Spinoffs, Chapter 6

Technology managers and engineers by nature look for new opportunities - this led to creation of many, many companies by people from 'UNIVAC'.  Information Technology Pioneers got their start at ERA, ..., etc., then started their own technology companies.  Our Legacy was/is a training and learning opportunity for many other companies.

Departure of several management and engineering personnel in 1957 to create Control Data Corporation (CDC) is documented in Dave Lundstrom's book, "A few good men from UNIVAC."  The first CDC computer, model 1604 was named because the first CDC plant was at 501 Park Avenue and some of the computer concepts came from the UNIVAC 1103, i. e. 1103 + 501 = 1604. The 1604 was a 48 bit machine, sort of an expansion from the AN/USQ-20 30-bit architecture.  It also had a few 24 bit instructions which didn't require memory operands thus two instructions per memory word.
"According to CDC's former CEO, Robert M. Price, 'Control Data was the Apple Computer of its time; ... there were more than 100 spin-off and other derivative companies ranging from ...' " Perhaps Mr. Price could have mentioned that CDC itself was a spin-off.  The U of MN Institute of Technology bought a 1604 in 1963, used by Lowell in 1964 during his Fortran Class taught by Dr. Marvin Stien. [lab]

{Editor's note: A table of 'spinoff' information was printed in the June 23, 1986 St. Paul Pioneer Press and Dispatch citing the Charles Babbage Institute as the data source.}

We've added a few found by our own research; i.e. Northport Engineering before CDC, Printware Inc., and others listed after 1985. 

A Commemorative Plaque

On June 15th Chad Roberts, president of the Ramsey County Historical Society (RCHS) unveiled a commemorative plaque at the original Engineering Research Associates (ERA) site recognizing the importance of ERA and spinoff companies to the local economy and the world.  The new plaque theme is, “ERA and spinoffs’ technologies came to rival agriculture and mining as a leading industry in the state.”  “From this plant, an enormous contribution was made to human welfare throughout the world, and the benefits to the local economy are almost beyond measure.”   Don Hall, author of Generation of Wealth - the Rise of CDC, was the principal sponsor and emceed the program.  After the plaque was unveiled, Unisys historian Lowell Benson noted a few significant time points of the ERA through Unisys corporate lineage, including the Club’s participation in a documentary and volunteerism at the Lawshe Memorial Museum.  Following Lowell's comments were speakers from ERA/UNIVAC/Cray, Dean Laurance; Control Data, James McGuire; Cray Research, John Rollwagen; and Cardiac Pacemakers/St. Jude Medical, Manny Villafana. This was followed by audience comments. 

• The July ‘Our Stories’ provides Lowell's remarks and background information.
• VIP Club Volunteer extraordinaire Keith Myhre created a video of the event.  RCHS's Robyn Priestley converted the video into a youtube image for the public to view, https://youtu.be/DvC3API_64I .

Thanks to the planning committee for making this event happen; Chad Roberts, Dave Beal, Jay Pfaender, Don Hall, and Lowell Benson.

