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THE HISTORY OF IMSAI-
The Path to Excellence
Summary
IMSAI Manufacturing Corporation, a leading manufacturer of microcomputer
systems and components, specializes in the small business and hobby market.
Located in San Leandro, California, IMSAI developed and shipped its first
product, the I-8080 Microcomputer, in 1975. The versatile l-8080 satisfied the
limited needs of the hobbyist as well as the extended needs of commercial users.
The sustained success of this initial product has enabled IMSAI to expand its
product line. Today, after developing small business computers with a price tag
low enough to be used by businesses with limited budgets, IMSAI has the broadest
range of products offered in the microcomputer market, IMSAI was the first in
the industry to design and manufacture a fully integrated system. The new VDP
line - video data processor - applies the latest microprocessor and memory
technology available to meet the demands of the rapidly evolving commercial
market. IMSAI currently has over 300 dealers in the United States, Foreign sales
are also beginning to represent a significant share of the IMSAI market.
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In the l973, William H. Millard founded IMS Associates, Inc.
The initials stood for Information Management Services [see NOTE above], as its primary service
was consulting in systems analysis and programming. Although no one knew it at
the time, IMS Associates was the embryonic organization of IMSAI Manufacturing
Corporation.
Before he founded IMS Associates, Bill Millard had held
management positions in finance and industry. As these industries began to make
use of computer systems, his interest in computer applications grew. In the
1960's, he directed the design and implementation of major "on-line" information
storage and retrieval systems in Alameda County and San Francisco; was employed
by IBM, and in l969 founded System Dynamics, a computer software company. In
l972, System Dynamics closed operations, having exhausted all of its invested
capital. The one-time sale of the company's main product paid off creditors, but
left nothing for Bill Millard and the other investors.
In May 1972, Bill Millard began doing business as IMS
Associates - as a one-man computer consulting and engineering firm - using his
home as an office. Bill Millard's reputation for success in directing the design
and implementation of large on-line information systems enabled IMS Associates
to win several major contracts from industry and government.
The failure of System Dynamics left Bill Millard with a deep
conviction that the best way to sell software was to put it in "your own box"
and sell the "box." It was a nice idea, but he had neither the capital nor the
experience with which to pursue it.
As a result of a succession of individual custom engineering
and low volume assembly contracts between 1972 and 1975, IMS Associates and Bill
Millard accumulated some capital and a great deal of experience. Initial
contracts were for software only. Then came several that required overall
project management of both electronic engineering tasks and software
development.
In 1974, a client for whom IMS had completed several hardware
and software engineering contracts offered the company a contract to design and
build a "prototype" product based on a microprocessor that could be used to
"computerize" some electro-mechanical bookkeeping equipment, Under this
contract, IMS Associates got its first opportunity to design an entire product,
including the "packaging." This contract introduced IMS Associates and its
engineers to the potential of microprocessors as a device that could be used for
data processing functions, at a time when most people thought they were only
good for automating things like washing machines.
When the client began to receive orders for the product, he
returned to IMS and offered the company a contract to manufacture ten more
units. The carpeted "bank building" offices of IMS Associates became a low
volume assembly facility, and the company gained its final production assembly
experience. Yet still there was no product; no way for the company to get any
residual or repetitive value from what it created, except to seek new
opportunities to "do it again next month."
Then in 1974, IMS Associates got its first opportunity to
have its own product, Another client for whom the company had successfully
completed general contracts, wanted a "work station system" that would do the
complete job for any GM new-car dealership. IMS envisioned needing a CRT
terminal, a small computer, and a printer, with special software. Five of these
work stations were to have common access to a hard disk, which would be
controlled by a small computer.
Since the client wanted to market the product only to the
auto industry, and IMS Associates wanted its own product, a product design
contract was negotiated whereby the client would get what he wanted, with all
rights to market the resulting products to the auto industry. IMS Associates
would have the right to manufacture and sell the product in all the other
markets in exchange for a low engineering price to the client and a royalty
commitment.
It was a contract of major size for both the client and IMS
Associates. A line of credit was arranged with a bank to fund the
development. After over a third of this fund was spent, it became clear to Bill
Millard that in his exuberance and determination to find a way to acquire a
product of his own, he had severely "underbid" the contract, and there was
simply no way to do the job for the agreed-upon amount using standard
minicomputers and specially designed "IMS" interfaces, as originally planned.
Product development was stopped, and in rapid succession, naked mini's and
several one-board computers then being offered by the "traditional" minicomputer
manufacturers were explored and discarded as costing too much.
