Robert Madge

The Token Ring pioneer talks about his high-flying days, his company's collapse and how strengths can sometimes become weaknesses.

This version of the story originally appeared in Computerworld's print edition.

Does the name Robert Madge mean anything to you? It probably rings a bell, if a distant one. Madge was the founder of Madge Networks Inc., which in the late '90s was the market leader in Token Ring networking technology. The once high-flying company has since met the same fate as that of Token Ring itself: near oblivion.

Since leaving his namesake company in 2001, Madge has won acclaim in the field of RFID and tracking technology.

You left Madge Networks in 2001. Why? By 2001, the company had not succeeded in the attempts I had made to diversify. We had this very strong focus on Token Ring local networking, which was a very successful strategy so long as people bought Token Ring.

We made some attempts to diversify. One was where we purchased a company, Lannet, that put us more into Ethernet and other local-area networking. Also, we invested heavily in [Asynchronous Transfer Mode] technology. Those were completely different directions. And neither effort succeeded, for different reasons. It wasn't the right strategy for us to broaden our range when we didn't have the same scale as many other players in the arena.

Also, the trend was moving away [from the question of] which was the underlying protocol to a focus on just Internet Protocol. So customers were choosing solutions based on it just being an IP strategy.

The issue of the underlying strategy of Token Ring or Ethernet or anything else was starting to become much less relevant.

And at that point, Cisco was very clearly becoming the dominant IP supplier. We didn't have a router range, so we weren't a player in that game. And it was too late to diversify into a technology that was already established.

That explains the problems you were facing, but not why you left. Well, I oversaw the decline of the company, and I guess I was out of ideas. Token Ring was still playing pretty strong, but by the late '90s, the writing was on the wall and had been on the wall for a while. And then sales started to decline.

Two years later, in 2003, the company filed for bankruptcy protection. Any insights on that? I moved out completely, so I don't have any association with the management of the company. I had been running that company for 15 years, and I had taken it up, but unfortunately I had taken it down as well.

I needed a clean break.

The company was restructured as Madge Inc., and in 2006 was acquired by Network Technology in the U.K. and merged into that company's Ringdale arm under the Madge name. Were you concerned about their keeping that name? There are good and bad issues about naming a company after yourself. It made me that much more committed. It had my name on it, so of course I would be judged by the company. And that's what happened, even when I wasn't with the company. So obviously, if I was going to be completely detached, I'd rather it didn't carry my name. But that was not my option. The name was the property of the company.

In hindsight, was there anything you could have done differently that would have saved the company from the downslide? With hindsight, I could always speculate, but I couldn't prove anything. But I'm sure I should have found ways for the company to do better than it did.

The fundamental issue was that we had success by focusing on one area of technology, and as that area of technology turned out to have a limited lifetime with no natural progression path, it was up to me and the other members of the management team to find a future path.

We clearly spent money in areas that didn't produce a return.

If you had stuck with a Token Ring-only strategy, do you think that would have prolonged the life of the company? No. We could, perhaps, have just dispersed cash to shareholders, but I don't think as a survival strategy just sticking with Token Ring was a viable option.

What lesson did you learn from the experience with Madge Networks that might be applicable to IT professionals? I try to be objective. Although I don't necessarily believe it emotionally, if you step back and look at it, a logical move for a company whose technology is going into decline but has a customer base, and hasn't been able to find a way to evolve the company, would be to merge with or be sold to another company. In hindsight, it would have been the logical course.

Did you make any attempt to do that? No. To me, the company was very personal. I put my name on it, and I came from a culture where companies were for life. So I'm sure that emotionally, I wasn't in a good position to consider objectively whether it should be sold or not.

People's weaknesses and strengths are normally the same things. It all depends on the context whether they turn out to be strengths or weaknesses. The reason why I didn't see the writing on the wall when the best thing to do was to sell the company is probably the same reason why I built the company in the first place.

When you left in 2001, what did you do? I went and dug the garden. I didn't really start any new activity for a couple of years.

How did you make out financially? Net loss from Madge Networks. If you look at it in purely cash terms, I put quite a lot more money into Madge Networks than I ever got out. But that's partly because at some point in time, I took some money out and invested it elsewhere and made more money. And the more money I made, I basically plowed it all back into Madge, at a time when Madge was going bad.

Were you financially secure when you left in 2001? Certainly not in the way I might have hoped.

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Copyright © 2008 IDG Communications, Inc.

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