Computer Wiz Tries Harder to Get Users to Pick His System
The old Dick Pick was a perfect example of the imperfect businessman.
A computer wizard who is generally credited with devising one of the world’s best operating systems for business computers, Pick often gave potential customers a cavalier take-it-or-leave-it sales pitch. And if computer manufacturers wanted their machines to operate on Pick’s innovative system, he demanded licensing fees of up to $1 million, many times the cost of competing systems.
These days, however, Pick is trying to shed his mad scientist image. Prodded by a new wife who cares more about the business of selling computers than their inner workings, Pick has dropped his prices dramatically. He’s backing a new, high-powered marketing association made up of 22 manufacturers who use the Pick operating system in their computers. And, after 15 years of dressing casually for business, the 47-year-old Pick has even agreed to wear a tie to the office every day.
Nevertheless, industry analysts say these moves by Irvine-based Pick Systems may be a case of too little, too late.
Already, the analysts are saying the competition among operating systems for users appears to be heading toward lopsided victories by AT&T;’s Unix system for large computers and, in the desk-top category, by Microsoft’s MS-DOS, the system that powers the IBM personal computer.
Broad Implications
Although interest in this competition is largely limited to computer manufacturers, software writers and amateur tekkies, its outcome has broad implications for the future of computing.
Furthermore, the competition underscores how the maturing computer industry is increasingly seeking standards to govern its products and services.
The operating system that powers the greatest number of computers will be the system for which the greatest number of software programs are designed. And according to Robert Lefkowits of InfoCorp, a Cupertino market research firm, the brand of computer a customer buys increasingly will be determined by the specific software programs the customer needs. Few software programs are written to work on more than one operating system.
The link between system, software and computer-makers’ sales is “the only reason people are even concerned about operating systems,” Lefkowits says. “Otherwise, the user probably doesn’t even know his computer has one.”
Still, an operating system is among the most important parts of any computer’s internal workings. Without one, a computer can’t really be called a computer.
The operating system determines how the computer organizes the information it holds. In many respects it functions as, say, an executive secretary who establishes and runs an office’s filing system. The operating system specifies how data is stored in the computer and how it is retrieved. The operating system also can dictate the speed at which the machine completes a task and the tasks for which the machine is best suited.
System’s Best Uses
The Pick operating system’s best uses include cataloguing material in an electronic library (CBS News uses it in its archives) or operating a retail store where inventory levels are constantly changing (Contempo Casuals uses it).
By Pick’s own admission, the system is not particularly suited for word processing or handling mathematical and scientific computations. “You wouldn’t use us to design or keep track of the space shuttle,” Pick says. “But our system is the best for keeping track of all the parts used to build it.”
The system has also earned high marks because it allows owners of Pick-based machines to switch to another Pick-based computer system more easily than is the case with business computers that rely on their own independent operating systems. This relieves businesses of the expense and headache of having to rewrite or repurchase software.
The Pick system traces its roots to the mid-1960s when Pick was an engineer at TRW in El Segundo. According to Pick, the Army asked TRW to develop a computer system that would keep track of every bit of information about the Cheyenne helicopter project, a machine whose development progress and performance TRW was hired to monitor.
Pick was one of about a half-dozen employees who spent nearly four years writing the programs for the system the Army wanted. However, the Army had decided to scrap the helicopter project by the time the program was delivered.
Program in Public Domain
But the program was in the public domain, and with several additional ideas, Pick decided he had an operating system he thought he could copyright and market.
Initially, Pick worked with the founders of Microdata, a business computer maker in Irvine that since has been purchased by McDonnell Douglas Corp. In 1973, Microdata and Pick entered into a contract that allowed the computer maker to put the Pick operating system on its machines.
However, the contract soon became the subject of a lawsuit when Microdata claimed it had purchased Pick’s system rather than the rights to use it. The suit dragged until until 1981, when the suit was settled. During that period Pick managed to sign up only another three licensees for his system, partly because of his relaxed approach to business and partly because potential customers were scared away by the litigation.
“I don’t know why I didn’t push any harder,” Pick shrugs. “I always tried to focus on the technology and find people to help me run the business.”
Others agree that Pick’s business talents were lacking. “Dick made some marketing blunders in the beginning,” contends Aaron Goldberg, an analyst with International Data Corp. in Framington, Mass. “He was elitist and expensive. He didn’t want to open the system up to everyone . . . and people who did get the code had to work with him directly.”
Despite such criticism, Goldberg considers Pick’s product “a hell of a system,” and credits Pick for being among the first in the computer industry to recognize the importance of creating an operating system that can work on a variety of manufacturers’ machines rather than on just a single computer.
