Madge Networks
Encyclopedia
Madge Networks NV
was a networking
technology company founded by Robert Madge
, and is best known for its work with Token Ring. It was a global leader and pioneer of high-speed networking solutions in the mid-1990s, and also made significant contributions to technologies such as Asynchronous Transfer Mode
(ATM) and Ethernet
.
The company filed for bankruptcy in April 2003. The operational business of the company is currently trading as Madge Ltd. in the UK
. Under a deal with Network Technology PLC
, the company acquires the rights and copyright to Madge's products, brand and website, as well as the remaining inventory. The assets will be absorbed by Network Technology PLC subsidiary Ringdale
Limited, making them the world's largest supplier of token ring technology.
. Headquartered in Wexham
, England
, Madge Networks developed Token Ring, Ethernet, ATM, ISDN, and other products providing extensive networking solutions. The company's products ranged from ISA
/PCI
network adapters for personal computers to work group switching hubs, routers, and ISDN backbone
carriers. Madge focus was to provide convergence solutions in Ethernet, Token Ring, ISDN, and the then emerging ATM networking technologies. In addition to its Wexham headquarters, Madge operated main offices in Eatontown
, New Jersey
and San Jose
, California
, as well as offices in more than 25 countries throughout the world.
Founded in 1986, Madge Networks was a pioneer in the networking market, the emergence of which went on to define internal and external communications among corporations in every industry. Madge Networks was one of the world's leading proponents of Token Ring technology, producing ISA, PCI, and PC card adapters, switches
, stacks, and other devices required for its implementation of Token Ring technology.
In the late 1990s Madge Networks had taken a leading role in developing the standards and first implementations of emerging High-Speed Token Ring (HSTR) technology. This newer protocol provided for a dramatic increase in data transmission bandwidth
, while remaining compatible with first-generation Token Ring technology.
The sale of their Ethernet technology (LANNET) to Lucent Technologies in July 1998 reduced Madge Networks' presence in the Ethernet market, a rival networking technology to the Token Ring standard. The company tightened focus in the ATM market, emerging video conferencing
technology and other ISDN carrier applications. Madge produced switching, routing and WAN
-LAN
interfacing equipment to facilitate both intracorporate and intercorporate video conferencing. In the ISDN market, the trend to use digital telephone lines to increase data, voice, and video transmission bandwidth, led Madge to develop a line of Edge Switching Nodes (ESNs) and other miscellaneous carrier equipment.
farm.
in the adapter market with their 3C509 series, then swiftly moving on to the Ethernet switching. Other companies avoided the Token Ring market in preference to IBM
. Meanwhile, Madge developed a profitable business operating in IBM's shadow. Madge Networks introduced its first Token Ring products by 1987. The company quickly opened up a second headquarters in San Jose, placing the company closer to the heart of the worldwide computer industry, with advantageous results: the company's US
customers believed it to be a large British company, while its UK customers saw it as a successful US company.
Robert Madge led his company to extending the technology, introducing new products, such as the Smart Ringnode in 1989 and the company's Fastmac technology in 1990, bringing it to the forefront of Token Ring research and development. By the early 1990s the company had outpaced even IBM's development efforts, with the larger company recommending Madge Network's products to its own customers. An early boost came from the licensing of Madge's Fastmac technology to Cisco Systems
in 1990.
The company's revenues for 1990 reached $18 million. One year later, Madge's revenues nearly doubled, to $34 million. The rise of computer networking, however, had only just begun. By the following year Madge's revenues would near $100 million. At the end of 1992 the company had managed to increase its share of the Token Ring market to seven per cent – still minor compared with IBM's 76 per cent share. Until the early 1990s, Madge had been focusing on producing adapter cards, which were fitted to individual computers to connect them to the network. The company's expanding product line soon included the hubs and switching components needed to route data and allow the adapter cards to communicate.
Madge Networks rose rapidly through the 1990s, boosted by the boom in computer networking and by its own leading Token Ring technology. Madge successfully chipped away at IBM's Token Ring market lead, building Madge's share to more than 16 per cent by mid-decade. Overall, IBM's market share quickly dropped below 50 per cent – a movement aided in part by licensing agreements between Madge and networking specialist Cisco Systems.
