BOSTON (AP) _ In the annals of personal computing, few
products have been bigger flops than the Rainbow.
That was the ill-fated line of PCs Digital Equipment Corp.
introduced a decade ago, but then halted in 1985 when it couldn't
crack the dominance of International Business Machines Corp. and
Apple Computer Inc.
Digital's retreat from the PC market proved costly and
embarrassing. It left the nation's second-largest computer
company virtually absent from the industry's fastest growing
But in a dramatic turnaround, Digital is now emerging as a
force in personal computers, proving that it's possible to get
over the Rainbow.
"A lot of people in the industry have been surprised because
DEC hasn't been known as a PC company," said Dan Ness, an analyst
with Computer Intelligence, a market research firm in La Jolla,
For more than a year, Digital has been aggressively selling
PCs via direct-marketing, sending catalogs to buyers around the
world and slashing prices.
Twice in 1992, Digital topped Computer Intelligence's monthly
ranking for PC market share growth. By the end of the year,
Digital climbed into the top 10 among U.S. personal computer
The comeback is noteworthy. The fast-paced computer industry
doesn't normally forgive mistakes. One example is another
Massachusetts computer firm, Wang Laboratories Inc., which also
missed out on the PC revolution and landed in bankruptcy court.
But the roster of players in the personal computer market has
been shifting, with smaller companies such as Dell Computer Corp.
making inroads by selling IBM-compatible PCs at cutthroat
"The shakeout that we are witnessing today is what gives an
opportunity to a company like Digital," said Enrico Pesatori,
hired by Digital last month to run the company's PC business.
Pesatori, a PC industry veteran who worked for Italian
computer maker Olivetti Co. then joined Zenith Data Systems
Inc. as chief executive officer, was brought on board by
Digital's new president, Robert B. Palmer.
Palmer took over the Maynard, Mass.-based company last fall,
succeeding Kenneth Olsen, Digital's legendary co-founder, who
resigned under a cloud when he couldn't end a series of
Olsen had led Digital to great heights by moving computing
away from giant mainframes to midsized minicomputers. But as this
trend moved down to the desktop Digital was caught flatfooted,
critics say. …