Ex-Intel Team Set For Sequent Debut
The New York Times
September 10, 1984
Nearly 20 months ago, Casey Powell led a much-publicized exodus from the Intel Corporation, taking with him 16 of the computer company's executives and engineers. At the time, Mr. Powell, then Intel's manager of microprocessor operations, said that the group had no clear notion of what it would make.
But now, Sequent Computer Systems, the company they founded, has introducing its first product: the Balance 8000, a powerful multiprocessor that can be used in computer-aided design, image processing, automated testing and other engineering tasks.
If all goes well, production models of the computer should be rolling off the assembly line by winter.
Some Rave Reviews
The machine has been tested all summer, and some manufacturers have given it rave reviews.
One executive with a California- based company evaluating the Sequent computer for use as a component in a new computer-aided design system said of his test: ''It came up flawlessly and has been running so strong ever since that I have checked on more than one occasion to make sure they don't have a secret line hooked up to another machine.'' The executive asked not to be identified. Analysts say the Sequent computer joins a new class of machines - also being built by competitors such as the Hewlett-Packard Company and the Digital Equipment Corporation - that can provide a lot of computing power quickly, at a modest cost.
''This is a good time to build multiprocessors, because microprocessors today do not cost anything, comparatively,'' said Gordon Bell, the former head of engineering at Digital Equipment and now chief technical officer of a potential Sequent competitor, the Encore Computer Corporation. ''If you can figure out a way to combine them, you can get power that rivals super minis and small mainframes.''
A multiprocessor puts together a number of microprocessors - in Sequent's case, there are between 2 and 12 National Semiconductor Corporation microprocessors - and thus has the power of a larger computer, butthe greater flexibility of smaller machines. A computer such as Sequent's Balance 8000 is sold as a component to larger computer manufacturers who would ultimately incorporate it in their machines under their own names. It is compatible with the International Business Machines Corporation's Personal Computer.
Continual Pep Talks
But Mr. Powell is not relying on technology alone to sell the Balance 8000. In recent days, Sequent's 100 employees - who own 50 percent of the company's stock - have been subjected to continual pep talks from its president and chief executive officer. ''Every single person here owns the reputation the company will earn on a daily basis in the marketplace,'' he has reminded them.
He has admonished them not to ''park in the visitors' parking spaces and make customers walk two blocks in the rain.'' He urges a quick response: ''If you hear me scream 'phone,' that means it has rung more than twice, so pick it up, fast.'' Finally, he cautioned, ''Watch where you leave coffee rings. If the office looks shabby, people will think we build shabby computers.''
The introduction of the Balance 8000 concludes a frantic year and a half in which the minds of executives and employees have been riveted on the startup. ''The company's always in your mind. You have to move it aside to kiss the kids goodnight,'' said Mr. Powell.
It was on Jan. 17, 1983, that Mr. Powell and 16 colleagues, including Scott Gibson, general manager of Intel's memory components, and Larry Wade, a manager of Intel's systems research and development, resigned en masse from Intel's office in Beaverton, a high-technology suburb here that has acquired the hopeful title of ''silicon forest.'' Intel's Beaverton office is a major center for engineering and manufacturing computer component and systems products. All 17 of the former Intel workers agreed to work up to six months without salary, if necessary; they actually went three without pay.
They pooled $80,000 of their own savings as seed money until they were able to arrange the first round of a total of $12.7 million in venture capital financing. The venture capitalists own 50 percent of the company.
At the time the 17 resigned, they announced only what their product would not be: It would not imitate any Intel products. They did, however, stay within their area of expertise, catering to equipment makers.
From the start, Mr. Powell set out to create a big-company image. He leased a building in Beaverton, where neighbors include Intel, Hewlett- Packard and Textronic. And he persuaded suppliers that Sequent was earmarked for success. A furniture retailer offered a selection from the store's inventory at no charge for several months. The telephone company gave him the free use of phones for six months. His landlord agreed to waive the rent that first spring.
A Leasing Philosophy
''Our philosophy is to lease anything that does not move,'' said Mr. Gibson, ''to free precious money for product development.''
But that philosophy has had its drawbacks as well. Because Sequent grossly underestimated the number of computers it would need to lease during the product development stage, it ended up with five-year contracts on four giant computers. One- third of the power in a single Sequent computer now can replace these units, but efforts to sublease the unneeded computers have failed. ''Once we tell them what we're up to, everyone we have talked to would rather get a Sequent computer,'' said Mr. Powell.
The company has had its share of start-up headaches. Management became alarmed a year ago when their carefully prepared design schedule continued to lag six months behind. The problem plagued David Rodgers, newly hired from Digital Equipment as vice president of engineering. Companies die not from one major blow, Mr. Rodgers said, but from ''a million tiny cuts.''
Analyzing their problem, the managers decided that, in trying to prove they were easy to work with, they had allowed too many vendors to miss deadlines for delivery of parts. They tightened the reins - without forsaking their nice-guy approach. When one supplier delivered parts in one week that normally took four weeks to produce, Mr. Powell bought $100 worth of pizzas and distributed them to the supplier's staff.
Sequent also placed a premium on the efficiency of its own staff, distributing red buttons stamped ''priority'' to key personnel. The buttons reminded their subordinates to take on peripheral duties; it also allowed them to go to the head of coffee and lunch lines.
Mr. Powell bet his staff they could not meet their original design schedule. When he lost that bet, he paid off with a party - and, dressed as Bozo the Clown, jumped out of a cake.
Now Mr. Powell is so convinced of Sequent's success that he plans to break ground on Sept. 18 for a new building. ''Of course,'' he smiles, ''in the initial years, we will lease it, but maintain the option to buy.''
Copyright 1984 The New York Times Company