Founded in July 1968 by Phil Ray and Gus Roche, its first products were, as the company's initial name suggests, computer terminals intended to replace Teletype machines connected to time sharing systems.

At the time, mainframe computers were large room-filling pieces of equipment, from which data was output using noisy and slow Teletype terminals.

On the advice of one of his tutors from the University of Texas, Ray and Roche decided to develop a quieter and smaller input device based on using a television set screen.

[1] After finding San Antonio, Texas based backers, the pair incorporated Computer Terminal Corporation (CTC) there in July 1968.

Ray and Roche wanted to develop a new, more intelligent terminal, and employed a trio of engineers who knew each other from their interests in amateur radio: Victor Poor, Harry Pyle and undergraduate Jonathan Schmidt.

[1] While working his notice from Maryland-based Frederick Electronics during the 1969 Thanksgiving holiday, Poor and Pyle developed the underlying instruction set architecture of the processor on a living room floor.

This enabled Phil Ray and Gus Roche to design and develop the mass-produced programmable 2200, which could load various emulations stored on cassette tapes.

[5][dubious – discuss] In part this was fiscally driven, as both supplier debts were large, and the annulment of either would mean that CTC could avoid a follow-on offering.

Noyce initially questioned the approach, suggesting that development of the microprocessor would reduce Intel's sales of their dumb shift registers, but eventually agreed to the deal.

[7] Thus, today's overwhelmingly dominant instruction set architecture, used in Intel's x86 family of processors as well as all compatible CPUs from AMD and others, traces its ancestry directly back to CTC.

However, after realising that his company would be competing with major customer IBM, the President of TRW pulled out of the deal, and renegotiated it as the purchase of overseas manufacturing rights.

In 1976, Datapoint introduced a machine that automatically routed outgoing telephone calls onto the cheapest available line, there by liberalising the US Telecoms market after the AT&T breakup.

[9] Other Datapoint inventions were ARCnet, invented in 1977, originally called ARC (Attached Resource Computer), which was an early token-passing local area network (LAN) protocol, and the PL/B high-level programming language, which was originally called Databus (from Datapoint business language) and ran under the Datashare multi-user interpreter.

Proprietary operating systems included DOS and RMS, and Datapoint later moved its hardware to be based on Intel 386 CPUs.

ARCnet was briefly superseded by ARCnetplus, which provided throughput of 20 Mbit/s and include options such as LiteLink which used infra-red technology to link systems in adjacent buildings.

Datapoint also developed and patented one of the earliest picture-in-picture implementations of videoconferencing called MINX (Multimedia Information Network eXchange).

[10] Such factors forced Datapoint to reverse sales or to record substantial bad debts, which caused the company to lose $800 million of its market capitalization in a matter of a few months in early 1982.

[14] After a three-month fight, on March 16 the board of Datapoint agreed to restructure the company, led by the immediate resignation of O'Kelley and his replacement as chairman by Edelman, who dropped his legal challenges.