Tallgrass Technologies

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Tallgrass Technologies Corporation was the first manufacturer to offer a hard disk drive product for the IBM PC. It was a Kansas City based microcomputer hardware and software company founded in December 1980 by David M. Allen. The product was initially sold in Computerland stores, alongside the original IBM PC. Tallgrass added tape-backup systems to its product line in 1982.

Tallgrass was significant in the history of the PC because IBM shipped its PCs for almost two years without any hard-drive option. The IBM name attracted the makers of larger, professional software products that required a hard-drive's speed and capacity. The early availability of the Tallgrass hard-drives enabled those software products to make earlier entrances into the PC market. The parallel introductions, of the IBM PC with the Tallgrass hard-drive, catalyzed the growth of the PC market compared to what it would have been without the hard-drive.

Tallgrass was one of Seagate's earliest customers, initially purchasing ST-506 drives from Shugart Technology before the name changed to Seagate. The Tallgrass product was designed around the ST-506 hard drive, which required a separate controller between the drive and the computer (unlike hard drives today.) Tallgrass also briefly bought drives from Texas Instruments.[1] Later, Tallgrass bought most of its drives from Miniscribe and for a while was Miniscribe's largest customer.

History[edit]

While at a previous employer, in 1974 Allen had developed a 100%-digital floppy-drive controller and in 1980 a prototype hard-drive controller, both using an unusual data-separator he had patented.[2] Both controller designs used GCR-encoding, which supported slightly higher linear densities and enabled higher storage capacities than conventional MFM. Both were developed before Western Digital offered controller chips for these functions. During a recession, in December 1980 Allen left to form Tallgrass, with his former employer's permission to take the controller designs with him. Tallgrass' initial revenue stream in 1981 was provided by a contract with SofTech Microsystems for development of a 68000 interpreter for the UCSD Pascal software system. Allen had previously written the 6809 interpreter for UCSD Pascal, before starting Tallgrass.

By the spring of 1981 the hard drive controller design was complete. Tallgrass initially tried marketing Allen's unorthodox hard-drive controller alone, to system manufacturers. In mid-1981 it was decided to instead market a complete, external hard-drive subsystem (hard-drive + controller) to computer dealers. Tallgrass first developed subsystems for the Xerox 820 computer, an Alpha Microsystems computer, and was working on an Apple IIe version when IBM announced the PC in August 1981.

Tallgrass was able to supply its product for the PC, in production quantities, at the same moment that IBM started revenue shipments of PCs in October. This was because Tallgrass' product was already in production and needed only a simple interface card and PC DOS driver software to attach it to the IBM PC.

Allen discovered they already had the PC DOS driver. As part of the development of its subsystem for the Alpha Microsystems computer, Tallgrass developed a driver for Seattle Computer Products' 86-DOS[3] operating system. 86-DOS was renamed PC DOS when Microsoft bought the rights and licensed it to IBM.

A partner in the local, Lenexa, Kansas Computerland store, Jim Fricke,[4] gave Allen access to their IBM PC demonstrator when it arrived on a Friday, a few weeks before IBM's PCs became available for sale. With information gleaned from the demonstrator, Allen built a prototype interface card over the weekend and successfully tested the card and the driver on the following Monday. The same Computerland store's other partner, Bruce Burdick, was a member of Computerland's New Products Committee and helped get the Tallgrass product embraced by Computerland nationwide.

With IBM's entry into the market, Allen invited a friend, Steven B. Volk[5][6] to join Tallgrass as Executive V.P. of Sales and Marketing. Volk assembled a sales organization and started an advertising campaign, initially incorporating pictures of scarlet macaws that he and his wife raised in their basement.

With the support of Computerland and helped by high gross margins of up to 35%, Tallgrass grew very rapidly. Early in 1982 a tape backup product was added to the product line, another first for PCs, using an out-sourced Archive Corp. tape drive and 3M cartridges. Manufacturing cost was low because the unorthodox controller design was shared by both disk and tape and, being all digital, it was easily reduced to a single LSI microchip. Gross revenue peaked in mid-1985 at an annualized rate of $70M and there were 400 employees at the start 1986.[7] By this time significant competition had arrived in the marketplace and Tallgrass' sales had plateaued.

To finance Volk's plan to revive sales growth with an enlarged marketing push, Allen accepted the overtures of venture capital. In mid-1986, Gateway Associates L.P. in St. Louis took the lead and brought in the major investor, Reimer and Koger Assoc., pension fund advisor for KPERS (the Kansas Public Employees Retirement System.) Sales continued to falter and profits sagged while management and investors disagreed over a course of action.[8]

In mid-1987 the investors forced Allen out and took control of the company.[5] Volk left later the same year to go to PrairieTek.[9] Allen brought the investors a $4M buyout offer from a California competitor. A letter of intent was signed in July but allowed to expire in August.[10][11] By November 1987 the investments reportedly totaled $7M, employment was down to 130, and annual sales revenue far below $40M.[12]

Tallgrass had 1992 sales of $9.3M and was "said to be profitable."[13] In 1993 the investors sold what was left of Tallgrass to Exabyte Corp. for $1.5M.[13] By that time, KPERS investments in Tallgrass totaled over $14M.[14]


Not long after the acquisition, Exabyte sold the "Tallgrass Technologies" name to the former Tallgrass V.P. of International Sales, Jim Worrell,[15] who then renamed his own import/export company using the Tallgrass name. Today his company has new ownership and a different charter but continues operating under the Tallgrass Technologies LLC name.

References[edit]

  1. ^ "Seagate ST-506". 9th paragraph. Retrieved 20 November 2011. 
  2. ^ "U S Patent: 4245264". USPTO. Retrieved 16 January 2012. 
  3. ^ Paterson, Tim. "A Short History of MS-DOS". Paterson Technology. Retrieved 19 November 2011. 
  4. ^ "Six inducted into UMR Academy of Electrical and Computer Engineering". Missouri University of Science and Technology. Retrieved 17 January 2012. 
  5. ^ a b Cuff, Daniel. "Tallgrass Gets a New President". Business. paragraph 5: The New York Times. Retrieved 19 November 2011. 
  6. ^ http://www.vmedia.net/pr-back-volk.php Steven B. Volk:VMedia
  7. ^ Rosenberg, Martin (July 8, 1987). "California firm announces plan to buy Tallgrass". The Kansas City Times. 
  8. ^ Siegmann, Ken (July 7, 1987). "Disagreement Over Corporate Philosophy Results in Executives' Dismissal at Tallgrass". PC Week. p. 129. 
  9. ^ Forgrieve, Janet (November 9, 2002). "ENTREPRENEUR GRASPS VALUE OF TIMING, RISK". ROCKY MOUNTAIN NEWS. Retrieved 22 November 2011. 
  10. ^ Rosenberg, Martin (August 22, 1987). "Bid to Buy Tallgrass is Shelved". The Kansas City Times. 
  11. ^ Tighe, John. "CMS's Tallgrass Acquisition Plan Falls Through". The L.A. Times. Retrieved 21 November 2011. 
  12. ^ Rosenberg, Martin (November 19, 1987). "Tallgrass Technologies says business turnaround is near". The Kansas City Times. p. D-3. 
  13. ^ a b Zipper, Stuart. "Exebyte, Everex in buy/sell sprees". Electronic News. IDG. Retrieved 19 November 2011. 
  14. ^ "The Clinton Pension Grab". Policy Analysis. U.S. Congress Joint Economic Committee. Retrieved 19 November 2011. 
  15. ^ "Jim Worrell". LinkedIn. Retrieved 19 November 2011. 

http://www.entrepreneur.com/article/52678#

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