A Brief History of DNS
On August 1, 1999, DNS Worldwide will celebrate its twentieth birthday. In its lifetime, it has had about 150 employees, and achieved over $30 million in sales. The firm has gone through two distinct eras: From its founding in 1979 through 1987, the primary line of business was transportation consulting From 1988 to the present time, the primary line of business is EDI software.
The firm was founded as DNS Associates, Inc. in 1979 by Thomas K. Dyer (“D”), James L. Newkirk (“N”), and Hugh W. Stewart (“S”) as a privately held corporation in Massachusetts. At that time, Tom Dyer was the owner of a successful firm (T.K.Dyer, Inc.) that specialized in railroad engineering. He provided the capital for startup; one year later, DNS was profitable and bought back Dyer’s stock. Jim Newkirk had been with the CSX Railroad and then with the Federal Railroad Administration, where he developed top-level contacts throughout the rail industry. Hugh Stewart had been with Day & Zimmermann, a large consulting firm in Philadelphia. There he developed leading edge technology for computer modeling of railroads for strategic planning purposes; originally to assist the Penn Central Railroad in planning associated with its bankruptcy, and later to help the US government plan the creation of Conrail.
DNS’ offices were originally in the center of Lexington , Massachusetts, on the second floor of a building on the main corner of the town. With the downsizing in 1988, the firm moved to a small office park just outside of the town center. Though somewhat dismal (it was semi-basement office space), it provided more adequate space. With the IBM deal in 1990, the firm quickly grew to a dozen people, and became crowded. DNS added space elsewhere in the building, and when the lease ran out in 1992, the firm moved to its present location in the New England Executive Park in Burlington. A new agreement with IBM at the beginning of 1995 resulted in another growth spurt, and another block of offices was added.
In the years from 1980 to 1985, DNS played a major role in virtually every major railroad planning effort in the US, including:
- Analysis of restructuring of the Chicago, Milwaukee and Pacific Railroad
- Participation in development of a five year strategic plan for the Illinois Central Gulf Railroad
- On-going five year planning for the Milwaukee Railroad
- Analysis of potential acquisition of parts of Conrail by the Norfolk Southern Railroad
- Crew requirements planning for the Burlington Northern Railroad
- Proposed merger of the Atcheson, Topeka and Santa Fe and the Southern Pacific Railroads
- Evaluation of competitive issues for the Grand Trunk Railroad
- Analysis of competition for the Rio Grande Railroad
- Analysis of the effects of the merger with the Milwaukee Railroad on the Soo Line’s traffic
- Analysis of acquisition of parts of Conrail by Guilford Industries
- Startup analysis, business planning, and ongoing support for the Wisconsin Central Railroad
- Many studies for various shortline railroads
Newt Swain was a senior member of the management staff through this period. Formerly with the Norfolk Southern, Lehigh Valley, United States Railway Association, and Rock Island Railroad, Newt had held a number of senior marketing positions, and was a key to DNS successes in rail systems analysis. He returned in 1995 to manage the EDI marketing effort until 1997. Bengt Mutén joined DNS as an intern in 1980, and became a major contributor to the consulting practice. In 1994, he left to form Muten Associates, Inc. He continues to use DNS’ computer models to this day. The railroad consulting business declined sharply after 1986 The reasons were two-fold.
- the Interstate Commerce Commission had denied the merger of the Santa Fe and Southern Pacific railroads on the grounds that it was anti-competitive. This, combined with the need for the newly merged railroads to spend time consolidating their new businesses, put a damper on new merger studies
- deregulation of rail pricing reduced the rail rate disputes that were a staple of DNS’ business
The rail studies were performed on what was then state-of-the-art Prime computers, initially using a computer owned by DNS’ sister company, Thomas K. Dyer, Inc. At its peak in 1986, DNS’ computer had over three gigabytes of disk storage, eight megabytes of memory, and a high density 9-track tape drive, which was considered an extraordinary configuration for a small company. It cost over $300,000, and required a special air-conditioned room. (Today this configuration – except the tape drive – could be sitting on a desk top and owned for under $1,000). All programs were written in Fortran.
