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

Entrepreneurial Capitalism & Innovation:
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.

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

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

Ch. 9: Creation

Ch. 12: Emergence



Chapter 7
Networking: Emergence 1979-1981
LANs and DataPBXs

7.15     Codex: The DataPBX 1978-1981

When Codex began shipping their yet-fully-working 6000 Series statistical multiplexers in 1977, they had to ship engineers to customer sites to make it work. Being offsite, out from under the watchful eye of management, rather than down the hall or in the building next door, engineers heard and identified with customers’ plights. Displaying initiative or a just-for-the-joy-of-doing-it, an engineer created a prototype of a new switch before approaching management in 1979 seeking to start a new product line. Pugh, now in strategic marketing after the merger with Motorola in 1978, recalls:

"It was a development program that was not spec’ed [specified] by marketing. It was something that one of the engineers did for a couple of customers. And apparently our controls weren't tight enough, because we let him do it. And then he came to marketing and he said, ‘Gee. I got this thing here that will do all these things.’”

In 1980, Codex introduced their IMS 7700, a product that switched incoming telecommunication links, whether leased line or dial-up, to multiple computers. It, like their statistical multiplexers, required extensive configuration to satisfy a customer’s needs. From field experience, they learned that it could be configured as either a dataPBX or a matrix switch. Pugh remembers:

"The dataPBX was really more of a premise-type product as opposed to wide-area network product which the matrix switch was. And the matrix switch was a survival-type product which was involved in dedicated lines and the dataPBX was really a dial-type product and we weren't strong in the dial business.”

Codex’s management, meanwhile had defined a new post-Motorola merger vision of: “integrated communications.” A vision that left uncertain room for dial-up products. Carr summarized the vision to the press in April 1981 as: [22]

"Codex products will tackle problems of exchange, getting information into the network; transport, getting information through the network to its destination; and command, controlling the network from a central site.”

Codex’s definition of a network was a wide area network, from the building out into the network as it were, not an intra-building or premises-type network. As a definition, it would lead Codex into new product growth directions, as well as keep them from investing in products that were seen as intra-building or premises-type, such as dataPBXs and LANs. Nevertheless, in an example of the sheer momentum of having existing products, before the end of 1981, Codex introduced their new IMS 7800 dataPBX and matrix switch. [23]


Both Micom and Codex introduced dataPBXs; not from having a grand vision of emerging market dynamics, but in response to specific customers needs to interconnect their growing base of terminals to their growing numbers of computers. Creating a dataPBX proved to be a small step after mastering statistical multiplexing. No big decisions committing large development programs or extensive market research were required.  Not having done so, however, would have unexpected consequences.

[22] Quote from Computerworld, April 20, 1981, pg. 81

[23] DATAPRO Feb. 1986 C12-010-302