomputer and yet Wang still insisted on calling it a "computing calculator" to avoid setting off the alarm bells!
Wang's first computer, the 700
By 1971 the writing for the calculator market was on the wall but many did not want to know. Wang predicted and understood what LSI (large scale integration) chips would do to his profitable market. The chip manufacturers would control the price of chips and the calculator companies would be at their mercy. He decided to get out of calculators at a time that most of the company's revenues were generated by them - a brave move.
The Wang word processors
Wang decided that word processing was the next step and he build dedicated word processing hardware long before VDU displays made the task easier and friendlier. He was in direct competition with IBM but he used IBM Selectric typewriters as the output device. Sales were lost when these didn't perform to standard. Wang wasn't surprised when he discovered that a stabilising spring was missing from all Selectrics sold to OEMs. With the spring in place the machine worked and sold well. Later word processors used VDU displays and were considered by many to be the best possible.
Even though Wang had predicted correctly the effect that LSI chips would have on the calculator market he didn't guess that the eventual result would be the personal computer. The days of the dedicated word processor were numbered and Wang Laboratories went into decline despite his best efforts. He died in 1990 before the worst of the cutbacks had taken effect.
An Wang was a cautious man who took business a step at a time and always weighed up the risks - a Confucian philosopher of the computer industry. He undoubtedly built the first desktop computers but had the good sense not to draw attention to this fact.