Chapter 12 - Networking: Market Order: LANs 1983-1986
Excelan’s efforts to engineer too many products for too many emerging LAN markets caught up with them in 1985. Kanwal Rekhi, Vice-President of Engineering remembers:
By the end of ‘84, there was real trouble because we were spending much faster than we were bringing the revenue in, and as it happens in any start-up, there is a day of reckoning, giving too much for the resources you have and, as a result, you’re not satisfying anybody.
In August 1985 the Board felt the need to make changes. Rekhi remembers:
So the company went through a re-organization. I was the VP of Engineering, and Dr. Inger Singh, CEO, was fired by the board because we weren’t making our business plans. So, once he was fired, I was made interim president. I was very worried that we weren’t doing the right things and, so right after I became interim president, we’re doing nothing but TCP/IP and Ethernet.
Excelan retrenched, focusing on the engineering workstation wisdom, not the office market, and on only Ethernet and TCP/IP. They labeled their focus as high-speed computer-to-computer connections.24
The financial results for 1985 reflected the benefits. Sales increased 90% to $9.9 million with net income of $100 thousand. In a presentation prepared for investment bankers dated December 1985, management highlighted their sales growth, introduction of personal computer controller, more DEC-compatible products and the addition of three more sales offices. In the same presentation, they outlined their future products for the second half of 1986 as including MAP protocols, token ring, token bus, and a terminal server. The lure of building a bigger company was hard to forgo.
Rekhi turned to consultants for instant help, one being Dan Lynch, a TCP/IP expert from his Arpanet experiences.
In April 1986, the search for a president ended with the hiring of C. Richard Moore. Moore had been president of an engineering workstation company and previously had held a number of positions within Hewlett-Packard. Sales of 1986 increased 120% to $22 million with net income of $2.4 million. Excelan had averted disaster.
“Excelan’s position in the LAN industry,” Kanwal Rekhi, Nov. 30, 1985