June 5, 1988

SUCH A DEAL: Veteran industry pundit and inventor George Morrow has pulled a coup. The former chief scientist and vice president of Nestar Systems Inc. actually got the networking company to give him money to fund another startup.

“We even got a check and I’m pretty sure the check has cleared,” Morrow quips.

Morrow and his partner, Darrell Ticehurst, another Nestar VP, are getting seed cash from Nestar (which will be a minority stockholder) to manufacture a disk controller with automatic tape backup. Morrow’s new controller plugs the tape directly into the controller, so when disk sectors get dirty, the data spools right onto the tape without the user having to do anything, including load the tape, and with no degradation in speed.

He figures he’ll have the controller manufactured in the Far East, because memory chips are too expensive here. The first product will be for PC/ATs and clones, but Macintosh and PS/2 products may follow.

Morrow’s the guy who, among many other things, invented one of the first useful laptop computer designs. His Morrow Designs company licensed the technology to Zenith Data Systems, which ran away with the laptop market — including Morrow’s — as a result.

After all the ups and downs he’s weathered in the electronics biz, Morrow has become quite a philosopher, even publishing a book in 1984 called “Quotations from Chairman Morrow.” Keep reading….

PREDICTIONS FROM CHAIRMAN MORROW: “I think the computer industry is going to find out where the pain point is for their customers,” says Morrow, referring to the high cost and shortage of DRAMs. “Prices will skyrocket in the next six months; everyone’s saying, ÔWhy should the memory guys make all the money?’ Sometime between December and June, this whole industry is going to crash again, just like it did in 1984. It’s going to die on its own spittle because of the shortages.”

He says it’s nothing new. “The actors change, but the scenes are the same,” Morrow says. “Companies start chasing parts, people begin to accept outrageous prices. Then they say, ÔPrices will only go higher. I’d better get on the wagon now — in fact, I’d better order two or three wagons, and if I get one, I’ll cancel the other two.’”

Every time this happens, he says, “(Chip) companies say they can prevent it, and every time there’s a loophole they forget about and people end up with too much inventory. But it gets worse each time — shortages and glut both. The next one will be a doozer, at least on surplus.”

So here’s the prediction: Morrow says that by September 1989, one-megabit DRAMs will be selling for $2. They’re almost $40 now. “They’ll probably even dip to $1.50. Then I’ll buy some,” he says.

ANOTHER COUP-PULLER: Y’all must remember Seymour Rubinstein, the founder of MicroPro International who’s been around forever and who made WordStar a major force to be reckoned with in the software world. I chuckled when I heard he sold his latest spreadsheet program, Surpass, to none other than industry bad boy Philippe Kahn of Borland International in Scotts Valley.

I don’t know how much he got for Surpass, but I do know that Rubinstein paid some $7,000 for the chance to dunk Kahn into a vat of water at Stewart Alsop’s Agenda ‘88 conference in January. “That’s when we were still competitors,” says Rubinstein. “And the chicken didn’t even show up.”

The deal dissolves Rubinstein’s company, Surpass Software Systems Inc., by year-end. He’ll remain a consultant to Borland and Surpass employees will go to work in Scotts Valley. Rubinstein says he sold out because “it was going to take a lot more money to really have (Surpass) be a real opportunity. And the price of money was too high; (investors) wanted too much of the company.”

MIPS FOR MIPS: Wondering what happened to Phil Lemmons, the Byte Magazine editor-in-chief who kinda disappeared after quitting in October? Good news: Lemmons is starting a new magazine, based in Nashua, N.H. Called MIPS, it stands both for that measure of a workstation’s speed as well as for “Magazine of Intelligent Personal Systems.” He’ll cover the gray area between high-end graphics stations and personal computers from about the $6,000 to $20,000 range. First issue will hit the stands in January 1989.

Lemmons is delighted to be working in such a spanking new field. “It’s going to be great, to focus on this area and not have to look at every AT clone, word processor and spreadsheet in the world,” he says. “We’re only going to look at the stuff that people who want this kind of computing power will need to use.”