Exxon Enterprises
| Company type | Subsidiary |
|---|---|
| Industry | Diversified technology and venture capital |
| Founded | 1964 |
| Founder | Exxon Corporation |
| Fate | Discontinued, major parts sold to Lanier Business Products in 1985 |
| Headquarters | New York City , United States |
Key people | Eugene ("Gene") McBrayer (President), Hollister ("Ben") Sykes (Senior Vice President), Robert Winslow (President from 1979) |
| Products | Venture capital investments, advanced materials, solar energy, information processing systems, office technologies |
Number of employees | 2,300 (at time of EOS sale in 1985) |
Exxon Enterprises was founded in 1964 by Exxon Corporation as a fully owned subsidiary designed to expand the company's interests beyond the petroleum and chemical sectors. The organization was initially headed by President Eugene ("Gene") McBrayer alongside Senior Vice President Hollister ("Ben") Sykes.
By 1978, Clifton C. Garvin, then chairman of Exxon, had earmarked $1 billion for capital expenditures outside the oil industry through the year 1980.
Background
After multiple unsuccessful attempts to bring non-energy innovations from Exxon's research laboratories to market, the company narrowed its focus by 1968 to ten promising business sectors. Several ventures, such as factory-built housing and synthetic foods, did not succeed. Consequently, the strategic emphasis shifted toward three key industries where companies had the potential to reach valuations of $100 million: New Materials, Solar Energy, and Information Processing.
Beginning in 1969, Exxon Enterprises initiated venture capital investments, generally providing startups with initial funding up to $500,000 to support team expansion, product development, and market analysis. Subsequent financing was allocated for prototype creation and commercialization efforts. For more established enterprises, Exxon took equity positions ranging from 10% to 40%.
By 1976, Exxon Enterprises had formed two wholly owned subsidiaries: Gilbert & Barker Manufacturing—a $100 million company specializing in gas station equipment—and Exxon Nuclear Company, which supplied nuclear fuel and reactor services. Moreover, Exxon Enterprises oversaw 26 companies at various stages of development, including 10 internal projects and 16 external technology ventures financed through venture capital.
Advanced Materials
- Emdex (silicon photodiodes)
- Intermagnetics General (superconducting materials and devices)
- Optical Information Systems (semiconductor laser diodes)
- Datascreen (electronic flat panel displays)
- Graftek (graphite-fiber reinforced plastic)
- Xentex (glass-fiber reinforced structural foam plastic)
New Energy Systems
- Electric Power Conversion Systems (DC to AC power synthesizers)
- Solar Power Corporation (solar photovoltaic cells)
- Daystar (solar heating systems)
- Environmental Data (air pollution instrumentation)
Information Systems
- Qwip Systems (fax machines), established in 1972
- Vydec (word processors)
- Qume (character impact printers); Exxon divested its 9% interest to ITT Corp in 1979 yielding a 24-fold return
- Qyx (microprocessor-based electronic typewriters)
- Dialog (computerized speech recognition)
- Ramtek (interactive color graphics displays)
- Periphonics (communications interfaces)
- Delphi (automated telephone answering systems)
- Zilog (microprocessors)
- Magnex (thin-film magnetic disk drive heads)
- Scan-Tron (test scoring mark reader)
- Electromedical Systems (solid-state electrosurgical devices)
- InteCom (voice and data switching networks)
Establishment of Exxon Information Systems
In early 1979, Exxon Enterprises unified its Information Systems investments under the new entity Exxon Information Systems with the objective of becoming a premier provider of advanced office technologies and communications infrastructure. Four companies—Vydec, Qwip, Qyx, and Zilog—were consolidated within this division as part of the Office of the Future program.
Leadership adjustments included transferring Eugene McBrayer from Exxon Enterprises to Exxon Chemical Co., while Robert Winslow, previously President of Exxon Chemical, assumed the presidency of Exxon Enterprises. Winslow centralized operations at Exxon's headquarters in New York City and recruited seasoned executives from IBM and Xerox to enhance strategic management capabilities.
The Brief Existence of Exxon Information Systems
In 1980, Exxon Information Systems reached its highest point with estimated revenues around $200 million, yet it continued to endure losses amounting to tens of millions. Although innovative products such as the Qyx typewriter and Qwip fax transceiver were introduced, the failure to modernize these devices resulted in their swift decline in relevance. To stay competitive, Exxon chose to outsource the development of next-generation word processors and ink-jet printers.
Efforts to increase sales involved collaborations with Sears, Roebuck & Co. for distributing Qyx typewriters; still, broader retail initiatives did not succeed in expanding market share against competitors like Xerox, IBM, and Wang Laboratories.
In 1981, Exxon merged its Qyx, Qwip, and Vydec operations into a single entity named Exxon Office Systems (EOS), restructuring according to product categories with combined marketing and manufacturing functions. Workforce reductions commenced with 600 layoffs early that year, followed by the shutdown of a Qwip manufacturing facility and an additional 1,100 job cuts—reducing the total number of employees by approximately 20% to 4,000. The data storage units were sold off to Storage Technology Corp. Despite these measures, EOS was unable to reclaim a strong position or achieve profitability within the office systems sector.
Exxon's Choice to Discontinue Exxon Enterprises and Exxon Office Systems
By 1984, Exxon had surpassed the initial $1 billion investment target established by founder Clifton Garvin back in 1964. Confronted with widespread industry difficulties, Exxon decided to concentrate on its primary oil business. The electronic power systems division along with other ventures were closed down, while Exxon Office Systems (EOS) struggled to gain meaningful market traction. Garvin admitted uncertainty regarding EOS’s future as it recorded yearly losses of $70 million on $200 million in revenue—far below the anticipated $1 billion target for 1985.
Toward the end of 1984, discussions commenced about divesting EOS, which had been downsized to 2,300 employees and faced a $30 million write-off. In 1985, Lanier Business Products—a subsidiary of Harris Corp. and a significant office automation company—purchased EOS. This acquisition encompassed EOS’s sales team, dealer network, service staff, inventory stock, and intellectual property rights. Lanier also assumed responsibility for warranty commitments and continued equipment supply and support services.