American Power Conversion Corporation - Origins

Origins

APC began as a failure. The company was founded by three electronic power engineers from the Massachusetts Institute of Technology (MIT), two of whom—Neil E. Rasmussen and Emanuel E. Landsman—remained with the company during its formative decades. Landsman spent 15 years at MIT's Lincoln Library before cofounding APC, working in the Space Communications Group from 1966 to 1977 before joining the Energy Systems Engineering Group. Rasmussen joined Landsman at the Energy Systems Engineering Group in 1979, spending two years there before starting APC. APC was founded to make solar power products, but the business idea began to show its fallibility not long after APC was incorporated in March 1981.

The company floundered during its first months of existence, unable to find a product to sustain its operation and precariously reliant on government funding. In 1982, APC, in a desperate attempt to stay alive, began making lead batteries, designing its batteries to serve as backup power supplies to personal computers. The batteries were designed to provide temporary power in the event of a momentary power blackout or surge, thereby giving the computer user time to save data before it was otherwise lost. The foray into lead battery manufacture was a sideline venture, but soon making backup power supplies became the central focus of the company. In 1984, government funding and incentive programs for solar research began to disappear, portending the worst for APC. The company's management responded by introducing its first uninterruptible power supply (UPS) product the same year. The 750, using a lead-acid battery, provided power surge protection and backup power for personal computers, local area networks (LANs), and engineering workstations. The decision to shelve its solar power business and enter the power protection business not only saved the company from bankruptcy but also moved it into a market capable of creating a billion-in-sales company. APC became that company, the first company to generate $1 billion in revenue by manufacturing and marketing UPS products.

When APC entered the UPS market, no one either outside or inside the company had any idea how large the market for UPS products would become. The decision to enter the field was a decision to be relished in hindsight. Personal computer usage was in its infancy at the time of the 750's introduction. Computer networking, the Internet, and other factors that fueled the growth of the UPS market trailed considerably further behind the maturation of the personal computer market. The nascence of the markets that would come to depend on UPS technology helped APC considerably during its early years, allowing the company to secure a foothold without fear of competition from large computer companies. Further, the technology inside the 750 and its successors discouraged competition from another direction. The power supply of a UPS consisted of a lead-acid battery, circuitry designed to even out surges and lulls in the power, and a switch to detect a lapse in incoming power and automatically turn to the battery for backup. The electronic circuitry in the power supply discouraged conventional battery makers from entering the business. APC was shielded from larger, more established competition by the nature of its business, allowed to operate freely in a market perceived to be too small to entice computer companies and too sophisticated to seduce battery manufacturers into entering the fray.