Hot Tech Cold Steel: How Computer-Aided Manufacturing Caught Fire in Ann Arbor and Spread Around the World

Before robotic factories and 3-D printers and CAD-CAM, there was the invention of “numerical control”—the earliest use of computers to program metalworking machines. But the technology didn’t take off until MDSI’s software program Compact II, developed by Chuck Hutchins, was introduced to machine shops around the world. At its height, Manufacturing Data Systems, Inc., was one of Ann Arbor’s largest employers, with a huge corporate campus on Plymouth Road and offices in Europe and Asia.

This engaging read introduces MDSI’s engineers, programmers, salesmen, and executives like characters in an adventure tale, taking readers from the machine shop of the 1940s to the 1981 sale of MDSI to Schlumberger for $210 million. It is a foundational story in the history of computing, venture capital, tech IPOs, and automated manufacturing, with captivating insights for business leaders, engineers, and today’s tinkerers.

“MDSI pioneered today’s primary computing paradigm; i.e., timesharing over dial-up modems in the 1970s was the equivalent to today’s ‘cloud computing’ on the Internet. MDSI also pioneered today’s primary software pricing model: ‘Software-as-a-Service’ or ‘SaaS’ with usage-based payments and not license fees. Finally, MDSI pioneered today’s most successful business model, that is, the ‘platform’ model on which third parties contribute software-value added on a core platform. . . The most successful software companies today are 1) cloud-based, 2) SaaS-oriented, and 3) using a platform business model. MDSI was nearly fifty years ahead of its time. These visionary choices account for much of its extraordinary success.”
—Gary Morgenthaler, son of MDSI’s first investor