In desperation, Bill Millard and his chief engineer Joe Killian turned to the
microprocessor. Intel had announced the 8080, and compared to the 4004 to which
IMS Associates had been first introduced, the 8080 looked like a "real
computer".
It was clear that the only technology available at the time
(l974) that could possibly allow IMS to meet the price constraints it was under
was this new microprocessor technology. It was new and untried for true data
processing functions. There was no road map, but the microprocessor seemed the
only way that had any hope of success. Full scale development commenced
forthwith, and the result was the now famous IMSAI I-8080 Microcomputer.
Having designed, built, and installed a working 8080
Microprocessor, IMS was ready to produce its first product. In 1975, IMS placed
a single ad in "Popular Electronics." The response to the ad was overwhelmingly
positive. People sent in orders and money, and continued to do so while IMS
geared up to produce and ship the first kits. IMS, sustained by the faith
of the public in its product, shipped the first 8080 Microprocessor kits on
December l6, 1975.
The first shipment was the result of a great deal of support
and effort from IMS personnel. Somewhere between 20-30 people, their friends,
and members of their families, worked long hours. The atmosphere was that of a
family, The refrigerator was always stocked with food and juice and an endless
supply of Cokes®. Many people who came to help out later joined the company as
employees. With these people and their dedication, IMS entered the computer
field shipping one product; and the product was a success.
Initially IMS products were marketed by mail order. However,
the success of the IMS product was further substantiated by requests for IMS
dealerships. The network of IMS dealers had not been planned nor sought, but a
dealer contract agreement was soon created and several dealerships were signed
on all over the nation. Today, the company leads the industry in the number of
dealers distributing its product (over 300 domestic and foreign dealers). Over
97 percent of sales are made through dealer stores and systems houses.
After the milestone of its first shipment, IMS continued to
expand its product, the number of employees, the amount of building space, and
the number of dealers. It had begun as two offices in a building in
downtown San Leandro. While gearing up to ship its first kits, IMS moved to a
building of its own, in the San Leandro warehouse district, to contain the
kitting operations and the 20-30 people. Growth in an increasingly commercial
market prompted IMS to expand its assembly department and offer more products
assembled. IMS expanded its product tine to include component systems, printers,
terminals, floppies, and software.
In 1976, it became increasingly clear that IMS was a
manufacturing company, not a consulting firm. In keeping with this transition,
IMS Associates became IMSAI Manufacturing Corporation. IMSAI Manufacturing
Corporation thus kept the name of the "parent" - IMS Associates Inc. - and the
spirit of the "child" continued to grow.
Today, IMSAI employs 170 people and is still expanding. IMSAI
has moved again, contained now in two buildings and two warehouses. The primary
address is 14860 Wicks Boulevard; the two buildings at this address house the
administrative offices, technical services, engineering, and the manufacturing
facility for assembled systems.
In l977, IMSAI became the first in the industry to design a
fully integrated system, This system has already expanded to include several
models in the VDP (video data processor) line. The largest of these, the VDP-80,
is a complete data processing center in a single compact package. It retails in
single quantities for only $6995. This system includes a microcomputer, a 12"
screen, one megabyte of floppy disk storage, 32K RAM, and a full keyboard with
separate numeric and function keypads, Other products in this line offer double
density and double track storage on 5-1/4" diskettes, with a storage capacity up
to 780 kilobytes (VDP-44 model), making this the largest capacity mini diskette
system on the market today. The VDP line allows the several hundred computer
stores which carry IMSAI products to meet the demands of this new commercial
market with a single, well-packaged product.
Support from the IMSAI dealer has been instrumental in the
growth and success of IMSAI Manufacturing Corporation. In addition to
dealerships all across the U.S. and Canada, IMSAI created a European subsidiary
to service their dealers in Europe. The dealer, OEM, and systems house network
now encompasses Europe, Asia, Australia, South America, North America, and
Africa. Foreign sales represent a significant portion of the IMSAI market.
Common uses of the IMSAI Microcomputer Systems are:
Small business data processing applications
Data communications and data entry systems
Scientific applications
Computer sciences education and development
Banking and insurance applications
Military and general government applications
Personal computer systems
The "personal computer" industry is very competitive. IMSAI
is now the largest factor in that industry. Competition is both on a price
basis and by product differentiation. New product introductions are frequent,
and proper positioning of products by feature and price is important. IMSAI
distributes through more stores than any company in the industry, and this has
been an important competitive advantage, At any given computer show, a large
proportion of displays there utilize an IMSAI. Further, with the new products
recently introduced, IMSAI has the broadest range of products and the latest
technology on the microcomputer market today.
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