GDC looks to rebound from years of trouble

NETWORK WORLD NEWSLETTER: OPTICAL NETWORKING
08/15/05

Dear networking.world@gmail.com,

In this issue:

* GDC looks for new life after years of major ills
* Links related to Optical Networking
* Featured reader resource
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Today's focus: GDC looks to rebound from years of trouble

By Tim Greene

Remember General DataComm? Maybe not. Founded in 1969, GDC was
big back in the days of modems, multiplexers and ATM, but then
hit hard times and had to sell off three of its four divisions
to survive bankruptcy.

Now the largely forgotten company is scrabbling back - in part
by reassembling its former self.

"These guys have a chance of coming back," says Thomas Nolle,
president of CIMI Corp., if the company can capitalize on its
relationships with carriers to sell IP access gear.

No one's saying it's going to be easy. Earlier this summer, the
company reclaimed Ahead Communications Systems, which had been
GDC's ATM division until it was sold in 2001. Back then, GDC's
founder and CEO Chuck Johnson called the deal a way to focus the
company's efforts on "our network access business and make a
return to profitability a more achievable priority."

In the meantime, the company that owned Ahead went bankrupt,
defaulting on a $17 million note it issued to GDC as payment for
the ATM division. As a result, Ahead emerged from bankruptcy at
the end of June a wholly owned subsidiary of GDC.

"The combination of the two companies enhances the equipment
portfolios and service offerings for both GDC's and Ahead's
customer bases," the company said in a news release announcing
the arrangement.

This might sound vague, but that's because the company doesn't
yet have a clear view of what it will do with Ahead, says George
Best, GDC's vice president of sales and marketing. "We're
looking at how we can start to blend ATM with what people want
today. That's how we'll study the issue over the next few
months," Best says.

What people want today, he says, is IP network technology such
as MPLS .

This is the latest turn for a company that at its peak had $300
million per year in revenue and had thousands of employees. Now
revenue is $13.4 million, and the company has about 100 workers.

In GDC's heyday in the early 1990s, its fast-growing ATM
division was one of the cutting-edge companies making
carrier-grade ATM devices, but the expense of running that
division drained the company's cash, says Tim Kraskey, who
helped run the division from 1993 to 1995. "We're the ones that
took the ATM division from a zero to a $45 million [annual
spending] rate in 18 months," he says. "We were stripping cash
out of the company every day, so the company was going to hit a
brick wall unless they got an infusion of cash or moved the ATM
group outside."

Kraskey left in 1995 with two other GDC ATM executives to start
Sahara Networks, which was bought in 1997 for $212 million by
Cascade Communications. Cascade was later bought by Ascend
Communications, which was later bought by Lucent. Kraskey then
worked as a venture capitalist for five years and is now vice
president of marketing and business development for
customer-interaction software vendor Spanlink.

For the rest of this story, please go to:
<http://www.networkworld.com/news/2005/081505-gdc.html?page=2>

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_______________________________________________________________
To contact: Tim Greene

Tim Greene is a senior editor at Network World, covering virtual
private networking gear, remote access, core switching and local
phone companies. You can reach him at <mailto:tgreene@nww.com>.
_______________________________________________________________
This newsletter is sponsored by Avaya
Network World Executive Guide: Evaluating VoIP in the Enterprise

Got VoIP? More and more companies are answering yes...the
reasons vary from cost savings, network flexibility, and ease of
administration. Yet others are drawn to the promise of advanced
VoIP applications such as unified messaging and collaboration.
Register now and get a free copy of Network World's Got VoIP?
Executive Guide, which outlines the keys to successful VoIP
deployments.
http://www.fattail.com/redir/redirect.asp?CID=110539
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