Control Data Corporation - Peripherals Business

Peripherals Business

In the early 1960s, the corporation moved to Ford Parkway in the Highland Park neighborhood of St. Paul where Norris lived. Through this period, Norris became increasingly worried that CDC had to develop a "critical mass" in order to compete with IBM. In order to do this, he started an aggressive program of buying up various companies to round out CDC's peripheral lineup. In general, they tried to offer a product to compete with any of IBM's, but running 10% faster and costing 10% less. This was not always easy to achieve.

One of its first peripherals was a tape transport, which led to some internal wrangling as the Peripherals Equipment Division attempted to find a reasonable way to charge other divisions of the company for supplying the devices. If the division simply "gave" them away at cost as part of a system purchase, they would never have a real budget of their own. Instead, a plan was established in which it would share profits with the divisions selling its peripherals, a plan eventually used throughout the company.

The tape transport was followed by the 405 Card Reader and the 415 Card Punch, followed by a series of tape drives and drum printers, all of which were designed in-house. The printer business was initially supported by Holley Carburetor in the Rochester, Michigan suburb outside of Detroit. They later formalized this by creating a jointly held company, Holley Computer Products. Holley later sold its stake back to CDC, the remainder becoming the Rochester Division.

Norris was particularly interested in breaking out of the punched card–based workflow, where IBM held a stranglehold. He eventually decided to buy Rabinow Engineering, one of the pioneers of optical character recognition (OCR) systems. The idea was to bypass the entire punched card stage by having the operators simply type onto normal paper pages with an OCR-friendly typewriter font, and then submit those pages to the computer. Since a typewritten page contains much more information than a punched card (which has essentially one line of text from a page), this would offer savings all around. Unfortunately, this seemingly simple task turned out to be much harder than anyone expected, and while CDC became a major player in the early days of OCR systems, OCR has remained a niche product to this day. Rabinow's plant in Rockville, MD was closed in 1976, and CDC left the business.

With the continued delays on the OCR project, it became clear that punched cards were not going to go away any time soon, and CDC had to address this as quickly as possible. Although the 405 remained in production, it was an expensive machine to build. So another purchase was made, Bridge Engineering, which offered a line of lower-cost as well as higher-speed card punches. All card-handling products were moved to what became the Valley Forge Division after Bridge moved to a new factory, with the tape transports to follow. Later on, the Valley Forge and Rochester divisions were spun off to form a new joint company with National Cash Register (later NCR Corporation), Computer Peripherals Inc (CPI), in order to share development and production costs across the two companies. ICL later joined the effort. Eventually the Rochester Division was sold to Centronics in 1982.

Another side-effect of Norris's attempts to diversify was the creation of a number of service bureaus that ran jobs on behalf of smaller companies that could not afford to buy computers. This was never very profitable, and in 1965, several managers suggested that the unprofitable centers be closed in a cost-cutting measure. Nevertheless, Norris was so convinced of the idea that he refused to accept this, and ordered an across-the-board "belt tightening" instead.