, Germany
, Hong Kong
, Japan
and France
and building its San Jose office into a second headquarters. To fuel the company's growth, Madge Networks went public in 1993, offering more than six million shares on the NASDAQ
stock exchange. By 1994 Madge Networks' revenues had topped $213 million, an impressive growth, but still minor in comparison with its main market competitors, Cisco Systems, 3Com Corp., Bay Networks
, and Cabletron Systems
. In addition, many Fortune 1000
companies sought a broader range of networking products than Madge could offer. Although Madge had performed well in the Token Ring arena, its Ethernet capability was lacking – even as Ethernet became the networking technology of choice in the mid-1990s.
In 1995 Madge Networks and Lannet Data Communications (of the RAD Group
of companies), an Israel
-based networking specialist with a focus on LAN switches for Ethernet
-based networks , agreed to merge operations in a stock swap valued at some $300 million. Lannet's operations were merged into Madge Networks, creating Madge's Ethernet division. With combined revenues of $283 million, Madge and Lannet were the smallest of the top five networking market leaders, but the combined company's product line offered a complete array of Token Ring and Ethernet products.
The merger gave Madge the ability to combine the rival networking technologies into hybrid systems and the capacity to bridge the company's products into the latest networking technology, ATM, or asynchronous transfer mode. By the mid-1990s companies were straining the limits of the existing networking technologies. As corporations joined more and more of their work force to the company network, their networks quickly ran short of bandwidth for transmitting data. The arrival of new networking applications – in particular, video conferencing and video data transfers, not only pushed bandwidth needs to the extreme, but threatened to cripple networks entirely. ATM's more efficient use of packet technology offered the prospective of dramatic bandwidth gains. Adoption of the technology would require corporations to rebuild their networking infrastructure, and Madge Networks readied not only its own ATM products, but also the hubs and switches needed to bridge existing Token Ring and Ethernet equipment to the new technology. The Lannet merger enhanced Madge's portfolio of LAN switches, needed to connect Ethernet and Token Ring stations to corporate ATM installations.
An important consideration is that Madge focussed on ATM as a Local Area Network (LAN) technology, and not as a carrier backbone Wide-Area Network (WAN) solution. In fact, Madge bet on ATM replacing not just Token-Ring and Ethernet, but even TCP/IP as THE desktop PC and laptop networking technology. This proved to be a costly mistake, when enterprise customers did not adopt ATM, opting to go to switched Ethernet instead. The company's ATM products were mostly unsuitable for the Carrier market, and so most of the company's investment in future products did not produce any returns. This wrong market/technology focus was a large factor in Madge's eventual failure.
Aiding Madge's growth was the 1995 agreement with Cisco Systems, by then global networking leader, to incorporate Madge's Token Ring switches into Cisco's products and to license other parts of Madge's Token Ring technology for future Cisco designs. At the same time, Madge gained access to Cisco-developed LAN and WAN switching software. Following on the Cisco agreement, Madge also prepared to step up its manufacturing capacity, with a new facility in Ireland
.
By the end of 1995, the merged Madge-Lannet contained some 1,400 employees and achieved revenues of more than $400 million, all but 15 per cent of which coming from outside its UK base. The company's entry into 1996 continued its expansion efforts, including adding to its Israeli manufacturing capacity with a new $10 million plant in Jerusalem. In February 1996, acquired Teleos Communications Inc., along with that company's ISDN and WAN access products. Based in Eatontown, Teleos, which posted revenues of $24 million in 1995, cost Madge $165 million in a pooling of interests transactions. At the same time, Madge again deepened its relationship with Cisco Systems, broadening the company's licensing agreements to include Cisco's IOS software
. This agreement never extended beyond the Sefton Park R&D facility and few customers were even aware of it or ever saw benefits from it; neither did their own support engineers.
At the end of 1996 Madge rolled out a new line of products to enhance its portfolio and bring the company into a new and increasingly important market: video conferencing. Madge's products placed the company in position to offer bridge solutions between the formerly independent data and video transmission technologies. Although the video conferencing market had yet to mature, Madge's move appeared to place it firmly near the lead to compete for what analysts considered a future boom market.
