Control Data Corporation
Legacy Trees Project
This is a preliminary report prepared by Mike Moore, director of the William C. Norris Institute, with assistance from many individuals, and released on October 12, 2007, at the Celebration of the 50th Anniversary of the Founding of Control Data Corporation. It is meant to be a starting point for contributions by all who have knowledge of CDC-related “legacy” companies in the following categories:
- True spin-offs, in which CDC assets were transferred to create a new company;
- A transfer of CDC assets to an existing company;
- New companies provided with seed capital investments by CDC or one of its economic development organizations, and
- Companies started by ex-CDC people.
Spin-offs of CDC Assets to Create New Companies:
Arbitron – Ceridian media info service division spun out as a separate company in 2001 to shareholders
Ceridian—In 1992, Ceridian emerged as an information services company from the restructuring of its predecessor company, Control Data Corporation. Beginning in 1990, Ceridian’s predecessor company narrowed its focus to three principal businesses: information services, defense electronics and computer products. As part of the settlement of an anti-trust lawsuit against IBM, Control Data had acquired the Service Bureau Company, which became the forerunner of Ceridian’s present-day employer services business.
Commercial Credit— Spun off in 1986 to Sanford (Sandy) Weill, who did an IPO and then acquired Gulf Insurance, Primerica, and Travelers Insurance and renamed corp. Travelers Group, which in 1998 merged with Citicorp and became Citigroup.
Capital Dimensions Venture Fund—1987 spin out of Control Data Community Ventures Fund, a small business investment corporation (SBIC), managed by Tom Hunt and Dean Pickerel. The fund invested in more than 50 companies and was sold in 1998 to Medallion Financial and renamed Medallion Capital.
Control Data Systems—1992 spin-off of CDC computer products business, under CEO James Ousley, was sold to BT Group and became Syntegra, a subsidiary of BT Global Services. Remainder of Control Data, focused on computer services, was renamed Ceridian.
Drake Training – Spin-off of PLATO Testing and Certification Centers by Nasser Kazeminy and Babu Aharam, and later sold to Sylvan Learning.
Imprimis—1988 spin-off of Control Data Magnetic Peripherals hard drive business, was sold to Seagate Technology in 1989.
Institute for Advanced Technology – Started by Steven Shamblott in 1989 with rights to PLATO technical training technology, provides employee training on proprietary learning system.
Quorum Group Inc. —Spin-off of the Control Data antitrust litigation support team by Nasser Kazeminy in 1966, it was sold to Lanier Worldwide in 1997 and then reacquired in 2002 as Quorum Litigation Services LLC, which was sold to Kroll Ontrack in 2004.
StayWell—Started by CDC in 1978 as an internal wellness program based in the PLATO program, and then marketed to other corporations, it was bought out by John Tarbuck and other managers in 1989 and continues as StayWell Health Management.
XP Systems – Spin-off of credit union division to Nasser Kazeminy, provided turnkey banking services to more than 300 major credit unions nationally and was sold to a Fortune 500 company. A spin-off, Digital Insight, developed Internet-based home banking services now used by more than 5 million customers.
Zytec—Spin-off by Ron Schmidt and Larry Mathews to provide power conversion products, it was sold in 1997 to Computer Products.
Transfers of CDC Assets to Existing Companies:
Computing Devices International, division of Control Data with subsidiaries in Canada and other countries, was sold by Ceridian to General Dynamics in 1997.
Cypress Semiconductor Minnesota—Founded in 1982 by TJ Rodgers, the company purchased Control Data’s CMOS (complementary metal oxide semiconductor) business.
Elex—Touch-screen voting system developed by Control Data/Ceridian subsidiary Computing Devices Canada, sold to Danaher Systems, a U.S.-based election systems company.
Openvision—Acquired backup software solution Aria*BackupPlus and CDC Storage Management team in 1993, and in 1997 Openvision was acquired by Veritas, which in 2005 was acquired by Symantec.
Seagate Technology—Purchased CDC spin-off Imprimis, the hard drive business, in 1989.
Telehealth Solutions—Telemedicine systems and software developed by Computing Devices Canada, became the largest supplier in Canada for solutions that put remote sites in direct multi-modal contact with the country’s health care practitioners; it was sold to General Dynamics in 1998 as part of Computing Devices International.
TRO Learning (now Plato Learning)—Acquired rights to the PLATO basic skills courseware.
Companies and Organizations Started with CDC Funding & Assistance:
Alzheimer’s Disease and Related Disorders Association—Started in 1980 by CDC employee Hilda Pridgeon.
City Venture—Urban economic development organization, started in 1978, with investments by CDC and other non-profit and for-profit organizations. It was combined with Rural Ventures in 1985 and all shares acquired by Patrick Gorman.
Cray Research—Started by Seymour Cray in 1972 with $250,000 seed investment from CDC. Cray Research merged with Silicon Graphics in 1996. Seymour left CR to start Cray Laboratories from 1979-82, and Cray Computer Corp. from 1989-95, and then SRC Computers Inc., which still exists.
Fourth Shift—Startup by Mel Stuckey and Jim Caldwell with CDC seed investment, provider of enterprise software for the manufacturing industry.
