Not Sony’s Way
Since the company’s founding in 1946, Sony has largely been driven by physicists and materials specialists whose style of innovation was to take key enabling devices and turn them into new and useful consumer products. A classic example of Sony’s eye for hardware’s “killer app” is the transistor, which Sony turned into its first hit product, pocket-sized radios. And it was Sony (after spending 13 years and $200 million) that first transformed the charge-coupled device (CCD) into a marketplace success-in the form of its best-selling camcorders.
Although wildly successful, Sony’s pattern of innovation did not extend to computers. Sony management had never put much effort into computer R&D, believing the company’s core business would always be manufacturing groovy audio-visual equipment. The strategy posed a stark danger: that Sony would become irrelevant in the emerging digital world.
That danger was particularly clear to Toshi T. Doi, an expert in digital audio who had played a key role in the development of the compact disc player. Doi arrived at Sony’s computer business group in May 1984, just in time to witness the launch of Hit Bit, a home PC that he wryly describes as “the last eight-bit machine in the world.” Other failures followed, but undaunted by Sony’s computer allergy, Doi and a group of 11 engineers proposed developing a serious, low-priced engineering workstation called NEWS. “It was our last card,” Doi recalls. “If it had failed, that would have been all for Sony” in the computer area. Launched in January 1987, NEWS was a big hit in Japan, quickly taking top share in the local market (though it tanked in the United States, bested by superior products from the likes of Sun Microsystems).
Though NEWS was successful, Doi was dissatisfied. “When I opened the box,” he recalls, “it was nothing but assembly-we were buying CPUs from Motorola, licensing Unix from UC Berkeley. There wasn’t any Sony original technology included, and I thought, ‘This is not Sony’s way.’” Where, wondered Doi, was the innovative technology core that could drive new products and markets, just as the transistor and the CCD had?
Working with Unix had alerted Doi to the importance of the Internet, and he foresaw that in the 21st century, networks would connect billions of computers. In April 1987, Doi asked his management to let him establish a software lab to focus on network design. NEWS’ success made Sony management receptive to Doi’s proposal. He got funding and a new mandate: Think long range.
As he began putting his group together, Doi had PARC very much in mind. During the 1970s, PARC was a place where researchers enjoyed unique freedoms. It had proved an excellent research strategy. From PARC came the graphical user interface, the laser printer and the Ethernet. To get his project up and running, Doi asked his friend and fellow amateur jazz musician, former PARC luminary Alan Kay, for guidance. At the same time, Doi approached Mario Tokoro, a Keio University professor known for his strong technical background in operating systems and networking, as well as for his visionary streak.
Tokoro remembers that Doi’s timing was perfect. “At that time, as a professor, I was a little frustrated,” Tokoro says. “The PhD students I produced were not given a chance to fully exhibit their performance even in the research labs of top-level Japanese firms. Bureaucracy and strict seniority systems were so strong. Originality was not considered important. And I was thinking whether I should start something.” The pair saw eye to eye-networks were the future, and intellectual freedom could make Sony a player. Doi offered Tokoro the job of lab director.