Madge's restructuring continued to occupy the company into 1998. In late 1997 the company spun off its Ethernet division into a separate subsidiary, once again named Lannet. After denying early reports that it was looking to divest its Ethernet business, Madge agreed to sell Lannet to Lucent Technologies for $117 million in July 1998. During this period, Madge also moved to exit the manufacturing business, selling its Ireland plant to Celestica
, an electronics contract manufacturer. The total cost of Madge's restructuring passed $50 million, but the company's renewed commitment to Token Ring technology appeared to have stabilized the company's balance sheet. By mid-1998 Madge had once again returned to profitability, but with only fifty or so employees.
In the late 1990s Madge's attention focused on developing the next-generation Token Ring technology, High-Speed Token Ring, offering scalable bandwidth from 16 Mbit/s to 100 Mbit/s, with future speeds reaching into the gigabit ranges. But abandoning Ethernet marked the beginning of the end for Madge Networks, a move capped by the zero return on extensive ATM investment, something they would never recover from. After 1998 they transformed yet again with wireless 802.11
technology, without success.
Madge Networks has now been absorbed into Ringdale Limited through a management buyout after Madge Networks filed for bankruptcy in 2003.
Naamloze Vennootschap
is the Dutch term for a public limited liability company. The company is owned by shareholders, and the company's shares are not registered to certain owners, so that they may be traded on the public stock market....
was a networking
Computer network
A computer network, often simply referred to as a network, is a collection of hardware components and computers interconnected by communication channels that allow sharing of resources and information....
technology company founded by Robert Madge
Robert Madge
Robert Madge is an entrepreneur and technologist. In the 1980s, he founded and was chairman of Madge Networks, a pioneer of high speed networking technology. He is currently the President of IDTrack, a European Association for identification and traceability of goods based on technologies such as...
, and is best known for its work with Token Ring. It was a global leader and pioneer of high-speed networking solutions in the mid-1990s, and also made significant contributions to technologies such as Asynchronous Transfer Mode
Asynchronous Transfer Mode
Asynchronous Transfer Mode is a standard switching technique designed to unify telecommunication and computer networks. It uses asynchronous time-division multiplexing, and it encodes data into small, fixed-sized cells. This differs from approaches such as the Internet Protocol or Ethernet that...
(ATM) and Ethernet
Ethernet
Ethernet is a family of computer networking technologies for local area networks commercially introduced in 1980. Standardized in IEEE 802.3, Ethernet has largely replaced competing wired LAN technologies....
.
The company filed for bankruptcy in April 2003. The operational business of the company is currently trading as Madge Ltd. in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. Under a deal with Network Technology PLC
Network Technology PLC
Network Technology plc is a public limited company listed on the London Stock Exchange.The company's headquarters are in Burgess Hill, West Sussex, England....
, the company acquires the rights and copyright to Madge's products, brand and website, as well as the remaining inventory. The assets will be absorbed by Network Technology PLC subsidiary Ringdale
Ringdale
Ringdale is a limited company operating in the United States, United Kingdom and Germany. It is a wholly owned subsidiary of Network Technology PLC, a company listed on the London Stock Exchange....
Limited, making them the world's largest supplier of token ring technology.
Technology development
Madge Networks was once one of the world's leading suppliers of networking hardwareHardware
Hardware is a general term for equipment such as keys, locks, hinges, latches, handles, wire, chains, plumbing supplies, tools, utensils, cutlery and machine parts. Household hardware is typically sold in hardware stores....
. Headquartered in Wexham
Wexham
Wexham is a settlement and civil parish in the county of Buckinghamshire. It is on the borders of the unitary authority of Slough and the non-metropolitan county of Berkshire, in southern England....
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, Madge Networks developed Token Ring, Ethernet, ATM, ISDN, and other products providing extensive networking solutions. The company's products ranged from ISA
Industry Standard Architecture
Industry Standard Architecture is a computer bus standard for IBM PC compatible computers introduced with the IBM Personal Computer to support its Intel 8088 microprocessor's 8-bit external data bus and extended to 16 bits for the IBM Personal Computer/AT's Intel 80286 processor...
/PCI
Peripheral Component Interconnect
Conventional PCI is a computer bus for attaching hardware devices in a computer...
network adapters for personal computers to work group switching hubs, routers, and ISDN backbone
Internet backbone
The Internet backbone refers to the principal data routes between large, strategically interconnected networks and core routers in the Internet...
carriers. Madge focus was to provide convergence solutions in Ethernet, Token Ring, ISDN, and the then emerging ATM networking technologies. In addition to its Wexham headquarters, Madge operated main offices in Eatontown
Eatontown, New Jersey
Eatontown is a borough in Monmouth County, New Jersey, United States. As of the 2010 census, the borough population was 12,709.What is now Eatontown was originally incorporated as Eatontown Township by an Act of the New Jersey Legislature on April 4, 1873, from portions of Ocean Township and...
