Corporate History
Twenty-two-year-old Tim Paterson was hired in June 1978 by SCP's owner Rod Brock. At the time, SCP built memory boards for microcomputers, but after attending a local seminar on Intel's just-released 8086 in late summer 1978, Paterson convinced Brock that his company should design a CPU board for the new chip. Paterson had a prototype working by May 1979, and he took his "computer" over to Microsoft, who were working on an 8086 BASIC, which was working before the end of May. When the board began shipping in November, standalone Microsoft BASIC was offered as an option, but no operating system was available. Digital Research, whose 8-bit CP/M was the industry standard, was working on CP/M-86, but the delay was costing Brock sales. Starting in April 1980, Paterson wrote QDOS (for Quick and Dirty Operating System) over a four-month period. QDOS 0.11 was finished in August 1980, and SCP began shipping in September 1980. The operating system was renamed to 86-DOS in December 1980. Microsoft, seeking an operating system for the IBM PC, bought the rights to market the system to other manufacturers for $25,000 that same month. On July 27, 1981, just prior to the August 12 PC launch, Microsoft bought the full rights to the operating system for an additional $50,000, giving SCP a perpetual royalty-free license to sell DOS (including updated versions) with its computer hardware. Realizing that Microsoft was making significant profit on the DOS operating system, SCP attempted to sell the operating system along with a stand-alone inexpensive CPU (without any other circuitry), which was allowed as per the license with Microsoft which allowed SCP to continue selling the operating system with their 8086-based computers; this operating system was marketed as "Seattle DOS", and the CPU was included in the box.
Thanks to the deal with Microsoft that allowed Brock to package DOS and Microsoft's programming languages with SCP hardware, SCP had its best year in 1982, reaping more than a million dollars in profit on about $4 million in sales.
By 1985, SCP's business had gone under, and Brock decided to sell his company. About the only asset he had left was the license he received when he signed over ownership rights to DOS. Brock planned to sell his license to the highest bidder. He had someone in mind like the Tandy Corporation. After Microsoft objected to Brock's "exaggerated interpretation" of the agreement and informed Brock that his license was nontransferable, Brock sued for $60 million. It was a highly technical case that grew to fill hundreds of pages in the months leading up to trial. The winter 1986 trial lasted three weeks. An out-of-court settlement was reached while the jury was deliberating. Microsoft paid SCP $925,000 and reclaimed the critical license for DOS.
SCP is no longer in business as the market for Intel 8086 systems became dominated by PC compatible computers.
Read more about this topic: Seattle Computer Products
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