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Chapter 09 - Networking: Emergence 1979-1981

9.14 Sytek: A Broadband Network and Needing Cash

In February 1981, Sytek began shipping their comparatively inexpensive two-port broadband terminal server: LocalNet 20. A direct consequence of its Lincoln Lab development contract, two LocalNet 20s, costing a total of $2,500, made a network.

Although both Sytek and UB, with its NUI-1, positioned their products as terminal servers, Sytek’s customers tended to be those wanting to build campus-wide networks whereas UB’s wanted departmental networks. In practice, Sytek and UB sold to any customer without thought of niches or market segmentation, for the lack of buying customers dwarfed the annoyances of competition, a condition soon to be exacerbated by an onslaught of companies offering every imaginable means of interconnecting computers and peripherals.

In having diverted resources to LocalNet 20, consulting revenues contracted, and Sytek management had little choice but to raise capital. They began talking to venture capitalists.