, New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
and San Jose
San Jose, California
San Jose is the third-largest city in California, the tenth-largest in the U.S., and the county seat of Santa Clara County which is located at the southern end of San Francisco Bay...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, as well as offices in more than 25 countries throughout the world.
Founded in 1986, Madge Networks was a pioneer in the networking market, the emergence of which went on to define internal and external communications among corporations in every industry. Madge Networks was one of the world's leading proponents of Token Ring technology, producing ISA, PCI, and PC card adapters, switches
Network switch
A network switch or switching hub is a computer networking device that connects network segments.The term commonly refers to a multi-port network bridge that processes and routes data at the data link layer of the OSI model...
, stacks, and other devices required for its implementation of Token Ring technology.
In the late 1990s Madge Networks had taken a leading role in developing the standards and first implementations of emerging High-Speed Token Ring (HSTR) technology. This newer protocol provided for a dramatic increase in data transmission bandwidth
Bandwidth (computing)
In computer networking and computer science, bandwidth, network bandwidth, data bandwidth, or digital bandwidth is a measure of available or consumed data communication resources expressed in bits/second or multiples of it .Note that in textbooks on wireless communications, modem data transmission,...
, while remaining compatible with first-generation Token Ring technology.
The sale of their Ethernet technology (LANNET) to Lucent Technologies in July 1998 reduced Madge Networks' presence in the Ethernet market, a rival networking technology to the Token Ring standard. The company tightened focus in the ATM market, emerging video conferencing
Videoconferencing
Videoconferencing is the conduct of a videoconference by a set of telecommunication technologies which allow two or more locations to interact via two-way video and audio transmissions simultaneously...
technology and other ISDN carrier applications. Madge produced switching, routing and WAN
Wide area network
A wide area network is a telecommunication network that covers a broad area . Business and government entities utilize WANs to relay data among employees, clients, buyers, and suppliers from various geographical locations...
-LAN
Local area network
A local area network is a computer network that interconnects computers in a limited area such as a home, school, computer laboratory, or office building...
interfacing equipment to facilitate both intracorporate and intercorporate video conferencing. In the ISDN market, the trend to use digital telephone lines to increase data, voice, and video transmission bandwidth, led Madge to develop a line of Edge Switching Nodes (ESNs) and other miscellaneous carrier equipment.
Corporate history
One-time horseback riding instructor, Robert Madge entered the computer industry with Britain's Intelligent Software Ltd., designing computer-driven chess games. In 1986 Madge sought to set up his own business, opening shop on his family's BuckinghamshireBuckinghamshire
Buckinghamshire is a ceremonial and non-metropolitan home county in South East England. The county town is Aylesbury, the largest town in the ceremonial county is Milton Keynes and largest town in the non-metropolitan county is High Wycombe....
farm.
Initial years
The Ethernet field was already crowded with competitors by the mid-1980s, where most of the money had been made by 3COM3Com
3Com was a pioneering digital electronics manufacturer best known for its computer network infrastructure products. The company was co-founded in 1979 by Robert Metcalfe, Howard Charney, Bruce Borden, and Greg Shaw...
in the adapter market with their 3C509 series, then swiftly moving on to the Ethernet switching. Other companies avoided the Token Ring market in preference to IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
. Meanwhile, Madge developed a profitable business operating in IBM's shadow. Madge Networks introduced its first Token Ring products by 1987. The company quickly opened up a second headquarters in San Jose, placing the company closer to the heart of the worldwide computer industry, with advantageous results: the company's US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
customers believed it to be a large British company, while its UK customers saw it as a successful US company.
Robert Madge led his company to extending the technology, introducing new products, such as the Smart Ringnode in 1989 and the company's Fastmac technology in 1990, bringing it to the forefront of Token Ring research and development. By the early 1990s the company had outpaced even IBM's development efforts, with the larger company recommending Madge Network's products to its own customers. An early boost came from the licensing of Madge's Fastmac technology to Cisco Systems
Cisco Systems
Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Cisco has more than 70,000 employees and annual revenue of US$...
in 1990.
