Oral-History:Virgilio Floriani

About Virgilio Floriani

Virgilio Floriani was born in Cison, Italy on June 29, 1906. He received his degree in Electrotechnics from the Polytechnic University of Turin in 1929. In 1946, he founded Telettra in Milan, one of the principal Italian companies producing telecommunications equipment. In 1977, together with Vittorio Ventafridda, he founded the Floriani Foundation to assist terminally ill patients and fund research for better palliative care. In the interview, he reviews the history and principles of Telettra, influenced heavily by Hewlett-Packard, and its ventures into transistors, digital communications, switching, and telecommunications over power lines. At the same time, the company had to negotiate the politics of Italian business.

About the Interview

VIRGILIO FLORIANI: An Interview Conducted by David Morton, IEEE History Center, July 29, 1996

Interview #285 for the IEEE History Center, The Institute of Electrical and Electronics Engineers, Inc.

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It is recommended that this oral history be cited as follows:

VIRGILIO FLORIANI, an oral history conducted in 1996 by David Morton, IEEE History Center, New Brunswick, NJ, USA.

Interview

INTERVIEW: Virgilio Floriani (Accompanied by Guido Vannucchi)
INTERVIEWER: David Morton
PLACE: Milan, Italy
DATE: July 26, 1996

Telettra, Bell Labs and the Transistor

Vannucchi:

So we are going now starting the interview with Mr. Floriani who has been the founder of Telettra. Present also is Mr. Zamfi, who is our interim acting chief operating officer of Telettra. Telettra was founded in 1946 immediately after the war and Mr. Floriani can also talk about his experience before this period. Starting in 1946, as I mentioned before and as we have seen the pictures, there was the first introduction in Italy of electronics in telecommunications with the Italian Operating Company that at the time was called [unintelligible], but we are still in 1946 five different concessions, so to speak.

[passage in Italian]

Vannucchi:

Just a moment, I will translate. This is a very nice story. Telettra's early was very parallel to the period after 1948, after the invention of the transistor from the Bell Labs. From '48- 55 it was not very [clear] what this mysterious device was or where it was going. Mr. Floriani was always very careful in looking at all the information coming from Bell. So at a certain time, this was 1955, he received and read the information that for 15 million Lira of this period, so I think twenty thousand or twenty five thousand dollars, of the period, that it was possible to have information about the transistor from Bell. [passage in Italian] For twenty five thousand dollars, one could get a license of construction. And without waiting for more information, Mr. Floriani sent the money to Bell and immediately got a license. [passage in Italian] And, by the way, the first meeting was with Dr. [Jack] Morton, who was at the time the head of Bell Labs or Vice- President — Director of Microelectronics.

Morton:

We are not related.

Vannucchi:

This was not the first contact with Bell, because before there was another important connection formed when Telettra got a license for Italy for another important device and system called the Compander for analog transmission. It was very important in this time in Italy for urban areas. And the Telettra for many years was the only one producing with its own design or license for the area for many years, I think for all the life of Italian telecommunication.

[passage in Italian ]

Actually, there was not a particular license. They gave — at this moment, Bell Labs was very liberal. They gave some information to us and afterwards there was a general contract of transfer at this time, apart from the transistor, it was not particularly for the Compander, but for many other things there was a transfer and general contract that we kept for many, many years.

PCM and Hewlett-Packard

Vannucchi:

Another important point, in my opinion, has been PCM. Have you met Bob Noyce and the people who worked on PCM?

[passage in Italian]

So, there was some information about PCM, because PCM was first introduced here in 1960 . Nevertheless, the invention of P as a system came from [Reeves] — it is an old invention from 1937. It was absolutely impossible to practically, let’s say, have PCM without the invention of transistors. So the story of P is strictly connected with the history of the transistor. And when they first started to have transistors, the [unintelligible word] and all these functions were made with individual transistors. And I remember very well that only in the 60s, I was just arriving at Telettra, there was the first people coming from Fairchild offering the logical function as an integrated function, this was, I think in 1960.

[passage in Italian.]

