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The Rise and Fall of the Modem King
International Herald Tribune
By Victoria Shannon
The Rise and Fall of the Modem King
By Victoria Shannon International Herald Tribune
PARIS - In a field in which everything is focused on the future,
on how fast and smart and cool technology will be in just a
couple of months or years - just you wait and see - sometimes we
need to pause for a little history lesson.
This one is about a modest-sized company based in the Atlanta
suburb of Norcross, Georgia, a business called Hayes Corp. If
you're on the Internet, you probably have this company to thank
for it: Hayes - or rather, its founder, Dennis Hayes - invented
both the personal-computer modem and some of the basic standards
that all of today's modems still answer to, according to the
company and on-line experts. Even if you've never bought anything
from the company, you may know the Hayes name from two distinct
places: on the box of the external modem you buy, describing it
as "Hayes-compatible," or from the list of modem settings your
communications software offers.
On the surface, at least, Hayes's tale appears to debunk at least
two clich?s: that lightning doesn't strike the same place twice,
and that we learn from our mistakes.
But first, a look back. Dennis Hayes, the chronicles tell us,
left the Georgia Institute of Technology in the mid-1970s to work
at a company called National Data Corp. It was there that he
realized the need to make modems that could be configured with
software to respond to various orders, such as "answer on first
ring." That would be a better way than building those different
responses into the hardware, which would require that there be
many different kinds of modems.
He and a partner created the first circuit boards imbued with
that ideal in 1977 - not in his garage, as legends dictate, but
close: on the dining-room table in his home.
-
HAYES MICROCOMPUTER Products Inc. was founded with a $5,000
investment in January 1978, and Mr. Hayes went on to become the
modem king, far surpassing any rival in sales and having his
name forever associated with any modem sold to the masses.
The modem brands by which you may know him today are Optima,
Accura, Practical Peripherals and Century. The commands by
which you may know him begin with "AT" in your software's
initialization string.
Last autumn, the company marked 20 years as a pioneer in two
ways: by selling special 20th-anniversary modems signed by
Mr. Hayes himself and by filing for bankruptcy-court protection.
Alas, it was the second time in three years that the first name
in modems had had to seek refuge in bankruptcy court. The
lightning bolt of financial and management troubles had struck
again.
But Hayes is also a case study in yet another maxim: Getting
there first or best does not guarantee success. Just look at
International Business Machines Corp. (first out with the
personal computers that are today's "WinTel" standard). Or
Apple Inc. (best, with its Macintosh line). Why does this happen?
Some say the egos of pioneers subsume their better business
judgments. Some blame unique intersections of events and
circumstances.
In Hayes's case, the company apparently had manufacturing
problems and other production snafus that left it in the lurch
the first time it filed for bankruptcy protection.
-
The second time, the company said it was a victim of a cash
shortage caused by stagnant sales that had plagued all modem
makers in the transition from 33,600 bits-per-second speeds to
56k.
Asia, too, before its recession, was a strong market for Hayes,
and its economic collapse reverberated in the company. But Hayes
was still the No. 2 seller of modems, behind - though far behind
- 3Com's U.S. Robotics. In October, it even introduced a
next-generation modem based on the "digital subscriber line"
technology that really ramps up Internet transfer speeds.
Can a technology visionary and legend fail and make a comeback
- twice? Is there really such a thing as "revenge of the nerds?"
Maybe. Just ask IBM, which is certainly a success despite its
forfeiture of control of the PC business. Or ask Apple, which
is now riding high after many predictions of its imminent demise.
But don't ask Hayes. Its creditors ran out of patience and
financing and pulled the plug this week. On Monday, the Hayes
business shut down and prepared to liquidate.
Victoria Shannon edits TribTech and can be e-mailed at:
tribtech@iht.com.
The organization that now sets modem standards is the
International Telecommunication Union, found at www.itu.ch. The
latest, and last, analog modem standard is called v.90, and
everything you ever wanted to know about it is at www.v90.com.
For more basic information, an on-line retailer has posted a
simple modem dictionary at www.modemshop.com/mdic210.txt.