During World War II the U.S. Navy had built up a team of engineers to build codebreaking machinery for both Japanese and German electro-mechanical ciphers. A number of these were produced by a team dedicated to the task working in the Washington, D.C., area. With the post-war wind-down of military spending, the Navy grew increasingly worried that this team would break up and scatter into various companies, and it started looking for ways to covertly keep the team together. Eventually they found their solution; the owner of a Chase Aircraft affiliate in St. Paul, Minnesota, John Parker, was about to lose all his contracts with the end of the war. The Navy never told Parker exactly what the team did, since it would have taken too long to get top secret clearance. Instead they simply said the team was important, and they would be very happy if he hired them all. Parker was obviously wary, but after several meetings with increasingly high-ranking Naval officers it became apparent that whatever it was, they were serious, and he eventually agreed to give this team a home in his military glider factory.

The result was Engineering Research Associates (ERA), a contract engineering company that worked on a number of seemingly unrelated projects in the early 1950s. One of these was one of the first commercial stored program computers, the 36-bit ERA 1103. The machine was built for the Navy, which intended to use it in their non-secret code-breaking centers. In the early 1950s a minor political debate broke out in Congress about the Navy essentially "owning" ERA, and the ensuing debates and legal wrangling left the company drained of both capital and spirit. In 1952, Parker sold ERA to Remington Rand. Although Rand kept the ERA team together and developing new products, it was most interested in ERA's magnetic drum memory systems. Rand soon merged with Sperry Corporation to become Sperry Rand. In the process of merging the companies, the ERA division was folded into Sperry's UNIVAC division. At first this did not cause too many changes at ERA, since the company was used primarily to provide engineering talent to support a variety of projects. However, one major project was moved from UNIVAC to ERA, the UNIVAC II project, which led to lengthy delays and upsets to nearly everyone involved.

Since the Sperry "big company" mentality encroached on the decision-making powers of the ERA founders, they left Sperry to form the Control Data Corp. in 1957, setting up shop in an old warehouse across the river from Sperry's St. Paul laboratory, in Minneapolis at 501 Park Avenue. Of the members forming CDC, William Norris was the unanimous choice to become the chief executive officer of the new company. Seymour Cray soon became the chief designer, though at the time of CDC's formation he was still in the process of completing a prototype for the Naval Tactical Data System (NTDS), and he did not leave Sperry to join CDC until it was complete.

Original from Wikipedia