The company also adventured into other lines of business. In 1982, it backed a venture into solar electric power consulting, called Energy Technology Associates (ETA). ETA was unable to get adequate contracts, and was shut down after about six months. In 1983, DNS started a business to provide disaster recovery services for Prime computer owners through a subsidiary called Phoenix Services Inc. (PSI). It was for this purpose that it bought its own computer. The decline and ultimate dissolution of Prime Computer Corporation led to the collapse of a market for these services, and PSI finally shut down its operations. In 1985, DNS struck an agreement with the vendor of software for service call handling, and marketed such software under the name ServiceEdge©. It was not particularly successful, and was ultimately sold to another company. In 1985, DNS (including its subsidiary PSI) had eighteen people, with an office in Washington, DC. Electronic Data Interchange In late 1985, DNS learned that Conrail railroad’s Marketing Department wanted a number of customers to use EDI. The IBM Personal Computer had been introduced and was beginning to be accepted by businesses, and Conrail was looking for PC based EDI software that shippers could use. There was very little on the market. Hugh Stewart and Bill Rust attended a two day training session on EDI given by the Transportation Data Coordinating Committee (now extinct; it is the organization that originally created EDI). It was determined that it would not be difficult to write software to meet Conrail’s requirements, and that there was a significant opportunity in EDI software. Bill Rust was at that time a consultant/programmer on the staff. In December, 1985 he set out to write an EDI system for the PC. By April, he had created a working prototype that DNS showed off at the annual Computers in Logistics trade show in Chicago. A number of names were considered, and at the last minute EDIEDGE © was selected. A member of DuPont’s EDI staff saw the software at the Chicago show and suggested that DNS get in touch with them. As a result of that contact, DNS worked with DuPont’s EDI experts through the summer, implementing changes and adding features. By the end of the year, it was deemed ready to sell. The first copy was sold to Boise Cascade (they had been a client of DNS’ rail consulting services) in December, 1985. In 1987, Hugh Stewart succeeded Jim Newkirk as president, and DNS began to concentrate on EDI as its primary line of business. The Washington office was closed. The firm continued a small railroad consulting services until 1994. By the end of 1989, DNS consisted of four people:
- Hugh Stewart was President and did product development, documentation, and training
- David Mello did technical support and production
- Bengt Mutén continuing the consulting services, and
- John Witten handled marketing and sales, operating out of Philadelphia.
Some of DNS early achievements with EDIEDGE include:
- 1987 – Introduction of DOS version
- Selected by DuPont
- Selected by Owens Corning Fibreglas
- 1988 – Selected by Pillsbury
- 1989 - Selected by Whirlpool Finance Corp
- Selected by BC Rail
- Selected by Western Union for on-line Freeform translator
- Selected by OTC (Australia) for resale
- Selected by New Zealand Telecom for resale
- 1990 – Selected by IBM for resale (PC QuickEDI)
- Selected by Anhueser Busch
- Selected by ARI Network Services for resale
- 1991 - Introduced Rev. 5 (EDIFACT, Repeat Groups)
- Introduced DEC VAX and Unix versions
- Introduced label printing and security add-ons
- 1992 – Introduced: LAN version
In 1994, DNS announced the Windows version of EDIEDGE, created by Bernie Brown, scheduled for delivery in early 1995. The company also adopted the name DNS Worldwide, to place emphasis on the international market and shed the consulting image.
The IBM Relationship
In December of 1989, IBM called and asked that we attend a daylong meeting in Dallas between Christmas and New Year’s day. IBM had flown people in from all over the country for the meeting. Although DNS didn’t quite know what they wanted, a nice presentation was made that seemed to satisfy everyone. There was minimal contact until a day in late February of 1990, when four people from IBM flew up to Lexington to meet. In short order, DNS and IBM signed an agreement whereby IBM would market and support EDIEDGE under the name of “PC QuickEDI”. The agreement with IBM allowed us to substantially increase and stabilize sales. Two sales people (one each in San Diego and St. Paul), and additional support staff, and developers were added. Also in 1994, IBM (then Advantis) decided to drop selling PC QuickEDI and to transfer support of all PC QuickEDI customers to DNS. As of January, 1995, they would market EDIEDGE as the preferred solution for EDI on the PC. This required that DNS again expand its support staff, and build a sales department. By 1996, DNS’ sales reached $3,000,000.
The following chart depicts the annual revenues over this time.
From 1979 through 1987, the primary business was transportation consulting. In 1986 a shift to EDI software began. In 1990, DNS entered a partnership with IBM, and quickly grew to about a dozen employees and remained at 12 – 20 until 1995. 1994 saw a slump is sales that signaled the need to restructure the sales force. In 1995, a new IBM Advantis partnership resulted in the need for a bigger support and sales staff, and DNS grew quickly to about 40 people. The next two years saw the best sales performance in the company’s history.
A New Era
In late 1997, Stewart retired as President, and Jim Newkirk took over as interim president until Steve Zapata assumed the position in 1998. With a solid EDI background gained while with IBM and GE, Steve is expanding DNS’ alliances and moving the company into state-of-the-art electronic commerce. Stewart continued to provide continuity with the past as a consultant. Hugh W. Stewart June 1999
An Almost Complete Roster of All Employees of DNS from 1979 – 1999
(if you know of a person missing from this list, please let me know)