FROM ATOM TO ARC
Part one of the ups and downs of the development of Acorn.
The history of Acorn Computers is both a mirror of the history of the micro industry in Britain, and, through its continued survival, a testament to the ability and vision of its founders. But like other small computer companies which sprang to life in the boom years of the early Eighties, Acorn has known both success and failure.
To understand the way in which Acorn differed from other companies, you must delve into its origins in the late 1970s. Acorn was born from the enthusiasm of a group of students and researchers from Cambridge University's many laboratories.
Bored researchers waste plenty of time on obsessive and arcane hobbies. In the late Seventies, the hobby was building a home computer from the various kits and components that had just become available. Building your own computer required a diversity of skills from designing hardware and physically building the device to writing an operating system and applications software to run within the tiny memory then available.
It was already obvious that Cambridge was to become a centre of whatever computer industry Britain would have. Sir Clive Sinclair's companies were busy producing calculators, and by 1977 had put together a computer kit, the MK14.
Sinclair's marketing man, Chris Curry, saw opportunities for further development of the product and discussed them with his friend, physics researcher Hermann Hauser. Hauser had helped with the MK14 and his interest in selling computers had grown as his research project had reached completion. Numerous knowledgeable computer hobbyists were on hand to provide advice and Hauser sought their help frequently.
The opportunities were too good to miss and in 1978 Hauser and Curry formed Cambridge Processor Unit. CPU worked in a room 'borrowed' from Science of Cambridge, Sinclair's company that Curry helped run, and it provided computer consultancy services to finance its hardware development.
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CPU's first major task was the development of an improved and more secure electronic fruit machine program. University brains like Steve Furber and Roger Wilson, then undergraduates, provided much of the programming and design input, and it was Wilson who invented the machine to beat Sinclair's MK14.
The System One was launched as the first product of a new company, Acorn Computers, founded in March 1979. It was a 6502-based machine with just 512 bytes of memory - it sold by mail order for £70. On graduation from the university, Wilson went to work for the new company. He recalls that Hauser offered him the opportunity to work for a pittance but with the chance to develop the home computer of his dreams. But while the small Acorn team was busy putting computer kits together from its cramped office, other companies were advancing their plans to build more and more powerful machines for the emergent home computer market.
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Up until 1980, home computers were the preserve of committed electronics buffs - the machines could only be programmed in machine code, usually via a calculator-style keyboard or row of switches. The race was on to create the first single-board, cased home computer, a machine ready to be used by people who weren't necessarily electronics buffs. Acorn's rivals in the race were Sinclair and Newbury Laboratories. The latter's planned machine, which eventually became the Newbrain, looked especially promising. The Atom, Acorn's finished product, was based around the 6502 processor and was capable of supporting the all-important Basic language.
The Atom was more successful than the company had hoped, with over 20,000 machines going out. Some were supplied in kit form; Wilson recalls how he, Hauser and Hauser's secretary walked round and round the large table in the office, assembling packs to be sent out. However, the machine's success meant that it reached a whole new market and there were problems with the self-assembly kits; one was found not to work because it had been glued together, rather than soldered!
Where was Acorn to go next? Many possibilities were emerging with a new generation of 16-bit processors (like the 68000) set to come on to the market, and other developments, such as networking, gaining in importance.
Should Acorn abandon the 6502 processor which lay at the heart of all its machines? Should the next machine be full of the latest features or should it sacrifice advanced technology for the mass market?
After many lively meetings, the Acorn designers went away to work on Hauser's compromise suggestion, an improved 6502 machine with expansion possibilities. The 'Tube' was born to allow more sophisticated processors such as the 68000 to be added later. The new machine was to be called the Proton, continuing a trend born with the Atom.
Early in 1980 Chris Curry found out that the BBC was looking for a partner to produce and market a home computer. This was to be featured in an important television series aimed at increasing awareness and understanding of computers; the Computer Literacy Project. Richard Russell at the BBC had produced a detailed specification for the required machine, and the Corporation had been following the development of Newbury Laboratories' Newbrain most closely. It had virtually agreed to base the series around the machine.
