Chapter 13 - Data Communications: Adaptation 1979-1986
As of 1983, Codex, the largest Data Communication firm and the leading supplier of data communication networks, had yet to enter the T-1 market. Clearly, Codex had lost its entrepreneurial drive and, thus, would increasingly depend on other firms for innovation through OEM or distribution agreements. The inability of Codex management to manage innovation development would acknowledged years later by John Pugh, vice president of marketing. Both he and James Storey, Codex’s President, believed in the importance T-1 multiplexers:
We reorganized in 1982, and they took marketing and broke it up and we formed product lines. T1 was in the multiplexer product line. We knew they were falling behind, and Jim Story was extremely frustrated, because he could not get the programs moving. I made a major presentation to Motorola, and talked about the tariff structures, why you had to be in this business, what the threat was to Codex in the analog business, and that we had to move. And Story, president of the company, bought it.
In 1983, management had no choice but to conclude that their internal development efforts were a failure and began negotiations to OEM a T-1 multiplexer from Avanti. In 1984 Codex introduced its 6240 T-1 multiplexer, a repackaged Avanti point-to-point multiplexer. Codex represented 40% of Avanti’s sales that first year, but a few million dollars represented little market presence.