Nixdorf Computer AG – From the leader of the German computer industry to a nametag on ATMs

Which companies come into your mind when you think about computers? Most likely, you think about Lenovo, HP, Apple or Dell. Those 4 companies currently account for around 70% of the global PC sales, measured in units shipped. Maybe, if you are a little bit familiar with the history of computers, you might also remember that IBM once had a large PC business, but then sold it to Lenovo. Other names like Compaq or Unisys may still sound familiar but completely disappeared from the hardware market.

A name often forgotten among the big names of the computer industry is Nixdorf. The German company named after its founder Heinz Nixdorf used to be the world’s sixth largest computer producer, after a merger with Siemens’ IT branch in 1990. How could one of the largest European players in the industry sink into oblivion?

Let’s start about 50 years earlier when Heinz Nixdorf had the idea for a programmable electronic calculator. With an initial investment from the German energy provider RWE, he was able to equip a small lab and could soon deliver the first calculators to various customers, mainly larger producers of accounting machines.

After acquiring the production facilities of his former largest customer in 1968, Nixdorf began selling tabulating and accounting machines as well as the first computers under his own name. Following this acquisition, the company experienced rapid growth. By 1985 Nixdorf had subsidiaries in 44 countries and employed more than 23,000 people.

In the 1980s, the IT industry experienced some turbulences. The development of exchange rates resulted in a large competitive advantage for American computer companies. Besides that, hardware and software separated into two different markets with different business models prevailing. The hardware industry was now turning into a fierce price competition with just-in-time manufacturing as the underlying production methodology.

Despite these developments, Nixdorf was bound to production structures that required large inventories. This buffer turned out to be very dangerous in a fast-moving hardware market and resulted in uncompetitive production cost.

In 1986, Heinz Nixdorf died unexpectedly from the consequences of a heart attack. He was followed by Klaus Luft, who could announce growing revenues and record profits for a last time. However, the abovementioned problems and rapid developments in the IT industry soon began to turn out in enormous losses.  In 1990, the Nixdorf owners were forced to merge the company with Siemens’ IT branch to avoid bankruptcy. Eight years later, the former Nixdorf ATM branch was sold the American company Diebold, which still manufactures all their machine tellers with a Diebold-Nixdorf nametag on them.

So maybe, the next time you make a withdrawal, see if you find the name Nixdorf on the machine. You might have come across one of the last leftovers of what used to be one of the most important and innovative computer manufacturers in the world.

Sources:

Costello, K. and Rimol, M., 2020. Gartner Says Worldwide PC Shipments Grew 2.3% In 4Q19 And 0.6% For The Year. [online] Gartner. Available at: <https://www.gartner.com/en/newsroom/press-releases/2020-01-13-gartner-says-worldwide-pc-shipments-grew-2-point-3-percent-in-4q19-and-point-6-percent-for-the-year> [Accessed 4 October 2020].

Dunsch, J., 2018. Nixdorf Computer: Die Gefallene Computermacht Deutschland. [online] FAZ.NET. Available at: <https://www.faz.net/aktuell/wirtschaft/digitec/nixdorf-computer-die-gefallene-computermacht-deutschland-15874835-p2.html> [Accessed 4 October 2020].

Heinz Nixdorf MuseumsForum, n.d. HNF – Die Unternehmensgeschichte Der Nixdorf Computer AG. [online] Hnf.de. Available at: <https://www.hnf.de/dauerausstellung/ausstellungsbereiche/nixdorf-wegbereiter-der-dezentralen-datenverarbeitung/die-unternehmensgeschichte-der-nixdorf-computer-ag.html> [Accessed 4 October 2020].