behind the towers

An unexpected consequence of enterprise networking in the early 90’s was the emergence of private international data networks. An investment bank in Zurich required access to data held in their offices in Manhattan. Stock traders in London needed access to accounts in Milan. Remember, there was no Internet as we know it today. Routers purchased in one locale were connected to distant routers over leased data circuits provided by the common carriers (e.g., AT&T, MCI, Sprint) in the U.S., or the PTTs (Public Telephone and Telegraph operations owned by national governments) internationally. More and more fiber optic cabling was being laid monthly, even under the oceans, to span and connect continents.

To us, this was challenging because purchase decisions in many cases were decentralized – a networking group in the UK may favor Cisco while their counterparts in Italy chose Wellfleet. So much of this dynamic was determined by the relative strength of the local sales teams. Of course, this problem didn’t only arise when crossing country boundaries – it existed wherever influential network engineers within the same organization differed in their preference of router vendors. There was always the question of who was behind any “influence”, but we treated that as simply part of the selling equation.

It became clear that our field sales teams needed additional support from our headquarters operation. To each customer location, we needed to deliver a consistent message, provide rational pricing, and offer a uniform level of pre- and post-sale support. This required the formation of a sales support team under the leadership of Mark Strangio. Besides possessing in-depth product knowledge, Mark had proven himself to be a highly effective one-man sales support team for every part of the U.S.

Gwen and Steve Larsen were quickly recruited by Mark to provide immediate support in providing marketing communications materials, creating a standardized framework for RFP responses, and pricing for products and post-sales support services. 

The sales support team held weekly conference calls with the field sales organization to provide timely updates on new products, product discounts, service and support. The team was extremely prolific at producing product and company presentations, customizing slides for specific opportunities when needed.

It was an immediate, smashing success. Every sales rep expressed great appreciation for the team’s efforts.

The sales support team, unknowingly, also served to alleviate some of the damage done by Dick Kendrick to Wellfleet’s image with certain customer prospects.

On his first international sales trip with Dick to SG Warburg’s offices in London, Jeff Lindholm found himself giving the company presentation to a conference room full of attendees who were all focused on Dick standing in the back. While sitting on a priceless Queen Anne-style credenza, Dick – smoking in the conference room – was flicking the ash from his lit Salem onto an antique Persian rug. The bank’s staff were horrified. I don’t think Jeff got the order that day.

Our sole distributor in Canada, Alan Crawford, was very successful in selling Wellfleet against Cisco. One of the very few universities in the world who chose to buy Wellfleet’s routers over Cisco’s was the University of British Columbia in Vancouver. At one point, they were feeling a little exposed, being the only Wellfleet user in the province. However, the Alan Crawford sales rep managed to get an audience with British Columbia Hydro with Jeff presenting.

Lining the hallway to their conference room were stacks of boxes of roughly 40 Cisco AGS+ routers. Jeff did his best to avoid appearing as though he were on a Bataan death-march in passing them by, proceeded to the front of the conference room and delivered the Wellfleet sales presentation. Afterward, the manager for the networking group of BC Hydro took Jeff aside and told him that he was calling the Cisco sales rep to tell him to retrieve all 40 AGS+ routers, that they were going with Wellfleet.

That evening, Jeff and the sales rep from Alan Crawford enjoyed most of the custom fruit-infused vodkas created by the hotel’s bartender. The next morning, after meeting with some of the engineers from the University of British Columbia, one of them ushered Jeff into a storage room that contained a cot, allowing Jeff to sleep off the fruit-infused effects.

The data communications industry in the late 80’s and early 90’s was new and relatively small, so it was unusual to find multi-generational family legacies. One example was Jeff Lindholm’s father, Carl E Lindholm, who served as executive vice president and director of international operations for Motorola for 23 years, retiring in 1990. Prior to his retirement, Carl made a couple of introductions for Jeff and Wellfleet.

Carl Lindholm had been a pioneer in providing Motorola with access to a more liberalized Chinese economy in the 1980’s, prior to the crackdown by the Chinese Communist Party following the massacre of protesters at Tiananmen Square in the spring of 1989. At a presentation for representatives of the Ministry of Posts and Telecommunications during the winter of 1989, Jeff found himself in a conference room totally exposed to the elements through a number of broken windows, and the heat was nonexistent. The temperature hovered near 10°F, and Jeff was finding it difficult to concentrate on delivering the presentation. However, he managed to save himself by imagining that he was Phil Velella, Wellfleet’s Manhattan sales rep, delivering the presentation in a conference room at Goldman Sachs offices at 85 Broad Street. Presumably, he was also imagining heat warming his hands at the same time.

