The incredible shrinking company.

PSYCH Systems Inc.; DIGITAL Equipment Corp.

The article presents information on the downfall of Psych Systems Inc. (PSI) company, which in 1983 sold computerized systems for psychological testing, had grown by 175% annually over the past two years and had fans on Wall Street. Things were going so well that the company was contemplating a stock offering. Instead, demand began to fall for the tests and other software it sold as a package with minicomputers made by Digital Equipment Corp. PSI was vulnerable because it offered the popular Minnesota Multiphasic Personality Inventory test through a license granted by a competitor. That agreement expired at the end of 1983, and customers were worried that the well- known test might be yanked. To make matters worse, the boom in personal computers began to price PSI's big DEC machines out of the market.