Banyan Systems, Inc. was founded in 1983 by Anand Jagannathan, a software engineer and mid-level manager at Data General, Larry Floryan and David C. Mahoney. The company's distinctive logo, a Banyan tree, and the logo's allegorical representation of Banyan's product suite, VINES, were conceived by Jagannathan.
- 1 Employee history
- 2 Initial Location
- 3 Operation description
- 4 Porting VINES to an Intel 80286-based version of SVR3
- 5 International growth
- 6 Banyan's marketing technique
- 7 Progression to the Corporate Network Server (CNS)
- 8 Internal conflict
- 9 Deliberate Limitations
- 10 Conflict with Compaq computer Corporation
- 11 Internal restructuring
- 12 Company growth
- 13 Initial demise
- 14 Banyan worldwide
- 15 Transition to ePresence
- 16 References
- 17 External links
Jim Allchin, although not a founder, was one of the first employees hired. Allchin was finishing his PhD when David Mahoney approached him to join Banyan. David Mahoney also hired two other key engineers from Data General: Dean Polnerow and Bob Nuber. Anand Jagannathan, Jim Allchin, Larry Floryan, Dean Polnerow and Bob Nuber were the engineering core team.
The company was headquartered on Flanders Road in Westboro, Massachusetts, along the I-495 corridor, which was well known in the 1980s as the high-tech center of the U.S. East Coast. Other companies that flourished along the I-495 corridor during that time period were Data General, Digital Equipment Corporation, Proteon, Raytheon, and Wang Laboratories.
Banyan Systems created a distributed Network Operating System (NOS) called VINES, an acronym which stood for VIrtual NEtworking System. The NOS allowed workgroups of IBM-compatible personal computers to connect to network servers via Ethernet or Token Ring networks, similar to functionality provided by other NOS products such as Novell NetWare and 3Com 3+Share/3+Open.
VINES was unique at the time, because it went a step further - it allowed the network servers to interconnect, forming large corporate networks out of interconnected work groups. VINES accomplished this through a proprietary replicated directory service called StreetTalk. VINES also had the first integrated, enterprise-wide distributed email system for microcomputers, known as VINES Mail. Like all resources in the VINES environment, it used the StreetTalk directory service. VINES Mail was more advanced and easier to use than almost any other mail package on the market. The first VINES product was released in late 1984.
Network operating system "NOS"
Banyan's NOS was built on AT&T's UNIX System V Release 3 (SVR3); however, the UNIX kernel was protected from access by anyone but Banyan personnel. Server operation and NOS management were all menu-driven (unlike the products from VINES competitors, which were command-line driven), and root access passwords were a closely guarded corporate secret. The first versions of the NOS ran on a proprietary Motorola 68000-based server built by Banyan, known as the Banyan Network Server (BNS).
Porting VINES to an Intel 80286-based version of SVR3
In 1986 the corporation recognized that the IBM PC-AT architecture had become an industry standard, and that lack of VINES support for an industry standard PC server architecture was limiting its sales capabilities, and began work on porting VINES to an Intel 80286-based version of SVR3. The new version of VINES was released in early 1987 as VINES/286; however, in what was the first of numerous marketing blunders, Banyan deliberately limited the functionality of VINES/286 relative to the version that ran on the BNS. David Mahoney and the marketing department believed that similar capabilities would cannibalize sales of the expensive and high-profit BNS hardware. There was also concern that the software only product would drive up support calls due to inconsistencies of the 286 and 386 hardware at that time.
Banyan was a privately held entity for nearly ten years after its incorporation. It continued to grow, opening sales offices all over the US, Europe and Asia. Numerous large organizations adopted VINES, including government agencies, the US Marine Corps, and high-tech companies such as Compaq Computer Corporation. Banyan developed a reputation for innovative, forward-thinking products, and tremendous engineering prowess. It also became known for incredible marketing and sales corporate arrogance and hubris.
Banyan's marketing technique
Banyan sold its products on the strength of its feature-set, and via the fervent, zealous advocacy of its customers. The organization often struggled to mount decent marketing campaigns. Some examples of Banyan's marketing during this time period were:
Slogan: Banyan VINES: Networks for those who think big.
Slogan: There's more to networking than just hooking things up (which was image related with a horse-drawn carriage with various horses hooked up going in different directions).
Internal Slogan: The server to have when you're having more than one.
Progression to the Corporate Network Server (CNS)
In 1988 Banyan announced a new server, based on the Intel 80386 microprocessor, known as the Corporate Network Server (CNS). In 1989 Compaq Computer Corporation announced the SystemPro, the first industry standard PC built specifically to be a server. Banyan followed up with a version of VINES known as VINES/386, which was a port of VINES developed for industry standard PCs such as the SystemPro and the Compaq Deskpro 386. VINES/386 was priced substantially higher than VINES/286, but again, Banyan intentionally brain-damaged the "open" version of VINES so that its proprietary hardware would appear to be more functional. It also incorporated processor detection code into VINES/286 that would prevent the lower-cost NOS from running on an 80386-based machine. If you had an 80386-based server, you had no choice but to buy the more costly VINES/386, despite the fact that Intel intended the 80386 to be fully backward compatible with the 80286.
Conflict between engineering and marketing grew with engineering wanting to move to an all software approach. Allchin, the driving force in Banyan's software engineering group, and Mahoney, CEO, conflicted over this direction and ultimately this led to Allchin leaving for Microsoft. Allchin's move to Microsoft was widely publicized.
In early 1990 Banyan released a new version of the CNS, using an Intel 80486 processor. Once again, Banyan came out with a new "feature" - the processor detection code would not allow VINES to run unless the customer bought a license key from Banyan that would permit the fully binary-compatible code to run. And once again, Banyan deliberately limited the functionality of industry standard servers relative to its proprietary hardware.
