An historically important organizational cluster emerged at Stanford Research Institute in the sixties, peaked about 1974, and was scattered in 1977 -- with a small core carrying forth in a commercial (and then industrial) environment to the present.
It grew by ones and twos from 1963, as it collected "permanent" members from the SRI technical staff, and recruited new ones from the outside. By '69 I believe we were about 18 strong; and this grew steadily until by '76 we totalled about 45. In 1973 we made two explicit sub-groups, one headed by Dick Watson doing development of software (and some hardware), and one headed by Jim Norton handling operations and applications support.
SRI was organized by divisions, each containing a group of laboratories: the hierarchy being formed according to the associated disciplines. ARC grew to laboratory size and status, but it became something of a problem for SRI. Other laboratories (at least in science and engineering) operated more or less as a "farmers' market," where small and changing clusters of researchers promoted and conducted research projects as a loose federation. The management structure, budgeting, accounting and financing for the Institute had evolved to support this kind of business. But ARC was driven by a coherent, long-term pursuit. This involved the continuing evolution of an ever-larger and more sophisticated system of hardware and software. It also came to involve delivering solid support service to outside clients to provide meaningful environments for learning about the all-important co-evolution processes in human organizations (human system & tool system). It didn't seem unreasonable to me to pursue this course: things similar and on a grander scale are common for other researchers. E.g., it is taken for granted for funding agencies to build and operate accellerators and observatories in support of research in nuclear physics and astronomy -- or to outfit ships and airplanes to support research expeditions. But whatever my perception, there were some significant problems and stresses for which our over-all environment didn't have effective ways to cope. In the particular dynamics involved here, there were probably seven relevant parties: me; the ARC staff; other SRI researchers; SRI management and administration; ARC's sponsors; ARC's utility-service clients; and other groups of researchers outside of SRI. It would be an interesting historical study to try to understand the diversity of perception that must have existed among this set of players. What did the different parties perceive for the future of workstations, for the range of function and application that would come about, for the systems architectures and standards that must emerge, and for the impact on the organizations that learned how to harness these most successfully? Even as a central party in what happened, I've not understood the dynamics. But I am pretty sure that disparities among the perceptions of all of the above parties had a major part in what to me was the "great collapse of SRI-ARC." Even if I had done everything right over the years (a laughable hypothesis), it is now fairly clear to me that it isn't the market's fault if someone fails in trying to sell it something that it isn't ready for. In other words, I can't blame those other groups. (Which of course makes for a personal problem, since during those times of black discouragement when one wants desperately to blame someone, there is only one candidate -- that guy at the head of the list).
In 1977, SRI judged it better to move our large-system development and external-service activities out from the research institute environment and into a suitable commercial environment. They advertised, entertained prospective bidders, made a selection, and negotiated a transfer of the business to TYMSHARE, Inc., of Cupertino, California.