Remembering Ken Olsen, a Computer Industry Pioneer

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Olsen's influence spread to his organization's form. He famously created a principle-driven organization—The Digital Way—structured in a matrix, with people having dotted-line connections to different parts of the company. I was in sales, but I had responsibilities in both product management and sales. While that structure had many pitfalls, some of which Google is newly rediscovering, its merits were that it recognized that Taylorism, or scientific management, had outlived its usefulness in modern, white-collar organizations, and something had to replace it, especially in fast-changing markets like technology.

Today, Olsen is too often remembered for two quotes. The first was when he called the Unix operating system "snake oil." At the time, upstarts like Sun Microsystems (ORCL) and others were bludgeoning Digital about its dependence on its own proprietary VMS software, instead of the allegedly more open Unix.

Olsen was right: Unix is and was snake oil. There is no one Unix, certainly not in the sense of the Jurassic Park scene where the young girl Lex sees a computer and says, "This is a Unix system; I know this." No, she didn't. Unix, as Olsen was really saying, had long been split into myriad variants, and it offended Olsen's inner engineer—he was an MIT graduate—to see Unix's "standard" benefits so misrepresented by marketers who had never written a line of software code in their lives.

Rise of Personal Computers

Olsen also famously said, "There is no reason for any individual to have a computer in his home," for which he has been mocked ever since. In later years, Olsen said that he meant mainframes, not personal computers, but it hasn't mattered. He was wrong, but his quote is being proved out, at least a little, with computing disappearing into the cloud, and computers turning back into display terminals to access software and data that are both elsewhere.

Olsen did have some major misses. I remember the controversies inside the company about its various forays into personal computers, which by the late 1980s were doing to Digital's minicomputers what they had done to mainframes before them. The company, like so many large organizations, was reluctant to cannibalize its own sales, so its products often seemed tentative and ill-promoted. For a while, Digital even tried to convince people that it was in software not hardware. I was given a "Digital is a Software Company" coffee mug that mostly listed printer drivers in an effort to look more like this young "Microsoft" (MSFT) company that was getting so much attention.

Despite Olsen's failings, he was a great entrepreneur. His company was open, democratic, and surprisingly tolerant of the experiments of its employees. Yes, his company failed, in the end, but his success and examples have inspired many entrepreneurs after him. Startups, even successful ones like Digital then or Google and Apple (AAPL) now, have no permanence in the economic landscape, even if its founders, like Ken Olsen, sometimes do.

Paul Kedrosky is contributing editor for Bloomberg. He writes a blog and column and appears frequently on Bloomberg TV and radio.