While development delays on the Newbrain were worrying the BBC, Chris Curry along with other friends in the home computer industry tried to persuade them to look at alternatives to the Newbrain, or at least allow them to tender for the project. Eventually the BBC agreed, and Acorn had to come up with a working prototype matching the demanding specifications in only four days.
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The Acorn project which matched the BBC's requirements closest was the Proton. Although no-one at Acorn had even thought of adding things like teletext compatibility, it could already handle colour graphics and networking which were prime BBC requirements. Acorn were leaders in networking micros, having already shown the Econet system working on the Atom at a Personal Computer World show. In fact the potential of the Proton design was more than a match for the BBC specification - however, there was as yet no working model which Hauser and Curry could demonstrate to the BBC.
Hauser asked Roger Wilson if he could build a working Proton in four days, and received a short and definite reply - no. So he turned to Wilson's collaborator, friend and rival, Steve Furber.
In putting the same question to him, he teased Steve by saying Roger had already said it was possible. Of course, whatever Roger thought he could do, Steve had to be able to match! The ploy eventually drew a reluctant yes from both designers and they and a few others were persuaded to spend the weekend building a working model. The Proton required fast memory chips which had just been announced but had not yet been delivered; eventually a 'very nice man from Hitachi' delivered some of the first in the country - just enough for the prototype machine. The Proton circuit board was 'wirewrapped' and the operating system was ported across from the existing Atom.
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Inevitably, it didn't work. Heads were scratched and panic was about to set in because nothing could be seen on the screen. Just as the technical team from the BBC arrived, it began to work, displaying 80-column text on the screen. Later that day, 640 by 256 pixel graphics started to work too, but by then the BBC had already left. However, they were sufficiently impressed and the Proton, with teletext added, became the BBC micro. In April 1981 Acorn was contracted to supply the 12,000 machines that the BBC expected to sell by mail order.
In fact orders for more than twice that number were taken. The scale of the project was much greater than a small, young company like Acorn could deal with. The company quickly had to take on more staff to deal with the volume of sales; and moved into its present offices - a former water pumping station - in Cherry Hinton. The rapid expansion - in new offices in Cambridge, and a US subsidiary - meant that Curry and Hauser had to devote too much time to keeping up with what had already happened rather than planning ways of diversifying the product range. Designers and developers were ironing out small production problems on existing products rather than dreaming up their replacements, despite a US research centre and the company's leading brains already thinking about RISC chips.
As long as the great micro boom persisted, Acorn rode high on the crest of a wave. Just as with other highly profitable and dynamic young computer companies, potential difficulties lurked unnoticed. Short-term problems, such as financing the production and delivery of unprecedented numbers of micros had to be dealt with first. Meanwhile the company basked in a glow of high-profile publicity, topped up with a unique air of establishment respectability lent by the BBC association. Racing cars raced in Acorn colours and were occasionally dented by Acorn directors, an Acorn livery plane was ordered and, at a Buckingham Palace reception, Acorn was given the Queen's Award for Technology.
The very success of the BBC micro caused difficulties. Other products were viewed in BBC micro terms. With micros piled high in WH Smith, Chris Curry wanted to lead the company further into the fast expanding mass market for cheap computers: the company came up with a cut down BBC micro, the Electron, in July 1983. Hermann Hauser's dream of an upmarket office automation computer was answered in the form of the Acorn Business Computer - a reboxed BBC micro with various second processors - in September 1983. The original and fast-ageing design was the basis for new developments rather than a new idea.
Acorn was staying with the 6502 and 8-bit technology linked to its Tube interface and second processors, while Apple, IBM and the other business companies were basing designs on 16-bit chips. There was no 16-bit replacement for the BBC micro, the Electron was not around in enough numbers to take advantage of the 1983 Christmas sales. The next year was to bring the crunch with Alan Sugar just around the corner with his Amstrads, and Christmas 1984 was make or break.
Meanwhile, the backroom boys at Acorn were playing with the idea of jumping to 32-bit, with their RISC designs. But time was not on Acorn's side, and, as a future Acorn boss was to admit, Acorn paid a price for not having a 16-bit micro.
FROM BOOM TO BUST
Continuing our story of Acorn - how it rose to the dizzy heights and how it came down to earth.