Translator:

So he’s saying, Mr. Floriani, that during this period when Bell was very liberal, they organized visits for him to Hewlett-Packard just to see the first application of transistor. And so this was around 1957/58, they started this big friendship between Mr. Floriani and Mr. Packard. And more or less in the same period, they started also a friendship, always through the Bell Labs, between Mr. Floriani and Bob Noyce, who was the founder of Fairchild.

And this has been a very important relationship, because starting from this friendship came the idea to do something in Italy about semiconductors with a company that started in 1959, SGS, because that was before it came to Telettra.

[passage in Italian]

Vannucchi:

In 1957 was founded SGS.

[passage in Italian]

So in ‘56, it seems, there was an important meeting in New York where Bell was trying to propagandandize the transistor, and one of the first Europeans to take an interest in it was Mr. Floriani, who went to this meeting. Before SGS, there was an internal lab in Telettra in a small room of Telettra where the first diodes were developed. But Mr. Floriani realized that it was impossible for a big company making semiconductors to be alone, so he decided to ask the help of Bob Noyce of Fairchild and to ask another big entrepreneur in Italy who was Olivetti, and so started this very successful joint company, Telettra. Olivetti had thirty-three percent.

[passage in Italian]

So you remember better. When I suggest it was started in 1957, he had the chance to visit [unintelligible] that — I mentioned before — that after was part of the GT group. At the time it was an independent company. It was [unintelligible] who organized the first meeting with Packard, not Bell Labs.

[passage in Italian]

After this first approach, let’s say, in the US, Mr. Packard decided to come to Europe. In Italy there was not a company, Hewlett-Packard, but there was a representative at this period. And Hewlett-Packard was interested in Telettra, since at the time you have to remember that Hewlett-Packard was mainly equipment for measurement in microwaves. This is how Hewlett-Packard was started. Telettra was a customer of Hewlett-Packard. So Mr. Graniello — that was the Italian representative, Hewlett-Packard — decided to bring Mr. Packard to Telettra to look at this small room where the first semiconductor was made in Italy. So in this period was the first contact. So we have the Compander, as we mentioned, and we mentioned the beginning of P and semiconductor.

Digital Microwave Transmission

Vannucchi:

[passage in Italian]

As I mentioned before, now we will check better the year, there was an important step I should mention. It was a 13 gigahertz microwave system with a small antenna that has been sold all around the world because it was the first digital equipment — and with the possibility — and a new frequency band that it was possible to use without any limitation. This has been sold in all the parts of the world, I would say. I think it was 1967, around this time. ‘65 or ‘67 it was. And after in the ‘70s there was the second generation. The first had a very small capacity, just 2 megabits, this means 30 PCM channels with the European standard, and that was like the 24 channels in the States. And in the '70s, there was the second generation that had a much higher capacity, 408 P channels, so this must be around 1965, perhaps you may find it out.

[passage in Italian]

There has been another important step for Telettra. Telettra's particular capability, was that it was the only one in the world capable of designing the microwave links over very long long distances on the sea. So there were some links, of course on very high top mountains with the single span of 300km where the normal span is about 50 km. And this was because we had a brilliant engineer that was very capable in the field propagation, who studied the system of propagation, frequency division, space division, all the possibilities and so we were the first to cross the Red Sea with the single span of 340 km. Of course it was on top of a very high mountain and went from one shore to the other. This was another big capability of Telettra that you will see it mentioned in the book in English. I don’t remember the date of the Red Sea project, this should be around the seventies, again the seventies.

[passage in Italian]

Telettra's Guiding Principles

Vannucchi:

OK, 1972. I will translate. Mr. Floriani, many years ago, wrote a book about his life; there is also a version in English. And I think in this you will find the real fundamentals of our history. Mr. Zamfi has reminded me of what is considered the key fact in Telettra's history. First of all, Mr. Floriani has always believed in innovation. We must be the first, we must be the first. Mr. Floriani didn’t know about Schumpeter work. [laughter] But the approach was exactly the same: the importance of innovation. The second point is that even though we spent a lot of money on Telettra, we had to be completely independent in our R&D. When Telettra was actually sold to an [unintelligible word] group, there were 2,500 people in R&D, and now there are at least 9,000 people. So to be completely autonomous, and in order to anticipate all the other companies that were related to the multinational companies that were present in Italy, as I told you.

