Cumulus Corporation

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For other companies named Cumulus, see Cumulus (disambiguation).

Cumulus Corporation
Cumulus Computer Corporation (1990–1993)
Company typePrivate
IndustryComputer
FoundedJune 1987; 36 years ago (1987-06) in Beachwood, Ohio
FounderMartin Alpert
DefunctApril 1993; 31 years ago (1993-04)
FateBankruptcy liquidation
Products
Number of employees
350–450 (1992, peak)

Cumulus Corporation (often shortened to Cumulus Corp.) was an American computer peripheral and system manufacturer active from 1987 to 1993. Based in

Personal System/2 (PS/2) family of computers—mainly RAM expansion cards. It later released cross-platform CPU upgrade cards and memory expansion cards for other platforms besides the PS/2. Beginning in 1990, the company began trading as Cumulus Computer Corporation and began releasing complete systems of their own. Initially a success story for the tech industry in Cleveland,[1] a botched stock launch in 1992 proved disastrous for the company's ailing cash flow
situation, and in 1993 the company was liquidated amid massive debt to suppliers and lenders.

Foundation (1987–1988)

Cumulus Corporation was founded in

Personal System/2 (PS/2), a family of computers introduced by IBM in April 1987, intended as the successor to their earlier IBM PC line.[4]: 37  He funded the startup of Cumulus with his own money,[6] purchasing an office in San Diego, California, to house Cumulus' full-time engineering staff.[3]

Cumulus released its first products in August 1987: a multifunction board for the PS/2 Models 50 and 60 called CuRAM and an external 5.25-inch floppy disk drive called Stepping Stone. The Stepping Stone was released to address the PS/2's lack of a 5.25-inch floppy drive (IBM had adopted the newer 3.5-inch standard, developed by Sony Corporation, for the PS/2). Cumulus paired the drive with software and a controller card—the latter containing a specially burned PROM with microcode allowing the Stepping Stone to act as the primary (A:) drive. This opened the PS/2 to a larger back-catalog of IBM PC software; the installers of some contemporary applications on 5.25-inch disks, like Lotus 1-2-3, required being run from the A: floppy drive, as a form of copy protection.[7]

The CuRAM multifunction board was in its bare state a

PC DOS.[2] In DOS environments, LIM EMS is useful for storing large blocks of data, while EEMS could be used to run multiple DOS programs concurrently. Critically, more than one CuRAM board could be installed and ran in a PS/2 at the same time, increasing the maximum memory to 16 MB. For the Model 50, this meant that that system could possess more RAM than IBM's prescribed upper limit of 7 MB, while leaving one of its three expansion slots open.[7] Cumulus accomplished this by getting permission by IBM to use one of their reserved vendor ID for the CuRAM.[9]

Intended for the

1 µm process of semiconductor fabrication with the CuRAM in August 1987.[9] In late March 1988,[10] Cumulus released the CuRAM 80-8,[11] a memory expansion card for the PS/2 Model 80 and the second 32-bit memory card ever released for the PS/2 (following after a similar product by AST Research). The CuRAM 80 supports up to 8 MB of RAM per card, upgraded in 2 MB intervals from the stock integrated 2 MB. Like its predecessor, the CuRAM 80 has sockets for the peripheral-port-addition and modem daughtercards. The CuRAM 80 was unveiled concurrently with an upgraded version of the original 16-bit CuRAM board—the CuRAM-2[12]—which increased the maximum amount of RAM per card to 12 MB (up from 8 MB).[13] The CuRAM-2 was offered in two different base configurations, with either 2 MB and 6 MB of soldered-on stock RAM.[12]

Sales of the CuRAM family were less than expected, despite high interest. Alpert attributed this to widespread confusion over product specifications and compatibility among memory expansion cards in the PS/2 marketplace.[14] By the end of 1987, Cumulus achieved a modest annual sales figure of $589,000.[15]

Diversification (1988–1990)

Amid a

80387SX, was released in summer 1989.[23]

In December 1988, Cumulus formed a joint venture with

Advanced Micro Devices.[28]

While a memory expansion board for the Macintosh II announced by Cumulus in November 1987—in an early deviation of their all-PS/2 business approach[29]—proved to be vaporware, the company did release a 44-MB portable SCSI hard drive for the Macintosh, named the RD-44, in late 1989.[30]

Computer systems (1990–1992)

Although Alpert in a 1987 interview expressed wanting to avoid competing with the computer manufacturers that Cumulus supported with systems of their own,

i486DX-based machine, the Cumulus/486, in May 1991—the latter available in tower, desktop, and pizza box form factors.[40]

In August 1991, Cumulus introduced their WorkBox line of computers, the first entry being the WorkBox SX/40, a desktop computer running an

SCAT chipset by Chips and Technologies, and the computer shipped with a Paradise (Western Digital) SVGA graphics card. It received a mixed review in Computer Shopper, who particularly panned Cumulus' shorter-than-average 10-day return policy.[43]

In July 1992, Cumulus introduced the GLC/MC line, a desktop computer with a

cellular phone, in a corporate refocus toward mobile computing.[48]

Liquidation (1992–1993)

By the end of 1991, Cumulus reached between $116 million and $121 million in sales and employed between 350 and 450.[15][48][1] In May 1992, the company filed to go public with the SEC, mediated through Merrill Lynch & Company and Dillon, Read & Company, and issuing 2.5 million common shares[49]—later increased to 2.8 million shares, at a maximum price of $11 per share, ($31.6 million).[15] In anticipation of their stock launch, Bill Lowe—the former president of IBM's Entry Systems Division—joined Cumulus' board of directors and was named vice chairman.[50]

Despite keeping appearances of a thriving company, Cumulus was crumbling internally under poor cash flow and externally from the fierce price war in the desktop computer market in the early 1990s, in which bigger players in the market lowered the prices of their systems far below what smaller firms like Cumulus could afford to compete against.[15] This, combined with computer companies under-performing in the stock market in 1992, compelled Cumulus to rescind their initial public offering.[1] This had the effect of exacerbating their cash flow dilemma,[15] and with the planned retirement of their growing debt to lenders and suppliers foiled by the lack of liquidity that their IPO would have offered, Cumulus quickly became insolvent.[1] Over the summer of 1992, the company canceled plans to move into a larger 165,000-square-foot office in Solon, Ohio, and in September 1992, Cumulus furloughed 170 workers in production and management[15]—laying them off entirely the following week.[51]

Four of Cumulus' creditors had filed suit against the company by late September 1992. Arrow Electronics, an electronic component distributor then headquartered in

Toshiba America Electronic Components for over $37,000.[54] Although Cumulus hired a local consulting firm specializing in struggling businesses back in September,[51] by November it became known through ex-employees that Star Banc of Cincinnati—a secured lender whom Cumulus owed $9 million—was in talks with the Cumulus to liquidate the company.[54]

I consider [Martin Alpert] to be an authentic business genius with the capacity to build two highly successful, high-technology companies. He just lacked a sense of timing.

Michael Blumberg, speaking of Cumulus' financial troubles in 1992[55]

In October 1992, Cumulus sold their memory products division to Repco Electronics of Solon for an undisclosed amount. The resulting joint venture was named Cumulus Memory Products; Repco president Michael Blumberg accorded presidency of Cumulus Memory to Leonard Applebaum, previously the chairman of CAM/RPC, an electronic components distributor based in Highland Heights. Blumberg and Applebaum planned to rehire 25 to 50 of Cumulus' laid-off employees.[56] Cumulus Memory, which had won its former parent company $45 million in sales in 1991, had its headquarters located within CAM/RPC's Highland Heights office, and by November, it had recovered 27 of Cumulus' ex–employee base.[55]

Cumulus, erstwhile under ownership of Star Banc as "crisis managers",

Hyundai Electronics for $1 million, and Oki for more than $883,000. Following these suits, Cumulus plead to the Cuyahoga County Common Pleas Court to appoint a receiver to liquidate the company.[59] The courts approved liquidation between January and March 1993, and Cumulus filled for Chapter 11 bankruptcy in turn. In early March, eighty of Cumulus' former employees filed a class action suit against Star Banc, claiming $236,000 in garnished wages and backpay for unused vacation time during Star Banc's management of Cumulus.[57] Cumulus finally dissolved on April 1, 1993, with an auction supervised by Cleveland-based Rosen & Company of the company's 280 personal computers and thousands of peripherals.[60]

Notes

  1. Lotus Development, Intel, and Microsoft
    , the three companies responsible for the LIM EMS standard

References

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Further reading

External links

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