Goodbye CompuServe

Back in the heady days of the 90s, I worked at CompuServe, and I was there for the AOL purchase.

Since CompuServe is now officially dead, I thought I'd write up some trivia that I remember. Some of this stuff should go in a textbook on how to get complacent and kill yourself as a business.

While I was there, CompuServe was owned by H&R Block. That might seem like an odd match; it was. The overly conservative management team there was not ready to deal with the changes required to adapt to the Internet era. Instead, they came out with Wow!. We used to laugh and say that the "tc-chk" noise that it made when you clicked on a "pog" was really coming from a "User Click Interaction Specialist II" (yes, there really were titles like that) sitting at a microphone in Columbus, Ohio.

CompuServe had some long-term investment in DEC 10 technology. So much so, that when DEC (Digital Equipment Corporation) decided to discontinue them, CompuServe started making their own-- they had a hardware team that managed to shoehorn a DEC 10 into a pair of VME boards with a mess of VLSI chips. These were used for at least half of everything that made up CompuServe at the time: all the Terminal Access Nodes (TANs), the "chatrooms" (which had exactly 40 channels-- it was designed to mimic a CB radio), etc.

The TANs were what sat in various closets/server rooms around the country, and had modems hanging off them; they handled all the local dialup for which CompuServe charged so handily. They also handled another function: Credit Cards.

One of the years that I was there, I remember some senior manager coming out from Columbus, and sharing some of the following facts (and, I'll admit that things have gotten a little hazy in the intervening dozen years):

• 1 billion credit card transactions were handled on the CompuServe network.
• The revenue per employee was something like $180,000
• CompuServe had been logging a 20% CAGR for something like 20 years. Note to the wise: I've seen lots of companies tank after making a statement similar to this.
  

Some additional bits that I remember:

• The entire (okay, maybe not entire) network ran on X.25. This made for amusing things like dialing into a TAN, and the tan giving you a PPP (Point-to-Point Protocol) connection, but this really worked by giving you a direct connection to a server in Columbus that actually hosted your PPP connection. The connection from the TAN to Columbus was over X.25. So you had an X.25 connection that PPP rode on top of.
• CompuServe really did have a good network, and I suspect, without looking, that CompuServe Network Services is still around in one form or another. The only really weird bit was the X.25 stuff.
  

Where did CompuServe go wrong? I think that the biggest hint should be in the DEC 10 hardware. They started to go wrong when the decision to stay with the old hardware, even when it meant that they had to do their own hardware engineering. Forget that the Internet was going into exponential growth: they ignored Moore's Law.

I'm assuming that they did this because they had a comfort level with rocking the 36-bit processor. In fact, when the question was asked, CompuServe management responded with some vague platitudes about the benefits of a 36-bit platform. I don't suppose it was ever really evaluated properly whether making hardware was part of the core business.

The conversion pain should have happened in the mid 80s, when there was a chance. Instead, systems calcified around a dead architecture. When someone finally saw the handwriting on the wall, the possibility of change was gone.

CompuServe, I believe, was a victim of their own success; there was a prevalent attitude of imperviousness (20% CAGR for 20 years!), fueled by the fact that they were printing cash. This was then compounded by the fact that they were owned by a financial services firm, where the dominant paradigm seems to be to leave something that is making money alone (current financial crisis, anyone?).

Even though it was clear that this had to happen eventually, I'm still sad to see CompuServe go. I worked with many great, smart people there, and learned a tremendous amount about internet scale engineering.