1.0 Table of Spin Off Corporations

ERA -> Unisys Spinoff Organizations	YEAR	CDC spin off's
Ramsey Engineering	1953	n/a
General Kinetics	1955	n/a
Northport Engineering {Editor's note: See Bill Klingner article below this table.}	1956	n/a
Midwest Circuits Inc. (later became Fabri-tek), Transistor Electronics Corp, and Control Data Corporation	1957
Data Display (later acquired by CDC)	1958
General Magnetics Inc.	1959	Flame Industries
National Connector Corporation (with people from Magnetic Controls), Flortronics Inc, Nuclear Data, Whitehall Electronics (later acquired by Electro-Science Investors), Electro-Med Inc. (also acquired by Elector-Science Investors),	1960
Data Management Inc., Theradyne Corporation, Minneapolis Scientific Controls Corporation	1961
Aries Corporation, Tronchemics Research Inc.	1962
Mohawk Data Sciences Corporation by Lauren King, and Ted Robinson, former Univac employees.	1964
Wiesmantel and Associates	1965
Analysts International - grew out of Aries Corporation (see 1962).	1966	Computer Systems Inc. Computer Communications
	1967	Data Action (NCS)
Atron (acquired by Mohawk Data Services), Comcet (became NCR-Comten), Comserv	1968	Astrocom, Data 100 (became Northern Telecom in 1979),
United Software, Dicomed	1969	The Analyst, Data Central, Techanalysis, Data Card
Community Electronics,	1970
Turtle Mountain Corporation in Dunseith, ND spun off from Atron (a 1968 spin-off), TMCfromNDSU.pdf (vipclubmn.org)	1971	Midwest Data Systems
	1972	Datagraph, Cray Research,
	1973
	1974	Network Systems
	1976	Williams Sound Corporation
	1983	ETA, Edge Computer
Printware, Inc. {Editor's note: See People, M-O for Don Mager's mini-bio, and article below Northport article.}	1985
TeamQuest was founded by three employees from UNISYS http://vipclubmn.org/USsites.html#ClearLake; InfoPet	1991
Product Development Association, Eagan Minnesota	1994

2.0 Northport Engineering by Bill Klingner

Your request for information on the history of Northport Engineering's development is thought provoking. I'll start with a little about my partner John Webster and me. We graduated from the University of Minnesota with Electrical Engineering degrees, John in June of '50 and I in Dec. of '50.

John's first job was in the hearing aid industry while mine was with U.S. Steel in Youngstown, Ohio. Together we formed Northport Engineering as a manufacturers agent company to support the electronic component and manufacturing industries in 1956 and 1957.

{Editor's note: By this time, Bill Klingner was working at Remington Rand Univac - shown on the right as he worked with the 1103 computer.}

Our business followed the growth of the computer industry and we selected lines and manufacturers to support the industry. Manufacturers sought us out to represent them in areas such as memory cores, resistors, capacitors, and associate products. Our customers included Litton, CDC, UNIVAC, St. Jude, 3M, Honeywell, UNISYS and Medtronics.

John passed away in the 60's.  My son, Cary, began working with me in the 70's while in high school.  He took over as President in the 80's as I phased into retirement.  Cary became owner in the late 80's.

A number of engineers joined us such as Robert Schneiderhan and we ended up with a staff of 10 to 11 people. The company continues to serve the electronic industry under Cary's guidance and has been in existence now for 50+ years. Bill Klingner.

