Stac Electronics

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Stac Electronics, originally incorporated as State of the Art Consulting and later shortened to Stac, Inc, was a technology company founded in 1983. It is known primarily for its utilities for compressing data for storage.

History

The original founders included five Caltech graduate students in Computer Science (Gary Clow, Doug Whiting, John Tanner, Mike Schuster and William Dally), two engineers from industry (Scott Karns and Robert Monsour) and two board members from industry (Robert Johnson of Southern California Ventures and Hugh Ness of Scientific Atlanta). The first employee was Bruce Behymer, a Caltech undergraduate in Engineering and Applied Science.

Originally headquartered in Pasadena, California and later in Carlsbad, California, the company received venture capital funding to pursue a business plan as a fabless chip company selling application-specific standard products to the tape drive industry. The plan was to include expansion into the disk drive market, which was much larger than the tape drive market. Following the success of Cirrus in the disk drive market, this was the real basis for venture capitalists' interest in Stac.

As part of the application engineering to adapt its data compression chips for use in disk drives, the company implemented an MS-DOS driver that transparently compressed data written to a PC hard disk and decompressed the data transparently upon subsequent hard disk reads. In doing so they discovered that given the relative speed difference between the PC processor and the disk drive access times, it was possible to perform the data compression in software, obviating the need for a data compression chip in every disk drive, as they were planning to produce. Instead in 1990 the company released Stacker, a disk compression utility. The product was highly successful, due to the relatively small capacities (20 to 80 megabytes) and high prices of contemporary hard drives, at a time when larger software packages such as Microsoft's new Windows user interface were becoming popular. On average, Stacker doubled disk capacity, and usually increased disk performance by compressing the data before writing and after reading, compensating for the relative slowness of the drives. Stac sold several million units of Stacker over the product's lifetime.

They also released an hardware product called STAC Coprocessor Card, which claimed to not only improve the compression of the files, but to decrease the time needed to compress files.

Microsoft lawsuit

In 1993, Microsoft released MS-DOS 6.0, which included a disk compression program called DoubleSpace. Microsoft had previously been in discussions with Stac to license its compression technology, and had discussions with Stac engineers and examined Stac's code as part of the due diligence process. Stac, in an effort led by attorney Morgan Chu, sued [1] Microsoft for infringement of two of its data compression patents, and won; in 1994, a California jury ruled the infringement by Microsoft was not willful, but awarded Stac $120 million in compensatory damages, coming to about $5.50 per copy of MS-DOS 6.0 that had been sold. The jury also agreed with a Microsoft counterclaim that Stac had misappropriated the Microsoft trade secret of a pre-loading feature that was included in Stacker 3.1, and simultaneously awarded Microsoft $13.6 million on the counterclaim. [2]

While Microsoft prepared an appeal, Stac obtained a preliminary injunction from the court stopping the sales of all MS-DOS products that included DoubleSpace; by this time Microsoft had already started shipping an "upgrade" of MS-DOS to its OEM customers that removed DoubleSpace. By the end of 1994, Microsoft and Stac settled all pending litigation by agreeing that Microsoft would make a $39.9 million investment in Stac Electronics, and additionally pay Stac about $43 million in royalties on their patents.

After 1994

At some time prior to 1996, the company relocated its main office from Carlsbad to Carmel Valley, in San Diego, and maintained a programming group in Estonia. After settling the lawsuit with Microsoft, Stac attempted to expand its product portfolio in the utility software segment by adding additional storage and communication titles through internal development and acquisition. The company scrambled to replace the revenues lost after the market for hard drive compression software collapsed with the inclusion of DoubleSpace in MS-DOS and the rapid decline in hard disk cost per megabyte. Using the funds from its IPO (1992) and the settlement with Microsoft, Stac acquired a remote control product called "ReachOut". It acquired a server image backup product, "Replica", and internally developed a network backup product for workstations and laptops, and marketed this product first as "Replica NDM" and later as "eSupport Essentials". Much of the technology pioneered in Stac's network backup offering ultimately found its way into today's online backup solutions.[citation needed]

Meanwhile, Stac's original chip business continued to grow. In order to realize shareholder value, its chip subsidiary called Hifn, was spun off in 1998 in a primary public offering.

Stac then renamed the remaining utility software company to "Previo", and repositioned itself as a help desk and support organization tool provider. This effort was pursued while the dot-com bubble was bursting, and in 2002 management elected to take the unusual step of selling Stac's remaining technology assets (to Altiris) and returning its remaining cash to shareholders before dissolving.

See also

References

  1. ↑ Complaint for patent infringement and Demand for jury trial by Stac Electronics v Microsoft Corporation
  2. ↑ Microsoft Loses Patent Suit, Associated Press, February 23, 1994

External links


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