Back to top

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

12.21 Communications Machinery Corporation

Larry Green, President and co-founder of Communications Machinery Corporations (CMC), had a vision mirroring that of Excelan: design an Ethernet controller with sufficient intelligence to off-load the host computer of LAN protocol processing and focus on the engineering workstation market. By virtue of having built an emulator for the LANCE Ethernet controller chip designed by DEC, and being fabricated by Advanced Micro Devices and Mostek, CMC created a line of Ethernet controllers around the LANCE chip. In June 1984, they raised $4 million of venture capital.

Then a series of missed sales and engineering projections, caused in measure by delayed shipments of LANCE ships, prompted investors to make management changes. In 1985, a new president was recruited to replace Green who resigned. Sales grew slightly in 1985, to $1.8 million, putting more strains on cash and forcing a firm-saving financing of $600 thousand in December 1985. Sales grew to $3.5 million in 1986, but a loss of $200 thousand still resulted. A combination of Excelan signing up key OEMs and the LANCE chip being late to market left CMC struggling for a way to be successful.