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

12.22 Codex

Selling LANs proved to be much more difficult than management of Codex had imagined. In 1985, the lure of heading a high-profile start-up was too tempting and Murray Bolt left Codex for the fourth generation CBX firm, Ztel Corporation. James Storey, president of Codex, turned to John Pugh to replace Bolt. Pugh remembers:

It wasn’t all Murray’s fault, a lot of it was the company couldn’t afford to put the money into it. I came in and the first thing I did was get rid of the head of marketing, because he had no background in local area networking. I brought in another guy that had a limited background. And I essentially had to get rid of him, too, because he just didn’t bring enough expertise. We were foundering from a marketing standpoint. I think we had good engineers. But we couldn’t define the programs well enough so that they would stick. And at the same time, I was suffering from funding.

Then Codex realized they could not sell the product they were OEMing from Ungermann-Bass, especially when competing for the same customer. Again Pugh recalls:

It was a great deal of investment on our part to get Ungermann-Bass started. The problem was we kept competing. They were in the process of developing their product line and broadening their product line and for us to bring in ….. we just couldn’t keep up with them. We could not evaluate their product and sell it on a timely basis. Their salesman was always out ahead of us saying, “You need that, fine, we’ll give you that. We started doing our own product line that was going to use some of the Ungermann-Bass software that we paid them a license for. And we brought our own line in, and we started focusing on that. And the idea was eventually to move Ungermann-Bass out and have our own product line. About the middle of that, Storey left and Motorola moved John Locket up as president.

The lack of revenue, when combined with high expenses and many other profitable, and more strategic, products to invest in, led to more changes. Pugh remembers, “So the focus in terms of the LAN business started going down.”

By 1987, Codex had attempted and failed to enter the LAN business.