Conflict with Compaq computer Corporation
Compaq Computer Corporation was one of Banyan's largest customers, and clearly did not like the conflict of interest created by Banyan's marketing of its own server hardware. In May 1990 Compaq executives met with Banyan management. The meeting was not discussed publicly, but shortly afterward Banyan abruptly got out of the hardware business and became essentially a software-only company. Banyan quickly pulled the plug on its server line, announcing their obsolescence in June 1990.
Mahoney continued hiring a string of sales and marketing executives on a regular basis, most of whom did not last long in the roles. One notable exception was 25-year-old Greg Reyes, who served as Banyan's Vice President of Sales and Support for several years. Reyes later went on to serve as CEO of switch vendor Brocade Communications Systems.
Jim D'Arezzo and corporate business development
In July 1990 Mahoney hired a Compaq marketing executive named Jim D'Arezzo, and made him Vice President of Marketing, and eventually added Corporate Business Development to his responsibilities as well. D'Arezzo immediately set out to change Banyan's image. One of the first things he did was highly controversial; he changed the company's logo. The original logo, as envisioned by Anand Jagannathan, was a red and white ink drawing of a Banyan tree. This image had been trademarked. D'Arezzo had been instrumental in promoting and protecting the Compaq brand, and he wanted to do the same with the Banyan brand. He ordered his marketing group to get the trademark logo registered. Unfortunately it was quickly discovered, much to nearly every employee's dismay, that the much-loved Banyan tree logo could not be registered, as it was considered to be a realistic representation of a natural object. A natural object cannot be a registered trademark.
D'Arezzo hired a design group to solve the problem, and they came up with a new logo; a stylized black/white/blue logo, with a banyan tree that some said looked more like a lumpy white mushroom than a tree. Nevertheless, D'Arrezo achieved his goal of protecting the trademark, and through his efforts the new logo became more widely known than the old logo ever was.
Aggressive marketing campaign
D'Arezzo began an aggressive marketing campaign. He used his industry contacts to forge alliances, start joint development ventures, issue joint press releases, and generally use other companies to get Banyan's name out in the public eye. He created new, more sophisticated ad campaigns, and enlisted the computer industry media by providing a flood of press releases, review systems, success story articles, and the like. New software features, new pricing structures, more frequent and better-scheduled software releases, all the hallmarks of a well-managed corporate and product marketing campaign. Suddenly Banyan was on the map in a big way, and the executives began to talk about taking the company public once annual revenues hit the magic $100 Million figure.
A flood of sales talent into Banyan from other companies began, with a large contingent of middle-management personnel coming from Memorex-Telex, following behind Carl James "Jim" Shaper, who became VP of Worldwide Sales. More sales offices were opened, and the company went public. The stock took off like a rocket, selling for nearly $90 a share in the first few weeks. Promotions were rampant, and incomes were high. Shaper used the opportunity to cash out his substantial quantity of stock options, and retired from the industry for a while. Shaper then went on to a number of positions in a number of companies such as Dun and Bradstreet Software, Per-Se Technologies, Primis, and is now Chairman and CEO of Infor Global Solutions.
Flush with success, and having become a well-known (if not exactly household) name in the industry, Banyan seemed destined for greatness. Unfortunately, this was not to last. The opportunities available drew a number of young, high-powered sales people, and some observers felt that vice presidencies were handed out freely to assuage egos. Political infighting within the sales department and its multiple "regional vice presidents" allegedly led to resignations and terminations of a number of highly qualified sales and marketing people. A noted example is the closure of the company's #1 sales office, and the rumors that its management was dismissed to settle a personal dispute.
Resignation of Jim D'Arezzo
In 1994 Mahoney announced that Jim D'Arezzo had resigned. No official reason was given, but the resignation was rumored to have been requested by Banyan management because D'Arezzo's success had given him too much power and popularity. This decision was arguably to be the fatal blow to Banyan, although the effect was not recognized until much later.
Banyan went back to its old ways, employing weak, ineffectual, and short-lived sales and marketing executives. The momentum built up by D'Arezzo's marketing machine ground to a halt. New software releases and features stalled, deadlines were missed, and a critical release, VINES 5.0, was so full of bugs that it was declared a disaster by the customers. Novell, which had been playing a poor game of catch-up on enterprise networking features, did catch up, releasing NetWare Directory Services, which competed directly against StreetTalk. Microsoft released Windows NT, and began talking about Active Directory. Banyan had no answer other than the old, "We're an engineering company, buy our stuff," scheme that had met with such poor success in the past. They did come out with StreetTalk for Windows that made Windows Servers look like a Banyan Server on the network and provided a good Directory Service for Windows networks. MS told customers, however, that each connection for File and Print provided by StreetTalk for Windows required a Client Access License or CAL. This licensing wrinkle effectively doubled the cost of using StreetTalk for Windows instead of Windows Server alone.
Public calls for Mahoney's ouster began to increase in volume, even showing up in print media, but Banyan's board of directors would not (or could not) take action for several years. Mahoney was finally removed in 1997, and the company changed its name to Banyan Worldwide. Mahoney was replaced by William Ferry, who had been an executive at Banyan partner Wang Laboratories. Unfortunately it was too late - most customers had fled, switching to NetWare, or increasingly, to Microsoft Windows NT for networking. Most of the engineering, in particular, Floryan and sales talent at Banyan had already left for greener pastures as well.
Transition to ePresence
In October 1999 Banyan Worldwide became ePresence, an internet services company providing collaboration, security and identity management solutions. At the same time, it announced the obsolescence of VINES and other Banyan products. On October 24, 2003 ePresence announced that it would cease operations and its assets would be acquired by Unisys.