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Acorn's first few years were ones of wild growth and expansion. The demand for computers had exploded in a way unimaginable in 1980 - the days of soldering mail order kits together. The BBC micro had ridden this wave of sudden enthusiasm, taking the company with it. Not only was it backed by the BBC's Computer Literacy Project, but from 1982 the Goverment's Micros in Schools scheme ensured that Acorn dominated the newly opened education market. Micros in Schools was the brainchild of the present education secretary, Kenneth Baker: it subsidised the purchase by schools of BBC micros, Sinclair Spectrums or Research Machines' 3802. Of these approved machines, the Beeb was by far the most popular. Sales in the Christmas 1983 period were double those of 1982. Would the boom continue or would home computers become a passing fad like skateboards or hula-hoops?
Acorn's directors firmly believed that growth would continue, and the launch of the company on the Unlisted Securities Market suggested that City economists supported that view. However there were signs that the type of computer in demand would change. Chris Curry's pet project, the Electron, was designed to cater for less sophisticated late-comers to the computer market. It was launched in August 1983, timed for the Christmas rush and priced at £199. However it was late, dogged by production problems particularly with the large custom designed chip at the Eletron's heart. Acorn failed to meet the demand for the new machine in much the same way as it had with the BBC micro.
The Electron was unpopular with Acorn's design boffins, who saw it as a threat to the company's commitment to developing machines at the forefront of technology. They busied themselves with more technically interesting projects such as finding more and more arcane second processors to attach to the Tube, and developing Hermann Hauser's office automation dream. At the beginning of 1984, Acorn was determined to be able to satisfy the demand for its micros - something it had failed to do in the previous year. The failure had been caused by several factors, most notable among them a shortage of crucial components. Actual production of the computers was handled by sub-contractors, so the volume of machines which could be produced was limited by their schedules and there was little flexibility to increase or reduce levels. This would become critical over the next year.
Contracts for supply of components and production of machines had to be decided and agreed well in advance. So by April, Acorn's directors had already decided that this was to be another year of unbridled expansion. Large retailers showed an interest in stocking the machines, and initially prospects for the Christmas ahead seemed good. But by the autumn, it was clear public demand and enthusiasm was on the wane. While Acorn was locked into producing vast numbers of Electrons, the chain stores were developing cold feet and failing to confirm the orders and quantities they had been discussing.
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Despite an extensive £4-million advertising campaign, a third of the Electrons that were built never made it on to Santa's sleigh - and behind them, there were large stockpiles of components that had been paid for, but remained unused.
The US division setup that year had been intended to win Acorn a share of the vast American education market. But this also failed to contribute any profits. By the time Acorn closed its American subsidiary it had cost it over £2 million.
The business machines with which Hauser and Acorn had been hoping to reach new market areas likewise failed to take off. The Acorn Business Computer, launched in 1984, was a large and unwieldy device. The original idea was for it to contain a BBC micro and a Z80 second processor, to run the then standard CP/M operating system. But CP/M had already lost ground to the MS-DOS standard set by the IBM PC. Another planned version used an Intel 80286 - ideal for competing with IBM PCs but this never appeared. In fact, the only ABC model to achieve even limited success was the Cambridge workstation, featuring a fast 32016 second processor instead of the Z80, and aimed at the further education and research market. The machine certainly never recouped the huge resources expended on its development.
What was more critical to the company's success was the upgrading or replacement of the BBC micro. Acorn's commitment to research and development was undeniable; at one point its hundred or so development staff were working on around 140 projects. While some of these projects eventually emerged as useful and marketable products, much effort was expended on work with no obvious application. Several efforts were made to rein in this side of Acorn, in parallel with attempts to give the company a more conventional and coherent management structure. However, very often, priorities were muddled.
Microsystems manager David Bell recalls his frustration at seeing resources diverted away from the project he was managing at this time, the BBC Master, in favour of the stopgap model B+.
The B+ was clear to all as a model B with a new sticker on the front. The changes involved in the B+ were aimed mainly at reducing the cost of manufacturing - and hardly merited the title of 'new product'. But the Master, eventually launched in early 1986, was the true replacement and to this day continues to be a successful product for the company, and a well thought-out machine for its mainly educational users.
