Monday, March 23, 2009

Exxon Office Systems: The gigantic database.

Exxon Office Systems (EOS) lost an immense amount of money for Exxon while trying to establish itself in the Office Automation business. Exxon threw in the towel in 1984, but before that, EOS operated the third largest IBM computer installation on the East Coast. (At least, that's what people said.) At that time, IBM mainframe systems were easy to expand, because you could always add (expensive) online disk storage. EOS added a ton of this storage. Maybe their sales were so poor that they had to pay salesmen high salaries. But they added to their operating costs by keeping a data base of every product sold: its location, its owner, its warrantee status, and its (often extensive) repair history.

EOS had no criteria for removing information from this database, it just grew and grew. One director at EOS was particularly annoyed about the cost, for two reasons. First, he thought that there's no point tracking the location of a piece of equipment that any adult can carry around. The equipment that EOS tracked – small printers, tiny Fax machines, typewriters and word processors – was all highly portable. Second, every time a product was sold or maintained, this database had to be updated, at a cost of – get this – $30 per entry (in 1982 dollars). EOS products required a lot of maintenance under warrantee, so this data base was a cost killer. And it was not at all clear what benefits it brought to the company, because Nobody was datamining for marketing strategies, or for ways to hold down costs.
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