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Entrepreneurial Capitalism and Innovation:
A History of Computer Communications 1968-1988
By James Pelkey

Entrepreneurial Capitalism & Innovation:
A
History of Computer Communications
1968 -1988
By James Pelkey

This history is organized by three co-evolving market sectors and also standards making.
An overview of the schema is presented in the Introduction.

DATA COMMUNICATON
Ch. 1: Emergence
Ch. 3: Competition
Ch. 5: Market Order
Ch. 11: Adaptation

NETWORKING
Ch. 2: Vision
Ch. 4: Arpanet
Ch. 6: Diffusion
Ch. 7: Emergence
Ch 8: Completion
Ch. 10: Market Order

STANDARDS
Ch. 9: Creation

INTERNETWORKING
Ch. 12: Emergence

 

 

Chapter 10
Networking: LANs 1983 – 1986
LANs Over Data PBX

10.12     Excelan

Entering 1983, Excelan viewed its product advantage to be its single-board Ethernet controller design with a powerful microprocessor to off-load the LAN protocol processing from the host computer. [12] Excelan would focus on high-performance, not low-cost applications, especially the engineering workstation market. In early1983, Excelan introduced their first products. Kanwal Rekhi remembers:

“We saw the opportunity of being suppliers of networking to all these people who didn't have TCP/IP.  So we focused on TCP/IP with an Ethernet board. We signed up just about everybody, everybody except Apollo and Sun. We had about 35, 40 OEMs.”

Success forced the need for more capital. In December, they raised $2.0 million from venture capitalists.

Management then got overly ambitious. Rekhi recalls:

“He (Dr. Inger Singh) was real sure that, if you don't do it now, this market is going to be taken, and I kept saying that we don't have the resources. If we don't do what we need to be doing here -- and even in the networking, he wanted to do the Ethernet, Token Ring, Token Bus, OSI, XNS, TCP/IP, and it ended up you were doing lots of stuff and lots of under-funded, half-manned projects, and you know what happens when you are spending money and you have nothing to show for it.”

The financial results for 1984 reflected both their sales success and high research and development expenses. Revenues were $5.2 million with a loss of $2.4 million. R&D costs totaled $2.1 million, 40% of sales.

Taking advantage of eager investors wanting to invest in LAN companies, in November 1984, they sold a fourth round of preferred stock, raising $3.2 million, with a post-money valuation of $17 million.


 

[12] “The Front-End approach to local area networking,” Prepared by the Marketing staff of Excelan, Inc., Dec. 15, 1982