The company's revenues for 1990 reached $18 million. One year later, Madge's revenues nearly doubled, to $34 million. The rise of computer networking, however, had only just begun. By the following year Madge's revenues would near $100 million. At the end of 1992 the company had managed to increase its share of the Token Ring market to seven per cent – still minor compared with IBM's 76 per cent share. Until the early 1990s, Madge had been focusing on producing adapter cards, which were fitted to individual computers to connect them to the network. The company's expanding product line soon included the hubs and switching components needed to route data and allow the adapter cards to communicate.
Madge Networks rose rapidly through the 1990s, boosted by the boom in computer networking and by its own leading Token Ring technology. Madge successfully chipped away at IBM's Token Ring market lead, building Madge's share to more than 16 per cent by mid-decade. Overall, IBM's market share quickly dropped below 50 per cent – a movement aided in part by licensing agreements between Madge and networking specialist Cisco Systems.
Expansion
In the 1990s Madge continued to expand its international presence, opening new offices in South AfricaSouth Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and building its San Jose office into a second headquarters. To fuel the company's growth, Madge Networks went public in 1993, offering more than six million shares on the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
stock exchange. By 1994 Madge Networks' revenues had topped $213 million, an impressive growth, but still minor in comparison with its main market competitors, Cisco Systems, 3Com Corp., Bay Networks
Bay Networks
Bay Networks was a network hardware vendor formed through the merger of Santa Clara, California based SynOptics Communications and Billerica, Massachusetts based Wellfleet Communications on July 6, 1994...
, and Cabletron Systems
Cabletron Systems
Cabletron Systems was a major New Hampshire, USA-based provider of networking computer equipment throughout the 1980s and 1990s. Cabletron's design and sales methodologies dramatically reduced the cost of Ethernet networking equipment, covering a wide range of Layer 1 and Layer 2 networking...
. In addition, many Fortune 1000
Fortune 1000
Fortune 1000 is a reference to a list maintained by the American business magazine Fortune. The list is of the 1000 largest American companies, ranked on revenues alone...
companies sought a broader range of networking products than Madge could offer. Although Madge had performed well in the Token Ring arena, its Ethernet capability was lacking – even as Ethernet became the networking technology of choice in the mid-1990s.
In 1995 Madge Networks and Lannet Data Communications (of the RAD Group
Rad Group
The RAD Group is a collection of independent companies that develop, manufacture and market solutions for diverse segments of the networking and telecommunications industry....
of companies), an Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
-based networking specialist with a focus on LAN switches for Ethernet
Ethernet
Ethernet is a family of computer networking technologies for local area networks commercially introduced in 1980. Standardized in IEEE 802.3, Ethernet has largely replaced competing wired LAN technologies....
-based networks , agreed to merge operations in a stock swap valued at some $300 million. Lannet's operations were merged into Madge Networks, creating Madge's Ethernet division. With combined revenues of $283 million, Madge and Lannet were the smallest of the top five networking market leaders, but the combined company's product line offered a complete array of Token Ring and Ethernet products.
The merger gave Madge the ability to combine the rival networking technologies into hybrid systems and the capacity to bridge the company's products into the latest networking technology, ATM, or asynchronous transfer mode. By the mid-1990s companies were straining the limits of the existing networking technologies. As corporations joined more and more of their work force to the company network, their networks quickly ran short of bandwidth for transmitting data. The arrival of new networking applications – in particular, video conferencing and video data transfers, not only pushed bandwidth needs to the extreme, but threatened to cripple networks entirely. ATM's more efficient use of packet technology offered the prospective of dramatic bandwidth gains. Adoption of the technology would require corporations to rebuild their networking infrastructure, and Madge Networks readied not only its own ATM products, but also the hubs and switches needed to bridge existing Token Ring and Ethernet equipment to the new technology. The Lannet merger enhanced Madge's portfolio of LAN switches, needed to connect Ethernet and Token Ring stations to corporate ATM installations.