Didn’t Get Breaks
“He was ahead of his time,” Goldberg says. “But he never got any breaks like signing up a major manufacturer like Digital Equipment Corp. or Wang or Apple. He seemed to license to the second-tier companies.”
Meanwhile, AT&T;, whose Bell Laboratories developed the Unix system in the mid-1960s, was pursuing a different market strategy for its operating system.
Insulated by its telephone business from the pressures of having to make a profit on its system, AT&T; was able to give Unix to universities and colleges, where thousands of students learned computer programming by working on Unix-operating computers.
“AT&T; managed to get people hooked on Unix early,” Goldberg says. “And that meant hundreds of software programs were written for Unix because the author didn’t know anything else.” Furthermore, analysts say, AT&T;’s licensing fees of $40,000 to $50,000 were far more reasonable than Pick’s charges, which could range as high as $1 million and were never as low as competitors’ fees.
Nevertheless, many analysts contend that Pick’s system is better than Unix for operating a business and wonder what Pick is doing to convince the world of this fact and why he didn’t do it sooner.
The answer is that Pick is concentrating almost full-time these days on writing a new, improved Pick operating system. He is letting his wife of three years, Barbara Young, run the business.
Hard-Driving Executive
Young, who ran her own escrow company for 15 years, has earned a reputation in Orange County as a hard-driving, get-what-she-wants woman for the lead role she played with a group of Newport Beach residents who successfully fought the Irvine Co.’s plans to dramatically increase the rents for the leased land upon which their homes and businesses were built.
“Dick knows he’s got the best system in the world and figures people will eventually realize (it when) the word-of-mouth reaches them,” says Young. “I, on the other hand, figure people need to be told we’re here, and rather loudly, if necessary.”
Young, who admits she’s a computer neophyte, already has revamped the company’s licensing program, setting fees on a sliding scale that starts at a mere $50,000. The company has picked up at least six licensees since she joined the company, swelling its licensing ranks to 22 and nearly doubling its annual revenues from licensing fees to nearly $10 million. Licensees under old agreements have been given the opportunity to tear up those contracts and re-sign under the current schedule.
In addition, the company is heartily backing a new marketing association of Pick system computer makers, companies which Pick claims sold nearly $1 billion worth of computers last year.
Called Spectrum, the association was created to impress computer buyers with the fact that the machines made by the 17 members can work with each other because they share one common underpinning: the Pick operating system.
The importance of that fact is that a company buying a Pick-based computer from one company can easily buy a second Pick-based computer from another vendor without having to rewrite his software programs or suffer other problems from the move, explains Leonard Mackenzie, Spectrum’s chairman and chief executive officer at Pick family member General Automation in Anaheim.
Attempt to Fight Back
Mackenzie, who admits that the Pick users had to form a marketing group mainly because Dick Pick had failed to adequately market his system, says Spectrum is largely an attempt to fight back at AT&T;’s Unix, which is used by a variety of computer makers, including Altos, Fortune, Wicat, and, of course, AT&T.;
“All of us kept bumping up against this thing called Unix when we tried to sell our machines,” Mackenzie recalls. “This is our attempt to build a family like Unix has so the consumers will know there’s a real choice out there.” Spectrum members include McDonnell Douglas Computer Systems Co. (formerly Microdata), Ultimate Corp., Fujitsu Microsystems of America, CIE Systems Inc., Prime Computer Inc. and Pertec Computer Corp.
It is still too early to assess Spectrum’s impact. The group is barely a month old and is still designing its marketing program. However, analysts say it has only a slim chance of posing a serious challenge to Unix.
“Pick has a devoted following but the system is still a minute factor in the business market,” says Mary Ellen Dick, an analyst with Software Access International in the Silicon Valley.
Nevertheless, Lefkowits says the Pick system isn’t about to go the way of the dinosaur. “The system has staying power,” Lefkowits says.
Madcap Reputation
Although one reason for the small market share has been Pick’s lack of marketing, another often-mentioned factor is Pick’s madcap reputation. For one computer magazine cover a few years ago, he posed hanging by inversion boots. For a Business Week article, he stood next to a blown-up photo of himself as a child, doctored with a hand-drawn mustache.
“A lot of big-company customers are more comfortable with the corporate style of AT&T;,” says InfoCorp’s Lefkowits. “Pick is not particularly well known for his predictability. He’s a typical genius.”
Young acknowledges the problem. “We are a great system for business, yet when I got here two years ago, I had to put the business here on the Pick system,” she sighs. “Dick is a technical wizard and a dreamer. We are trying to make Dick more business-like.”
