Avant-Garde Computing

~ the goodbye ~

Avant-Garde Computing was incorporated in 1978 in Cherry Hill, New Jersey by Timothy P. Ahlstrom and F. Morgan LaMarche, two men who had spent twenty years each in IBM's marketing department and who put second mortgages on their houses to get the company financed. The first product, Net/Alert, was announced in October 1979. It was a color CRT you could point a light pen at, wired to a logic analyzer, running software that drew the traffic on a mainframe network and printed reports about it.

The money came quickly. Northern Telecom's American subsidiary bought 45 percent of the company for half a million dollars in 1980, and its Spectron division placed the first order, $3.6 million of Net/Alert units, in January 1981. Avant-Garde went public in June 1983 with 1.1 million shares, and Northern Telecom let go of its 45 percent soon afterward, pocketing twenty million dollars. Inside two years of the product's introduction the customer list had Citibank, Chase Manhattan, Xerox and Air France on it, and by January 1984 sixty systems had shipped to places as unlike each other as Walt Disney World and the Library of Congress.

Fiscal 1984 closed at $15.4 million in sales and $1.4 million of net income, both double the year before. Inc. ranked the company the 72nd fastest-growing corporation in the United States. Employment peaked at 215 in August 1985, and that was the same summer the company booked its first loss. Everything after that is a five-year descent that ends in a bankruptcy court in Trenton.

~ the chronicle ~

~ the dinner question ~

Before any of this the two founders had built something much smaller: a device that warned computer operators when a reel of tape was running out. It sold well enough around corporate machine rooms, and they sold the company and its patents to Telegentics of Cherry Hill for a modest profit. Then they spent several years deciding what to do next, and the method they settled on was to buy dinner for executives who ran large mainframe networks and ask them which part of the job was worst.

Network management was the answer. In 1979 a corporate network meant leased lines and terminals in buildings nobody from the data center ever visited, and the normal way to learn that a piece of it had failed was a telephone call from the person it had failed on. Net/Alert took two years to build and was mostly Ahlstrom's design, with LaMarche doing the selling. The competition at the time was Tesdata Systems, which was in financial trouble, and Encom, whose product covered much less.

~ net/guard ~

The second product shipped in May 1984 and it is the odd one to read now. Net/Guard was security for mainframe dial-in lines. It logged every number that called the machine, with the time of each call and how long it lasted, and it held a list of phone numbers permitted to connect and refused the rest. Per user, it limited which functions and which files could be reached, and it could demand answers to security questions before letting anyone in.

That is a firewall, sold in 1984, before the word existed in that sense. The threat model was a modem and a phone number, because in 1984 that was most of the attack surface of a corporate computer, and a product that logged and filtered calls was doing the whole job. Bytex became a customer a month after the launch, and the company finished that fiscal year with its best numbers.

~ five years of losses ~

Earnings dropped for the first time in March 1985, attributed to the loss of the senior sales staff and to a lawsuit filed against the European sales operation in 1983. A $392,000 loss followed that summer, the first in the company's history, and it did not stop. In October 1985 Ahlstrom brought in Michael L. Sanyour, formerly chief executive of Subaru of America, as president and chief operating officer. Sanyour resigned ten months later, saying he had lost interest in the company. The fiscal year ended $5.2 million down and the staff was cut to 160.

The product line kept improving while the finances did not. Net/Command and Net/Adviser arrived in late March 1986, the second using what the trade press of the day called artificial intelligence to suggest fixes for the faults the first one found, and Network World named Avant-Garde the company most aggressively pursuing the same niche as IBM, with Net/Command "the only true competitor to NetView". Competing with IBM on IBM's own mainframes was the position the company had chosen. Two profitable quarters in 1987 broke the streak and then the losses resumed. By May 1988 the executives had Weeden Capital Management, the company's own market maker, looking for a buyer.

~ who ended up with it ~

Ahlstrom resigned in November 1988 citing his health. A $2 million quarterly loss in March 1989 started bankruptcy talks, and in June, after six months of negotiation, Boole & Babbage of San Jose agreed to pay $4 million in cash and assume certain liabilities. Avant-Garde filed Chapter 11 that July as part of the deal, settled a 1985 shareholder class action over its IPO for $1.05 million in September, and was approved for sale by the bankruptcy court in Trenton in January 1990. The takeover completed in February and the company became Boole & Babbage Network Systems. Twelve years teaching an industry to watch its own network, and at the end it could not watch its own books.

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