Tallgrass Technologies Corporation was the first manufacturer to offer a hard-drive product for the IBM PC. It was a Kansas City based microcomputer hardware and software company founded in December 1980 by David M. Allen. The product was initially sold in Computerland stores, alongside the original IBM PC. Tallgrass added tape-backup systems to its product line in 1982.
Tallgrass was significant in the history of the PC because IBM shipped its PCs for the first two years without any hard-drive option. The IBM name attracted the makers of larger, professional software products that required a hard-drive's speed and capacity. The availability of the Tallgrass hard-drives enabled those products to make earlier entrances into the PC market. The parallel introductions, of the IBM PC with the Tallgrass hard-drive, catalyzed the growth of the PC market compared to what it would have been without the hard-drive.
Tallgrass was one of Seagate's earliest customers, initially purchasing ST-506 drives from Shugart Technology before the name changed to Seagate. The Tallgrass product was designed around the ST-506 hard drive, which required a separate controller between the drive and the computer (unlike hard drives today.) Tallgrass also briefly bought drives from Texas Instruments.[1] Later, Tallgrass bought most of its drives from Miniscribe[2] and for a while was Miniscribe's largest customer.
Prior to IBM's PC introduction, Tallgrass initially tried marketing Allen's controller alone, to other manufacturers. In mid-1981 Tallgrass decided to market a complete, external hard-drive subsystem (hard-drive + controller) to computer dealers. Tallgrass first developed subsystems for the Xerox 820 computer, an Alpha Microsystems computer and was working on an Apple-IIe version when IBM announced the PC in August 1981.
Tallgrass was able to supply its product for the PC, in production quantities, at the same moment that IBM started revenue shipments of PCs in October. This was because Tallgrass' product was already in production and needed only a simple interface card and PCDOS driver software to attach it to the IBM PC.
Allen discovered they already had the driver. As part of the development of its subsystem for the Alpha Microsystems computer, Tallgrass developed a driver for Seattle Computer Products' "Seattle-DOS" (86-DOS) operating system. 86-DOS was renamed PCDOS when Bill Gates bought the rights and licensed it to IBM.[3][4]
A partner in the local, Lenexa, Kansas Computerland store, Jim Fricke, gave Allen access to their IBM PC demonstrator on a Friday, when it arrived a few weeks before IBM's PCs were available for sale. Allen built a prototype interface card over the weekend and successfully tested the card and the driver on Monday. The same Computerland store's other partner, Bruce Burdick, was a member of Computerland's New Products Committee and helped get the Tallgrass product embraced by Computerland nationwide.
With IBM's entry into the market, Allen invited a friend, Steven B. Volk[5][6] to join Tallgrass as Executive V.P. of Sales and Marketing. Volk assembled a sales organization and started an advertising campaign, initially incorporating pictures of scarlet macaws that he and his wife raised in their basement.
With the support of Computerland and helped by high gross margins of up to 35%, Tallgrass grew very rapidly. Gross revenue peaked in mid-1985 at an annualized rate of $70M and there were 400 employees at the start 1986.[7] By this time significant competition had arrived in the marketplace and Tallgrass' sales had plateaued.
In an attempt to revive sales growth with an enlarged marketing push, Allen sought the help of venture capital. In mid-1986, Gateway Associates L.P. in St. Louis took the lead and brought in the major investor, Reimer and Koger Assoc., pension advisor for KPERS (the Kansas Public Employees Retirement System.) Sales continued to falter and profits sagged while management and investors disagreed over a course of action.[8]
In mid-1987 the investors forced Allen out and took control of the company.[5] Volk left later the same year to go to PrairieTek.[9] Allen brought the investors a $4M buyout offer from a California competitor. A letter of intent was signed in July but allowed to expire in August.[10][11] By November 1987 the investments reportedly totaled $7M, employment was down to 130, and annual sales revenue far below $40M.[12] After a six-year succession of presidents and additional investments, in 1993 the investors sold what was left of Tallgrass to Exebyte Corp. for $1.5M.[13] By that time, KPERS investments in Tallgrass totaled over $14M.[14]
Not long after the acquisition, Exebyte sold the "Tallgrass Technologies" name to the former Tallgrass V.P. of International Sales, Jim Worrell,[15] who then renamed his own import/export company using the Tallgrass name. Today his company has new ownership and a different charter but continues operating under the Tallgrass Technologies LLC name.