3.0 Printware by Don Mager

    Printware, Inc. was founded on May 16, 1985, to develop and manufacture high resolution laser printers, computer direct to plate machines, and associated consumables.  This was the result of two serendipitous events: I had come across a unique laser imaging technology 3M had developed and was willing to license, and I had completed 30 years at Sperry and was therefore ready to move on.  So it was that Dr. Al Taylor, a 3M employee, and I founded Printware.  I provided most of the "seed" money and was the CEO.  Al continued to work at 3M and was never a Printware employee.  The first two employees I recruited from Sperry were Tom Petschauer and Rick Pliml.  Our first workplace was an apartment in an apartment building which I owned.  We faced two immediate, major challenges as we started-out: obtaining adequate financing and developing the planned high-tech printing products.
     At Sperry, writing proposals was a regular part of the job, and this experience was tremendously helpful in writing a cogent business plan for Printware.  Amazingly, perhaps because we were digerati – or in spite of? - we were able, over the next few years, to raise $13M without using any venture capitalists or financial institutions.
   The license agreement with 3M gave us access to several of their patents related to laser imaging and related consumables.  The key patent pertained to a unique laser beam scanning method which utilized a resonant galvanometer versus the conventional multifaceted rotating mirror.  3M had developed this technology at a cost of $8M, but it did not fit into their long-range business plans, and so they licensed it to us on a royalty basis with no up-front fees.  In fact, 3M eventually invested a substantial amount in Printware!
   Although the 3M technology was designed for 300 DPI (dots per inch) applications, we realized that market would be dominated by Japanese companies, and therefore we went for the high-resolution market.  Unfortunately, the 3M technology was developed only to a point where it was barely adequate for 300 DPI.  Achieving quality high-resolution capability turned-out to be a much greater challenge than we had anticipated.
   A factor that made the imaging product development especially interesting and challenging was the many diverse technical disciplines involved, including logic design, circuit design, mechanical design (involving packaging, precision transport mechanisms, galvanometers), complex laser imaging optics, chemistry (toners, infrared sensitive plate material, drum coatings) and raster image processor software (not to be confused with word processing software).  Fortunately the Printware engineers, most of whom came from Sperry, were very talented.  Those from Sperry included Dave Shelander, Jim Howe, Mike Kelleher, Paul Richardson, and Rod Cerar.
   Our first product was a laser printer, the 720IQ, with 1200 DPI horizontal X 600 DPI vertical resolution, which is equivalent to 720 DPI. At the same time we introduced the 600HD raster image processor (RIP) which had industry-typical graphics, fonts and formatting capability.
   The next product, the 1440 Platesetter System was truly unique and revolutionary.  It provided direct computer-to-plate capability at 1200 x 1200 DPI resolution.  This technology simplified the plate-making process with up to 80% savings in consumables.  The Graphics Arts Technical Foundation (GATF) granted Printware the Intertech Technology Award for 1990 on behalf of the 1440 Platesetter.  Previous winners included companies such as 3M, Dupont, and Eastman Kodak.  This award recognizes technologies which are expected to have a major future impact on the Graphics Arts industry.  Along with the 1440 Platesetter, Printware introduced the 1200 HD RIP which was capable of emulating Adobe’s Postscript page description language.
   Printware was the first company to achieve this feat, which many industry experts said was virtually impossible because of the Postscript complexity.  We called our emulator “Printscript” which was very close to Adobe’s Postscript.  Adobe did not appreciate that and after considerable legal wrangling with Adobe’s attorneys we finally agreed to change the name to “Printstyle” in exchange for certain legal rights concerning Postscript.  The primary reason they were so tenacious in going after us was because of their concern that others would follow in our footsteps and emulate their language, causing them to lose royalties – which is exactly what did happen within a few years.
   These high resolution products required the development of special high performance galvanometers with capabilities far beyond anything available in the marketplace.  In fact the requirements were so stringent the final design required, among other things, that the resonant galvanometer be in a vacuum and exotic materials be used for the resonating torsion bar.  This design effort was led by Dave Shelander and resulted in one of several patents Printware was granted.
   The first major customer for the 1440 Platesetter was Deluxe Check which had more than 50% of the check printing business in the U.S.  Although profit from selling the plate setters was marginal, the strategy was for the consumables to be the big profit.   Unfortunately for Printware and unbeknown to Printware, Deluxe Check shipped one of the very first 1440 plate setters to Japan for the purpose of developing a competitive consumables source.  It became increasingly difficult for Printware’s domestic supplier to compete with the Japanese source.  It was a terrible blow to Printware’s long term strategy and profitability, but we were by no means enervated.
   By 1991 Printware had 120 employees and was profitable, with annual revenues of over $14M.  In 1996, Printware had an initial public offering, and the stock began trading on the NASDQ exchange under the symbol PRTW.  In 2000, Printware was taken private and the company now (2008) flourishes under the leadership of Tim Murphy, the President.  I first met Tim when, as a high school attendee, he worked part-time in one of my dry-cleaning plants.  After receiving a computer science degree and a two-year stint with the Peace Corps, he joined Printware.  The majority of Printware’s business at this time is consumables-oriented.
   One of the management lessons we learned at Printware was that getting too far ahead, technologically, of the rest of an industry such as printing and publishing presents some challenging marketing problems.  All the established suppliers feel threatened and so, like a pioneer, you wind-up with all the arrows [canards] in your back as the establishment scrambles to get up-to-speed on your technology without having to pay huge R&D costs. 
 Almost always, especially in start-up companies, marketing – not technology - is the nettlesome challenge. It doesn’t seem fair! [dvm]