SynOptics - the other half of Bay Networks - Ethernet over telephone wiring, which turned a coaxial bus into something a building could actually be wired for.

SynOptics built structured wiring hubs that ran Ethernet over twisted pair, a Xerox PARC-derived idea that changed how buildings were cabled. Its 1994 merger with Wellfleet produced Bay Networks, joining the wiring business to the routing one.

SynOptics was founded in Santa Clara in 1985 by Andrew K. Ludwick and Ronald V. Schmidt, and its contribution was the one that made Ethernet ordinary: running it over the unshielded twisted-pair telephone cabling that buildings already had, and selling it in modular hubs. Before that, Ethernet meant pulling coaxial cable, which is a construction project rather than a purchase.

That single decision is why Ethernet beat the alternatives on economics rather than on merit. A network you can install using the wiring already in the walls is a different product from one that needs a contractor, and the market responded accordingly: revenue went from 1.8 million dollars in 1986 to more than 388 million in 1992, peaking around 700 million in 1993.

Success at that scale carried its own problem. Hubs commoditised - the layer one and two market it dominated was exactly the part of the network where prices fall fastest - and the profit was moving up to routing, where SynOptics was not strong. On 6 July 1994 it merged with Wellfleet, which was strong there and weak where SynOptics was strong, in a 2.7 billion dollar deal that formed Bay Networks. The name split the difference between the San Francisco Bay and Massachusetts Bay, which is a fair summary of the whole arrangement.

The lesson that outlived the company is about where value sits in a stack. SynOptics won the wiring layer completely and still had to merge, because winning a layer that commoditises is a race you finish and then have to run again somewhere higher.

SynOptics ↗

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