An important consideration is that Madge focussed on ATM as a Local Area Network (LAN) technology, and not as a carrier backbone Wide-Area Network (WAN) solution. In fact, Madge bet on ATM replacing not just Token-Ring and Ethernet, but even TCP/IP as THE desktop PC and laptop networking technology. This proved to be a costly mistake, when enterprise customers did not adopt ATM, opting to go to switched Ethernet instead. The company's ATM products were mostly unsuitable for the Carrier market, and so most of the company's investment in future products did not produce any returns. This wrong market/technology focus was a large factor in Madge's eventual failure.
Aiding Madge's growth was the 1995 agreement with Cisco Systems, by then global networking leader, to incorporate Madge's Token Ring switches into Cisco's products and to license other parts of Madge's Token Ring technology for future Cisco designs. At the same time, Madge gained access to Cisco-developed LAN and WAN switching software. Following on the Cisco agreement, Madge also prepared to step up its manufacturing capacity, with a new facility in Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
.
By the end of 1995, the merged Madge-Lannet contained some 1,400 employees and achieved revenues of more than $400 million, all but 15 per cent of which coming from outside its UK base. The company's entry into 1996 continued its expansion efforts, including adding to its Israeli manufacturing capacity with a new $10 million plant in Jerusalem. In February 1996, acquired Teleos Communications Inc., along with that company's ISDN and WAN access products. Based in Eatontown, Teleos, which posted revenues of $24 million in 1995, cost Madge $165 million in a pooling of interests transactions. At the same time, Madge again deepened its relationship with Cisco Systems, broadening the company's licensing agreements to include Cisco's IOS software
Cisco IOS
Cisco IOS is the software used on the vast majority of Cisco Systems routers and current Cisco network switches...
. This agreement never extended beyond the Sefton Park R&D facility and few customers were even aware of it or ever saw benefits from it; neither did their own support engineers.
At the end of 1996 Madge rolled out a new line of products to enhance its portfolio and bring the company into a new and increasingly important market: video conferencing. Madge's products placed the company in position to offer bridge solutions between the formerly independent data and video transmission technologies. Although the video conferencing market had yet to mature, Madge's move appeared to place it firmly near the lead to compete for what analysts considered a future boom market.
Decline
After years of strong expansion, the company's revenues for 1996 reached only $482 million. In 1997 the company began posting losses; analysts suggested that the company, in attempting to broaden its product line, had lost its product focus. By August 1997 the company was forced to restructure, laying off some 650 employees. During the mid-1990s, Madge had attempted to transfer the bulk of its headquarters operations to the United States, building up employee capacity around its San Jose offices. The market decline of ATM technology, however, proved difficult for the company to overcome. The choice was made to concentrate the company's activities in the similar England-Israel times zones, and the company's U.S. offices were scaled back.Madge's restructuring continued to occupy the company into 1998. In late 1997 the company spun off its Ethernet division into a separate subsidiary, once again named Lannet. After denying early reports that it was looking to divest its Ethernet business, Madge agreed to sell Lannet to Lucent Technologies for $117 million in July 1998. During this period, Madge also moved to exit the manufacturing business, selling its Ireland plant to Celestica
Celestica
Celestica Inc. is a multinational electronics manufacturing services company headquartered in Toronto, Canada. Celestica’s global manufacturing network comprises more than 40 locations in 11 countries in the Americas, Europe and Asia, supplying a wide variety of leading OEMs...
, an electronics contract manufacturer. The total cost of Madge's restructuring passed $50 million, but the company's renewed commitment to Token Ring technology appeared to have stabilized the company's balance sheet. By mid-1998 Madge had once again returned to profitability, but with only fifty or so employees.
In the late 1990s Madge's attention focused on developing the next-generation Token Ring technology, High-Speed Token Ring, offering scalable bandwidth from 16 Mbit/s to 100 Mbit/s, with future speeds reaching into the gigabit ranges. But abandoning Ethernet marked the beginning of the end for Madge Networks, a move capped by the zero return on extensive ATM investment, something they would never recover from. After 1998 they transformed yet again with wireless 802.11
IEEE 802.11
IEEE 802.11 is a set of standards for implementing wireless local area network computer communication in the 2.4, 3.6 and 5 GHz frequency bands. They are created and maintained by the IEEE LAN/MAN Standards Committee . The base version of the standard IEEE 802.11-2007 has had subsequent...
technology, without success.
Madge Networks has now been absorbed into Ringdale Limited through a management buyout after Madge Networks filed for bankruptcy in 2003.