Gandalf Technologies

~ the last words ~

Gandalf Data Communications Limited was incorporated in Ontario in 1971 by Desmond Cunningham and Colin Patterson, who ran the business at first out of the lobby of the Skyline Hotel on Albert Street in Ottawa. It became Gandalf Technologies Inc. by articles of amendment on 22 July 1981. For most of the two decades that followed it made a living from a problem that no longer exists: getting terminals to reach computers somewhere else in the building, or somewhere else in the country.

The company's own filings record the shape of the fall without needing a narrator. On 31 March 1992 Gandalf had 1,616 employees; two years later it had 1,127, and by 1996 it was down to 812. Revenue for the year to July 1991 was US$129.0 million and for fiscal 1993 it reached US$160.9 million, the highest figure in the filings I could read, after which it fell every year to US$116.5 million in fiscal 1996. Fiscal 1994 on its own lost $47.2 million, of which $28.7 million was restructuring.

On 25 July 1997 a court granted Gandalf Technologies and its subsidiary Gandalf Canada protection from their creditors, running to the end of October. The company's filing with the American regulator stated in plain words that it had not received a firm and binding offer for the company. Thirteen days later, on 7 August, the sale closed. Mitel took the remote access business for US$14.9 million plus half the receivables at closing, the services business was left out of it, and that was the end, twenty-six years after the hotel lobby.

Gandalf finished dying in August 1997. My own first dial tone came a year after that, which places this company just outside the edge of anything I could have witnessed. By the time there was a modem in the house in Turkey, the catalog above had already been sold off in pieces.

~ the record ~

~ what a pacx was ~

The early products were remote terminal half-bridges fed by large multiplexers, and Gandalf named the switch a PACX by analogy with the PABX sitting in the same building handling telephone calls. The analogy was exact, and it was the whole pitch. A company had a roomful of terminals and a small number of costly host computers, and the PACX let any terminal reach any host across shared lines, the way a telephone switch let any extension reach any outside line.

By the 1990s the names had grown. XpressConnect went out to the remote worker, while XpressStack and Xpressway were the chassis in the computer room, and the filings describe them as concentration and internetworking gear for mixed traffic over leased lines. The words got longer while the market got smaller. Every item in that catalog assumed a world where moving bytes between two buildings was difficult enough to be sold as a product.

~ the landlord ~

The Computer Business Review covered the creditor protection on 28 July 1997 and set out what the preceding months had held. Gandalf had cut 180 jobs and had been looking since February for an investor or a buyer for all or part of the company, while running on an interim credit facility from the Royal Bank of Canada. The month before the court order, the landlord locked the company out of its own premises over taxes owed on the property, and Gandalf got back in only after a court ruled in its favor.

None of that is unusual for a firm in its last summer. The gap between the two ends of the story is what stays with me. A business that had employed more than sixteen hundred people five years earlier went, in the end, for less than ten thousand dollars a head at that size, to a telephone equipment company up the road in Kanata, for the part of the catalog that still had paying customers in it.

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