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Chapter 10 - Networking: Market Competition 1981-1983

10.11 Codex

Once Codex had been integrated within Motorola, Motorola executives encouraged Codex management to begin doing strategic planning without concern for resources but to focus on how to grow into a much larger company. John Pugh, who was head of strategic planning for Codex during this period, remembers:

Motorola kept pushing you on what you’re going to be when you grow up. You can do anything you want except acquire IBM. And so we did a lot of these studies. We read all the reports that everybody else read, and the PBX and teleconferencing were going to be multi-million dollar businesses. And they were all related to telecommunications. And the LAN business was going to be a good business. We had actually spent a great deal of time and effort as a result of pressures from Motorola on the PBX.

In 1982, Art Carr was promoted to head of the newly formed Information Systems Group comprised of Codex, UDS, ESE and the recently acquired Four Phase, a computer company in California. Carr recalls his attitude towards LANs:

Four Phase was such an utter disaster that in ‘82, ‘3, and ‘4. I had 400 some thousand miles a year going back and forth to Four Phase. We got a late start on LANs. That was during my time, and we got basically a no start. I think that we were all very skeptical about the LAN business. We started hearing about LANs from the Chief Executive Office of Motorola within a year of being acquired. There were a lot of magazine articles about LANs but there weren’t any LANs, and we got into a kind of a contest with them, to some extent, that had a negative connotation in it, that I was digging my heels in, saying: “I know what I’m doing. Get off of my ass.

Only the pressure to get into the LAN business did not back-off, surely influenced by Motorola’s management knowing IBM was going to introduce a token ring LAN; having competed for the semiconductor contract and lost to Texas Instruments. Pugh remembers:

You keep getting notes: “What about the LAN business? What are you guys doing in the LAN business?” What it would be was an Electronic News article of something does this or that. So these things would come down to me, and I was in strategic marketing at that time, and we’d take a look at it, and we would send them back an answer of, you know, “We’re looking at it.” So I kicked off a study within the company to say, “What is this LAN business?

The blue-covered report came out in November 1982. Pugh remembers:

We convinced the company that that was a good business. It was a necessary business because we were not going to be in the PBX business. We had decided that, and that we felt capturing the data at its source was going to be important to maintaining our strategic thrust outside the walls.

Not having anyone on staff with the expertise to lead their efforts, they hired an executive search firm who turned up a name too good to be true: Murray Bolt. Who better than the manager heading IBM’s token ring project? Bolt, knowing he was in the penalty box for the delays in the token ring project, jumped ship and joined Codex in December 1982.