Jeff’s father provided Wellfleet with an introduction to an incredible sales opportunity with Motorola’s internal networking group. Motorola was a large customer of Apollo Computers’ engineering workstations which used the DOMAIN/OS operating system. DOMAIN/OS possessed some UNIX-like features but was not based on the UNIX kernel for licensing reasons. As a result, the network protocol was also proprietary, and Wellfleet was not interested in supporting it. However, Motorola made it clear to Jeff that they were prepared to hand him an order for $40M of Wellfleet routers if we were to implement routing support for DOMAIN/OS. Jeff took his case to Sev who gave him a flat “No” because of the proprietary nature of Apollo’s network protocol.

Motorola made the identical offer to Cisco, and Egger managed to get four software engineers locked in a room for a long weekend in Motorola’s facility in Schaumberg, Illinois, where they implemented the DOMAIN/OS network protocol in one of their routers such that it was sufficiently demonstrable. Cisco subsequently made enormous marketing “hay” with this effort – it was prominent in the prospectus for their Initial Public Offering the following year.

We had managed to deny ourselves a revenue opportunity that was nearly 10x greater than Wellfleet’s total revenue for the 1989 calendar year. We were so religious about adhering to “industry standards”. Or what we thought were industry standards, de jure or de facto. In any event, DOMAIN/OS wasn’t one of them, and even an order for $40M wasn’t sufficiently persuasive to deviate from our convictions.

In later years, however, Cisco’s own religious fervor was centered on its proprietary routing protocol which they called IGRP, the Interior Gateway Routing Protocol. This was a slightly modified version of Xerox’s Routing Information Protocol (RIP), a distance-vector protocol that some of us had implemented at Interlan years before.

If a customer used IGRP in their network, it was a certainty that every other router in that network was a Cisco router. So the idea of “open systems” and “industry standards” did not stand up to scrutiny in the networks of Cisco’s customers. By the early 1990’s, the importance of open systems networking was becoming apparent to many more customers.

After Wellfleet launched its IPO in the summer of 1991, making presentations at financial conferences became an important corporate communication vehicle for Wellfleet, its customers, and its investors. The growth of internetworking had become a significant driving force of the entire information technology industry. 

A financial conference held in Tokyo by Nomura Securities was to feature presentations from John Chambers, Cisco’s CEO, and Steve Cheheyl, Wellfleet’s CFO. The audience at this conference was predominantly public pension fund managers for large Japanese companies who were interested in investing in companies whose performance was well above the averages of the major stock exchanges. Jeff Lindholm was in Tokyo in support of sales calls for our Japanese distributor when he was notified at the last minute that Cheheyl couldn’t make the conference  and Jeff was to pinch-hit.

The buzz around the conference was precipitated by an incredible announcement just days earlier. Cisco had signed major reseller agreements with practically every important Japanese electronics manufacturer – Sony, Hitachi, Toshiba, Fujitsu among others. This announcement by Cisco weighed enormously on Jeff, making him wonder how best to frame his presentation. On stage, Chambers went first, emphasizing the importance of their reseller agreements with the heavyweights in the Japanese electronics industry, coupled with Cisco’s impressive financial results over prior quarters.

Jeff decided that his best rebuttal was to hammer home Wellfleet’s commitment to open systems networking, particularly the OSPF routing protocol – the Open Shortest Path First standard developed by the Internet Engineering Task Force – in direct opposition to Cisco’s proprietary IGRP. Aided by Wellfleet’s own impressive sales growth data, Jeff aimed to leave what he felt was the best possible imprint on the conference – Wellfleet was leading the industry into the future, not crowing about our past.

Jeff listened to Chambers’ speech, much of which was devoted to amplifying the importance of Cisco’s reseller agreement with the Japanese electronics firms, market share dominance, etc, etc. Jeff’s presentation, on the other hand, emphasized the importance of open systems networks, our adherence to recognized industry standards – protocols, network interfaces, VMEbus – and our commitment to making future investments in those areas. Jeff delivered the standard Wellfleet sales message, in other words.

Afterward, Jeff learned that as a result of his pitch to the Japanese pension funds, they had overwhelmingly purchased Wellfleet’s stock over that of Cisco’s by a ratio of 20 to 1! Evidently the pension fund buyers felt that the long-term value of Wellfleet’s open systems networking and outstanding sales growth far outweighed Cisco’s proprietary protocols and quarterly profitability. The Japanese pension fund managers chose to invest in the future – not the past.

Evidently the pension managers’ decisions did not sit well with Mr. Chambers. He found Jeff at InterOp-Tokyo the next day and took issue with Lindholm’s presentation, claiming that Jeff had used Chambers’ own presentation against him and that he, Chambers, would never do such a thing. Whatever that meant. Chambers’ harangue struck Jeff as just so much whining because Cisco had clearly lost the financial conference battle.

Naturally, many more such battles were to come. The war was far from being over.