Wang Laboratories - Decline and Fall

Decline and Fall

A common view within the PC community is that the company failed because it specialized in computers designed specifically for word processing and did not foresee (and was unable to compete against) general-purpose personal computers with word processing software in the 1980s. Word processing was not actually the mainstay of Wang's business by the time desktop computers began to gain in popularity. Although Wang manufactured desktops, its main business by the 1980s was its VS line of mini-computer and "midframe" systems. The market for these mini-computers was ultimately conquered by enhanced micro-computers like the Apple Macintosh and the "Wintel" PC on one end and Sun, IBM and Hewlett-Packard servers on the other end. Wang would be only one of a large number of New England-based computer companies that would falter in the late 1980s and 1990s.

Dr. Wang's insistence that his son, Fred Wang, succeed him contributed to the company's failure. Fred Wang was a business school graduate, "but by almost any definition," wrote Charles C. Kenney, "unsuited for the job in which his father had placed him." His assignment, first as head of research and development, then as president of the company, led to resignations by key R&D and business personnel.

One turning point occurred when Fred Wang was head of R&D. On October 4, 1983, Wang Laboratories announced fourteen major hardware and software products, and promised dates of delivery. The announcement was well received, but even at the time there were warning signs. According to Datamation, Wang announced "everything but the kitchen sink. And if you could attach the kitchen sink to a personal computer they would announce that too." Very few of the products were close to completion and many of them had not even been started. All were delivered late and some were never delivered at all. In retrospect this was referred to as the "vaporware announcement" and it hurt the credibility of Fred Wang and Wang Laboratories.

In 1986 Fred Wang, then 36 years old, was installed as president of Wang Laboratories. On August 4, 1989, Dr. Wang fired his son. Richard W. Miller replaced him as the president of Wang Laboratories, having been with the company since 1988.

Miller announced in December 1989 that the company would start to embrace established software standards, rather than use traditional proprietary designs. An Wang died in March 1990. The company underwent massive restructuring, and in August 1990, it eliminated its bank debt, but still ended the year with a record net loss.

In November 1990, Wang announced their first personal computers running Unix. Previously, Wang's presence in the Unix and open systems markets had been modest. UNIX ran on the VS — Interactive Systems first ported IN/ix (their IBM360 version of SYS5 UNIX) to run in a VSOS Virtual machine circa 1985, and then Wang engineers completed the port so that it ran "native" on the VS hardware soon thereafter — but performance was always sub-par as UNIX was never a good fit for the inherently batch-mode nature of the VS hardware, and the line-at-a-time processing approach taken by the VS workstations; indeed, the workstation code had to be largely rewritten to bundle up each keystroke into a frame to be sent back to the host when running UNIX so that "tty" style processing could be implemented. PACE, which offered its data dictionary, excellent referential integrity, and speedy application development, was in the process of being ported to UNIX under the name OPEN Pace. A client server RDBMS model, built on the original product's ideology, OPEN Pace was demonstrated at the North American PACE User Group Conferences in both Boston and Chicago. OPEN Pace, along with a new Windows-based word processor called UpWord (which was at the time considered a strong contender to retake Wangs original market leadership from Microsoft), were touted as their new direction. However, after a marketing study suggested that it would require large capital investments in order to be viable competitors against Microsoft, both products were simply abandoned.

Ira Magaziner, who was brought in by Miller in 1990, proposed to take Wang out of the manufacture of computers altogether, and to go big into imaging software instead. In March 1991, the company introduced its Office 2000 marketing strategy, focusing on office productivity.

In June 1991 Wang started reselling IBM computers, in exchange for IBM investing into Wang stock. Wang hardware strategy to re-sell IBM RS/6000s also included further pursuit of UNIX software.

In August 1991, they won a suit against NEC and Toshiba claiming violation of Wang's patents on single in-line memory modules (SIMMs). The company still recorded a net loss for the 1991 fiscal year.

Wang Laboratories filed for bankruptcy protection on August 18, 1992.

Richard Miller stepped down as chairman and chief executive officer in January 1993, and moved to AT&T Corporation.

The complex of three Wang towers in Lowell, which originally cost $60 million to build and housed 4,500 workers in over a million square feet (100,000 m2) of office space, was foreclosed and sold at auction in 1994 for $525,000. The renovated complex, which is now known as CrossPoint, was subsequently sold in 1998 to a joint venture of Yale Properties and Blackstone Real Estate Advisors for over $100 million. A later deal to sell the complex for $180 million to a joint venture including Davis Marcus Partners, Prudential Real Estate Investors, and others fell apart in February, 2008.