The third key of the success of Telettra, has been the relationship with the customer to anticipate the marketing, the needs of the customer, to try to understand the needs of the customer. The goal has been to satisfy in very short time, because I remember that instead of the present theory of time to market, how fast Telettra was, even when time to market was not invented, was unbelievable. In one year, a new process was started. The third thing that has been very important to the commercial prices along the national and international market. We might find something in Australia, or in Brazil and so on. And the third that I already mentioned to you was to be very open with the industrial presence in important international markets, to be very open to open new factories, to give the possibility for advance to many people. This had been particular to this being the way of the company was at the end almost three thousand people. The Telettra company has been, was quite big it was almost three thousand people of all the nine thousand people of all Telettra.

Morton:

I am not sure I understand that last point.

Vannucchi:

Telettra — One of the key objectives of Telettra was that Telettra was very willing to open a new local company. Not only manufacturing companies, but also manufacturing companies and an industrial companies. You may see, let’s say all the industrial companies of Telettra around the world.

[passage in Italian]

Telecommunications over Power Lines

Vannucchi:

Oh this is important, I forgot this. Telettra, before I arrived — so this is before the sixties — was one of the first in the world, certainly the first in Europe, in using the electrical power lines for telecommunication. And this because of the particular relationship between with the Italian electricity company that is now called ENEL. It has developed a particular capability on open air lines for telecommunication, in this case. And another first was the microwave passive repeater. In other words if you had not a very long distance, but many narrow valleys, as you have in Italy, it was very difficult at this time to put active repeaters in place, because of the question of maintenance, because of the question of people going there. But it was very easy to put a passive repeater, like a mirror. They were absolutely passive.

This was the famous tower with the space division, frequency division, on one of the two sides of the crossing of the Red Sea.

Morton:

I have a question about the power line communication.

Vannucchi:

Yes.

Morton:

When was that taking place and how extensively was that used?

[passage in Italian]

Vannucchi:

In Italy after the foundation of Telettra in 1946, with the use of pairs for two or three telephone channels at the same time. There was also the beginning of using the power lines for telecommunication. Mr. Zamfi is saying there was already existing in Italy small company called [unintelligible] that was already installing such a system, but was completely being put out because of the simplicity of the new system, this system in comparison with their earlier equipment .

Morton:

Who were the customers?

Vannucchi:

The customers were all the electricity power companies. At the time, they were not unified like now — the Italian power company is now called ENEL. But at the time, there were three or four different companies in Italy, perhaps many more.

[passage in Italian]

This is important. The Compander device was fundamental for the use of the power company, because the lines are very noisy. So, the Telettra's introduction of the Compander was for this kind of application.

Morton:

Did the electric trains also use these?

Vannucchi:

Yes. Yes. The train. This was much later. Then when they took the system, they realized train communication between the train and the ground. But this was many years later. Well the first one was the electricity company, the power electricity company, one of the first customers of Telettra.

[passage in Italian]

Vannucchi:

The Compander reduced the noise, at least in subjective testing, so it was possible to reduce very much the power needed to transmit on a power line and so the Telettra equipment was very much more simpler than the previous ones, the previous equipment.

Founding of Telettra

Morton:

I haven’t heard much about the early history of the company or what was happening before.

Vannucchi:

How it was founded perhaps. This is interesting. How Mr. Floriani founded the company.

[passage in Italian]

Mr. Floriani decided to found the company when he was working during the war in a company in Italy called Safar, that was working on some interesting equipment for military applications in telecommunications. Immediately after the war, they need an idea to transform their capability from the military field to the civil field and they decided to start making toys. [laughter] But Mr. Floriani was saying, "But this is the future, this is the future!" But nobody above the manager understood this important point. So he decided to leave the company with other 15 people, 14 people? With another 13 people from this Safar company. So they decided to start Telettra and I showed you the first building of Telettra in Milano. It was completely bombed but —

Switching Systems

Morton:

Was Telettra always in telecommunications?

Vannucchi:

In the beginning it was particularly in transmission of the telecommunications field. And it started with the switching, the first digital switching in Italy. And that was about the middle sixties let’s say. So it was a company for transmission, this was the first task of Telettra. The founder was also the owner of Telettra until '69, when for political reasons — political in general meaning — Mr. Floriani decided to sell 25% to FIAT, because Telettra was becoming very big at this time. In Italy, in some political issue let’s say, you have to have some political support. Another interesting story of the beginning of Telettra that Mr. Zamfi has mentioned to me was the first visit in Telettra of a man called Mr. Farbis, who was very important in the service provider companies in Italy.

[passage in Italian]

So this Mr. Farbis developed for the first time a system that could transmit 5 channels on a single pair. And he said that you cannot imagine, you will not be able to produce as many of these equipments as you we will need. And this has been true, because for them to have the capability to transmit 5 channels on a single pair without changing all the cable, was to have the possibility of increasing by five times the capability of the network.

Morton:

What kind of switching did the Italian telephone system have before electronics came in?

Vannucchi:

The switching was fully electromechanical of course, but totally from a multinational company. There was not any digital switching starting in Italy. There was Siemens, there was Erickson, there Marconi. No, not Marconi, but Raltelco, the Italian name of GTE. These were the three main systems in Italy. At this time, in the middle of the sixties, Telettra decided to start digital switching, but at this time Telettra faced a big political issue. As long as Telettra was in transmission, all the other multinational companies were not so worried. But when Telettra decided to start a digital company, they had big opposition, everybody was against Telettra. Many years later, discussions started for a national design, but unfortunately for many years they were unsuccessful, and since they were unsuccessful — they were part of the same group of [unintelligible word] — it was not possible for Telettra to introduce a system. It was delayed about five or six or seven years, the Telettra system. I think it was the first digital switching in Europe that has been completed. This was in 1975-76, but unfortunately still four or five years because of a tariff problem, because it was transmitting speech and data. There was a block in introducing the system that was completely in full operation since 1976.

Morton:

When you say transmitting data are you talking signaling data or customer’s computer data?

Vannucchi:

Computer data.

Morton:

How important was that in Italy in the sixties and seventies?

Vannucchi:

In these years, it is starting to be quite important. Quite important. This particular switching was a particular started to offer a very good advance of service for telephony. All the new services, like "follow me," and all these kinds of service. Plus the capability to switch 64 kilobits data, so it was becoming quite important at the time.

Of course, from a market point of view, because of this political opposition, Telettra did not have success in digital switching, because it was always a small niche. It was advanced digital network, but it was a small niche. This has been too bad because Telettra could have grown much faster, but it has been fundamental to create a culture that has been fundamental later on, for the so-called digital cross connect. Telettra had a big success in digital cross connect, their modern machine.

[passage in Italian]

Mr. Floriani again underlined the fact that our strong point in Telettra has been transmission for many years without much competition from other companies, but then Telettra decided to enter the switching market, which was much bigger. Unfortunately, it never played the political side with very good results. They were very difficult, almost impossible. In a situation like the U.S. perhaps Telettra would have had a completely different life. In a more free environment.

[passage in Italian ].

Influence of Hewlett-Packard

Vannucchi:

An important memory of Mr. Floriani that has been important in the history of Telettra is connected to the discussion of Mr. Packard. Mr. Floriani was a technical man. Telettra was mainly an R&D company, not a market oriented company. The discussion with Packard opened the mind, so to speak of Telettra to the possibility of transforming itself into a completely different company. I remember very well that in the middle 1960s, Mr. Floriani started working on the very big internal problem of training and problem of management — I remember — pushing everyone to study management, to study economics and so on. And this was a rather important step in the history of Telettra, changing the mentality from and R & D company to a "real" company. A marketing company also.

Morton:

Was there a particular model of management, a particular company that was a model for the management style?

Vannucchi:

I don’t know. I think that the reference company for Telettra has always been the Hewlett-Packard company. I think this has been the model for many years. In the first instance, with the R&D content of Hewlett-Packard, and the second when they changed it to the division. As I mentioned before, in1974 we went to Hewlett-Packard to ask their experience and, in particular, to talk with Mr. John [Young?], I remember, who said "You want to grow more? Well, you have to go to division." "You have to go to division," I remember very well. Afterwards we made some mistakes, perhaps too many divisions. I think Mr. Floriani would like to stop.

Morton:

OK. Thank you very much.