The most advanced division of the Advanced Research and Development section was, during 1984, working on a new processor chip incorporating the idea of a reduced instruction set - an idea that was at that time quite revolutionary.
Even within Acorn few people knew about the project - it took Roger Wilson some time to tell his boss, Hauser, what he was doing, let alone anyone else. Other projects that were under development at that time concentrated on telecommunications, interfacing computers with them and interactive video.
While the depth and number of research projects showed that Acorn had a longterm, if hazy, commitment to the future, its parlous state at the end of the disastrous Christmas 1984 sales period did not inspire similar confidence. Investors, the press and Acorn's creditors on the production side were all worried. Newspaper articles, most notoriously those in the Sunday Times, suggested that all was not well. The share price, buoyant through most of 1984 fell rapidly from its peak which had valued the firm at over £190m. Eventually, in February, one creditor issued a winding-up petition. Acorn had fallen out with one potential source of help - its merchant bankers Lazards, and receivership seemed only too likely. Instead the company's new bankers searched for another company which could take on Acorn and help it through its crisis.
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The Italian computer giant Olivetti stepped in after brief but intense negotiations. On February 20, 1985 (at 2.30 in the morning to be precise, reported Acorn User at the time), Curry and Hauser signed an agreement which gave Olivetti a 49 per cent stake in the company for £12 million. The money would go some way to covering Acorn's £11 million losses in the previous six months.
Tales abound of Acorn's optimism and profligacy - it bought 10,000 music addons for its computers. They occupied valuable warehouse space for years until recently being resold to the original supplier for a much smaller sum of money. Manuals were lovingly produced in Acorn style for CP/M software for the business machines. The aeroplane and the racing cars disappeared quickly.
Other changes were to be made to the company, a new structure, a new board including members from Olivetti and AT&T (Olivetti's large American shareholder) and 120 fewer staff - a quarter of the previous total. And it was only after the Olivetti take-over that proper emphasis was put on the real replacement for the BBC model B - the Master.
However great the sums handed over, they soon proved to be insufficient. During 1985 it became clear that the sales targets set by Olivetti were not being reached. A further cash injection increased Olivetti's share of Acorn to 80 per cent and a new managing director, Brian Long, was installed. It was at this stage that the first rumours of the reduced instruction-set chip began to emerge - amazingly Olivetti had taken over Acorn without knowing about the company's most promising long-term project. Roger Wilson says, 'After Olivetti arrived we said to them, "Now you've bought the company, we can tell you what we are really working on".
The Master series was launched at the beginning of 1986. It seemed to some observers an anomaly, an 8-bit machine when all except the cheapest home computers were turning to the 16-bit MS-DOS formula imposed by the success of the IBM PC. As a refinement of the original BBC machine it had a lot to offer, with convenient bumps and holes to house the beloved add-on bits and pieces of the BBC world. And because of the use of custom chips and more modern components, it was cheaper to manufacture than the original model B had become. However at £499 for the basic model, it was relatively expensive, and outside Acorn's stronghold in the education market it could never hope to achieve the sales of the original BBC micro. A concession to industry standards was offered by the Master 512 which gave a measure of PC-compatibility, but at a price close to £1000.
With its own 32-bit chip looking very good during development, it is clear that Acorn saw no need to forsake the trusty 6502 chip which ran its computers at more than acceptable speeds. Why bother to give that up in favour of a 16-bit standard that could only be a stopgap? But even if you dispute their validity, compatibility with prevailing industry standards offers at least the safety of numbers, and following its own path would prove a risky business for Acorn. In an industry which expects everything to get better and faster on an annual basis, Acorn seemed for a time to be refusing to compete. Its new product, announced in September 1986, the Master Compact, offered little new except its exterior design packaged into three boxes rather than the customary two. Even this was a stopgap - an engineering necessity born out of the need for a 'new product now' - the Compact cases were originally designed for the Acorn Communicator, an ill-fated product which sold in low numbers to companies needing computers with built-in modems.
The RISC chip, while new and exciting and very, very fast, had not yet taken the form of a tangible machine which could be sold to customers. Luckily, the continued good sales of Masters kept the company afloat while the Advanced Research and Development team under Roger Wilson and Steve Furber developed the ARM chip and its companions that eventually became the Archimedes.
