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Chapter 12 - Networking: Market Order: LANs 1983-1986

12.18 Bridge Communications

The management of Bridge Communications had drawn bead on Ungermann-Bass, defining their market as general purpose LANs, not PC LANs. To compete successfully meant staying technologically ahead of UB in terminal servers, adding broadband products, finding a way to offer PC products, offering both token ring and factory automation, i.e. MAP, products, and distinguishing their approach with better inter-network functionality. They had already leaped ahead of UB with their first-to-market terminal servers employing 16/32 bit microprocessors. Broadband products were under development. As for PC Ethernet controllers, they turned to their relationship with 3Com with which they already had a joint development contract. Judith Estrin recalls:

I knew Bob Metcalfe, and we were located very close. Then we had a reference sell arrangement with them, and then we OEMed their product.

Development of a broadband product was relatively straightforward but manufacturing RF modems was not so easily mastered. Knowing they needed help, they acquired Coherent Systems in March, 1985, the same month they announced their broadband controllers. Bill Carrico recalls eliminating the UB advantages:

All that kind of went away when we introduced broadband, and the main thing broadband’s good for, the main place we’ve always sold broadband, is where people just wanted the long distance.

In 1985, sales soared 128% to $30.5 million with net income of $4.2 million.

In April 1986, Bridge Communications went public, raising $ 22.3 million with a company valuation of $ 96 million.

1986 proved to be another successful year with sales increasing 51% to $46.2 million, albeit net income grew more slowly to $5.1 million. The costs of pursuing a general-purpose LAN strategy showed signs of catching up with Bridge just as it had with UB.