StrataCom

» see stratacom.com as it lived, on the wayback machine

~ the eulogy ~

The paperwork that ends a public company is a Form 15, and StrataCom's was signed on 9 July 1996 by John T. Chambers, described on the signature line as President and Chief Executive Officer of StrataCom, Inc. Chambers ran Cisco. The merger had closed that morning after a stockholders' meeting at ten o'clock at 1400 Parkmoor Avenue in San Jose, and the form's question about the approximate number of holders of record got the answer 1. Seven weeks earlier there had been 666 of them, and more than eighteen thousand people holding the shares through brokers.

It began as a leftover. Paul Baran, whose RAND memoranda on distributed communications had set out the idea of chopping messages into blocks two decades before, spent the early 1980s running a company called Packet Cable, later Packet Technologies, that was trying to put interactive services on cable systems. Inside it, a team built a box for Michigan Bell that did the job of a telephone company's channel bank and did it better: ninety-six voice calls carried on a line sized for twenty-four, using silence suppression and 32 Kb/s compression. When the oil company backing it ran into trouble as crude fell to ten dollars a barrel and turned its equity into secured debt, the engineers on that telephone project were allowed to buy their own work out of the wreck. The vehicle was incorporated in California in 1986 and reincorporated in Delaware the next year.

Baran's own account of this, given as a keynote in 1999, is careful about what he did and did not do. He lists seven companies he founded or co-founded over his career and StrataCom is not among them. He seeded it rather than started it, and the line that he founded StrataCom appears in no account of his own.

~ the dossier ~

~ what a fast packet was ~

StrataCom sold what it called FastPacket networking: cell switching, done before the standard existed. Its early cells were twenty-four bytes long because that was what the voice work wanted, and when ATM settled on fifty-three bytes the BPX switch of 1993 went and met it there. The press release that announced the sale lists the catalog as it stood: IPX, IGX, BPX, AXIS, FastPAD, EdgeConnect.

Frame relay is what made the company money. By the filing for the merger StrataCom had over 450 users in the enterprise market and a customer list the filing names outright: the British Post Office, NationsBank, AT&T, British Telecom, CompuServe, LDDS/WorldCom, Pacific Bell. Revenue went from $39.5 million in 1991 to $331.7 million in 1995, a doubling in 1994 and again in 1995, and the first quarter of 1996 was already running more than forty percent ahead of the first quarter of the year before. The International Directory of Company Histories puts its share of the worldwide frame relay market at 41.1 percent, without naming the year or the firm that counted, so take the number as a shape rather than a measurement.

~ fifty dollars a share ~

The agreement is dated 21 April 1996, a Sunday, and names Cisco's merger subsidiary Jet Acquisition Corporation. The announcement went out the following day. Each StrataCom share would be exchanged for one Cisco share or fifty dollars of Cisco stock, whichever was worth more, with the ratio capped at 1.2195 if Cisco's average price fell under forty-one dollars. StrataCom had closed at $38.75 on the Friday, so fifty dollars was a premium of twenty-nine percent.

Cisco's own release valued the deal at approximately four billion dollars against its closing price of $47.75 on 19 April. By 6 June the proxy was computing $4.39 billion, because Cisco stock had gone to $55.75 and the consideration was denominated in it. Both numbers are correct on the day they were measured, and the single figure people quote now travels without one. StrataCom holders ended up owning about 11.8 percent of Cisco, and Dick Moley, who had come over from ROLM to run StrataCom and did run it for most of its life, took a seat on the Cisco board.

~ where stratacom.com goes ~

Cisco kept the domain and gave it a job. By December 1998 www.stratacom.com was serving Cisco Connection Online in full, the same homepage as cisco.com, nav bar and all, with WAN Switches sitting in the product list where StrataCom's own machines had ended up. Today the domain does one thing: it redirects to the 1996 press release announcing the acquisition, at newsroom.cisco.com, and Cisco returns a 404 for it. The last instruction the name carries points at a page its owner deleted.

The switches lasted much longer than the company. The people became Cisco's Multi-Service Switching Business Unit, the boxes kept selling under Cisco part numbers, and the BPX 8600 chassis was finally taken off sale on 31 January 2006, with support running to 1 February 2011. That is fifteen years past the Form 15, for a product line descended from a channel bank built for Michigan Bell.

~ no consumer edge ~

Nobody ever saw a BPX. Carrier switching gear lives in rooms that have badge readers on them, bought by people whose budget line says transport, and the whole ten years of this company passed without a single thing it made being visible to anyone paying a phone bill. By the summer the merger closed I was in middle school in Turkey and the household question about telephony was still whether the line would hold for an hour. The honest version of my connection to StrataCom is that some of the minutes I later paid for crossed machines of this kind, and neither I nor the person billing me had any reason to know the brand.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »