Networking: Turbulence 1981-1982
The PBX, the IBM PC and the Chaos of Competition
No one was happier than the management team of Sytek when Wang announced its broadband local area network, Wangnet in June 1981. Michael Pliner remembers:
“Wang tried to take a stab at the business, but couldn't develop a product. Wang was great for us by the way. Wang was going out telling everybody that broadband is great and couldn't deliver it, ok, and we let them fight Ethernet. I mean, we just said, "If you want broadband, we can deliver, here it is," and it worked. Broadband systems, actually worked pretty well over large, campus-line networks, so while UB was specialized in department networks, Ethernet type networks, we were specializing in campus networks.”
Sytek’s growth required more capital than they had, so Pliner began the search for investors. His quest took Sytek down a different path than Ungermann-Bass and 3Com. Pliner remembers:
“We went up to raise some money for the company and we looked at venture investors and others and then General Instrument (GI) found us. A guy by the name of Lou Solomon, who I have a hell-of-a-lot of respect for, had the vision, this guy was thinking 2-3 years out ahead. He said, "You guys got the technology for us to bring data into every home and every business in the city." So, you think local networking was an interesting market now, think about the Metropolitan-Network on cable TV. Now, remember, GI was the IBM of the cable industry, ok. So, with Lou Solomon's vision and the kinds of things that we were looking at, I said, "Take some money from these guys and let's go even further ahead than just local networking, let's get into Metropolitan-Networks, because, I mean all the cable TV, and GI, was doing fantastic. So we took their investment.”
Before yearend 1982, GI invested $6 million with the right to invest more in the future to bring their ownership to 51% of Sytek.