Jacobs Wind Electric Co.—Control Data became a minority shareholder in this manufacturer of wind generators in 1970 and acquired controlling interest in 1982, establishing Renewable Energy Ventures Inc. to acquire land, permits and planning of wind farms. Acquired Winco, a LeCenter, Minn. Manufacturer of alternators and portable generators and changed corp. name to Earth Energy Systems Inc. From 1980 to 1986 EESI sold more than 1500 wind energy plants in the U.S. and 8 in other countries. It also set up three wind farms in California and two in Hawaii. CDC sold off the EESI technology in 1986, with rights to wind generators being acquired by Wind Turbine Industries Corp., a Minnesota corporation started by Archie Pavek.
Magnetic Data—Disk pack assembly and refurbishing company started in 1982 by James Legus with CDC investment.
Minnesota Cooperation Office for Small Business and Job Creation—founded in 1979 by W. C. Norris of Control Data and Willis Drake of DataCard, with other grants from individuals, companies and government. Under the leadership of Ted Johnson, MCO helped start 38 companies with seed capital investments and business assistance. It was dissolved in 2005.
Minnesota Seed Capital Fund—a corporation founded in 1980 by CDC and other members of the Minnesota Business Partnership to invest in innovative companies at an early stage of development, with an initial capitalization of $2.5 million.
Rural Ventures—Rural economic development organization founded in 1980 by Control Data with individual, non-profit, and for-profit shareholders. It was combined with City Venture in 1985, under Rural Ventures President Patrick Gorman, who bought out the shareholders of both organizations.
VTC—Collaborative venture with Fairchild Computer to develop new semi-conductor technologies. CDC executive Larry Jodsaas became president in 1988 and acquired VTC in 1990. Sold to Lucent in 2000, but retained custom fabrication services as PolarFab, which was sold to Sanken in 2005.
William C. Norris Institute—Non-profit founded in 1987 to advance education technology and small business development, with technology, assets and funds donated by CDC. In 2001 became part of the business school—now the Opus College of Business—at the University of St. Thomas. From January 2001 through October 2007 the Norris Institute invested $2.4 million into 25 companies, four of which have since been acquired by other companies.
Companies Started by People After they Left Control Data:
Ancor—Started by former CDC employees Anderson and Cornelius. Sold for $2.5 billion.
Apertus Technologies – Formerly Lee Data, develops data integration and middleware products. In 1995 acquired MQView, middleware for developing and managing enterprise-wide applications on IBM’s MQSeries networks, and BlueLine Software. Located in Eden Prairie, Minn.
Astrocom—Started in 1968 by former CDC and Univac employees Earl J. Hansen and Sidney N. Jerson, with Robert Rife of Fabri-Tek. Mail product lines are modems, line matrix switches and automatic dialers. Located in Plymouth, Minn.
Authorware—Started in 1987 by Dr. Michael Allen, a PLATO contributor. Merged with MacroMind/Paracomp in 1992 to form Macromedia, which merged with Adobe Systems in 2005.
BlueLine Software—Started in 1985, acquired by Apertus Technologies in 1995.
Cybernetics—Founded in 1978 in Yorktown, Virginia, specializing in the design, manufacture and direct sales and service of performance disk and tape storage solutions.
Data 100—1969 startup by Ed Orenstein, former manager of Control Data’s Display Division, with Jerry Eckberg and Steven Shamblott, to manufacture computer terminals.
DataCard—Founded in 1969 as a spin-off of Data Products, by Willis Drake, one of the original founders of CDC. The business was embossing and encoding credit cards, and first customer was American Express. Sold to the Quant family of Germany in 1987.
Datacom International—Founded by Don Roepke in 2001, provider of on-demand SaaS software for the manufacturing industry.
FileLink Corporation—Co-founded by Rick Berglund, former CDC/Ceridian executive, to provide storage management software for the health care and graphic arts markets.
LSC—Started by former CDC employees Paul Miller, Harriet and Crouse, was sold to Sun for $80 million.
Minneapolis Leasing—Started by Nasser Kazeminy to provide a leasing option to Control Data peripherals customers, it became the largest private leasing company in the U.S.
NOREX, Inc.—Started by Ron Haberkorn, NOREX, Inc. helps companies dispose of used data processing equipment. They are a unique consortium of IT professionals from over 1,300 organizations across North America. Since 1980, NOREX, Inc. has provided IT organizations with "a better way" of leveraging each others’ experiences, regardless of industry, size of installation or the technical environment.
Nuspeed—Started by Marc Cree (ex-CDC) and Clint Jurgens, was sold to Cisco.
OnTrack Computer Systems—Started in 1985 by five former employees of the CDC peripherals division, led by Mike Rogers, CEO and Chairman. Developed Disk Manager software to automate installation of hard drives, sold to OEMs and captured 80 percent of worldwide market. Added data recovery services in 1987 and became Ontrack Data Recovery in 1988. Went public in 1996 as Ontrack Data International, and merged with Kroll Inc. in 2002.
Rorke Data—Startup by ex-CDCer Herb Rorke