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Charles Holloway, John Morgridge
1998|Case No.E57

This case chronicles the origin of Astra Communications, later called Synoptics. Andy Ludwick and Ron Schmidt formed the company after incubating it in Xerox PARC. The two tried unsuccessfully to convince Xerox divisions and Ethernet vendors to commercialize the technology for allowing Ethernet to run on telephone wires. The pair decided to spin out a company from Xerox and form their own company to commercialize the technology. During 1987, this technology threatened to redefine the networking industry as it solved a problem that was keeping Ethernet from growing and was well suited to serve the personal computer revolution. All the industry heavyweights scrambled to develop a competing technology. The traditional Ethernet vendors planned to use the industry standards process to displace Astra. The standards committee called the company and asked them to join the standards process. The company needed to decide whether to share its technology with the committee in the hope that it became the standard, which might cause the market size growth to outweigh the competitive effects.

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