Concurrent Computer Corporation

views updated

Concurrent Computer Corporation

4375 River Green Parkway, Suite 100
Duluth, Georgia 30096
U.S.A.
Telephone: (678) 258-4000
Toll Free: (877) 978-7363
Fax: (678) 258-4300
Web site: http://www.ccur.com

Public Company
Incorporated: 1966 as Interdata, Inc.
Employees: 425
Sales: $78.7 million (2005)
Stock Exchanges: NASDAQ
Ticker Symbol: CCUR
NAIC: 334111 Electronic Computer Manufacturing

Concurrent Computer Corporation is a global supplier of high performance computer systems. The company has been a pioneer in the field of real-time computing and parallel processing. Formed in the 1960s to serve the scientific and engineering market, Concurrent has expanded its reach to the financial and medical administration industries. Its hardware and software powers a wide variety of applications including video-on-demand, process control, data acquisition, and simulators. Leading products include the MediaHawk video-on-demand and RedHawk, a Linux-based, real-time processing system. The company is active in more than 30 countries.

Origins

Interdata, Inc. was established in 1966 by former IBM engineer Daniel Sinnott and others. A pioneer in the minicomputer industry, Interdata focused on the technical market and was turning a profit by the end of the decade.

In 1974 Perkin-Elmer Corporation, a Norwalk, Connecticut producer of scientific instruments, optics, and semiconductor manufacturing equipment, acquired Interdata Communications Inc. for $63.6 million. By this time, Interdata had annual sales of $19 million; Perkin-Elmer's were about 12 times greater. Interdata soon moved into a new headquarters in Oceanport, New Jersey.

Later in the decade, Interdata underwent a management shift and focused on the high end of the market for 32-bit minicomputers, which included applications in flight simulation, seismic analysis for the energy industry, and transaction processing for the financial services industry, noted the New York Times.

Interdata claimed the first full 32-bit computer in 1974. The company then became a proponent of the parallel processing approach to number crunching, wherein multiple tasks were performed at once, rather than one by one as in serial processing. This made real-time computing a possibility, with a plethora of applications in business and other markets.

The Interdata name was lost as the company became the basis for Perkin-Elmer's Data Systems Group. The business had a bad year in 1982 and underwent some cost-cutting before the parent company decided to spin it off.

Spun Off in 1985

Concurrent Computer Corporation (formerly Interdata) became an independent company in November 1985. Its initial public offering on the NASDAQ raised $37 million; Perkin-Elmer retained about 80 percent of equity.

Concurrent soon entered a partnership with Nippon Steel Corp. to develop a presence in Japan. However, the newly independent company was experiencing a difficult start. A nine-month product delay of a new $1 million parallel processing system compounded the company's troubles in a slow market. Sales slipped 7 percent to $244.8 million as profits were halved to $6 million in the company's first year of independence.

Perceiving a market shift towards cheaper open systems, in October 1988 Concurrent merged with Massachusetts Computer Corp. (Masscomp), a $76 million producer of UNIX-based microcomputers whose equipment had been used in the Space Shuttle program. Though smaller, Masscomp was the surviving entity, and changed its name to Concurrent. The deal cost Masscomp $240 million, two-thirds of it borrowed.

The original Concurrent had about 2,800 employees then, four times as many as Masscomp. James K. Sims, the president and CEO of the original Concurrent, also headed the merged company. He had originally joined Interdata in 1974 as a sales representative.

The newly combined company had the ambition of becoming number one in the real-time computing market. However, in spite of unique tax advantages, some cost savings from layoffs, and a leading position in the $5 billion real-time systems market, there were signs of danger from the beginning.

Early 1990s Debt Crisis

Sales were about $300 million in 1990. Concurrent went through some hard times in the early 1990s as defense spending fell. A new CEO, former Penn Central Industries Group Inc. head Denis Brown, arrived in September 1990 just as the company was going into default on its heavy debt from the Masscomp merger. There were reportedly also considerable corporate culture differences to overcome after moving Masscomp production to Concurrent's New Jersey facility, leading to a significant delay in a new UNIX product.

To put the company back on track, Brown stalled with the company's lenders and bondholders (some of which, including the Bank of New England and a couple of troubled thrifts, were facing insolvency themselves) while letting go of more than a quarter of Concurrent's 3,200-strong workforce and cutting back on research and development and real estate. (Company CFO James P. McCloskey discussed the contentious financial negotiations in some detail with American Banker in early 1992.)

Revenues were down to $222 million by fiscal 1992. Brown was looking for growth from more advanced battlefield simulators as well as a new line of administrative products for hospitals. Concurrent had sales of $179 million in 1994. It would soon grow with a major acquisition, the purchase of the rival real-time business of Harris Corporation in 1996.

This business had been formed in 1967 as Datacraft. Harris bought it in the early 1970s and renamed it the Harris Computer Systems Division. It was spun off as Harris Computer Systems Corp. in 1994. In June 1996, Concurrent acquired the spinoff's $40 million-a-year real-time computer business in a stock swap worth $30 million. (Harris Computer Systems was subsequently renamed CyberGuard Corp. after its remaining firewall product.) Concurrent had previously rebuffed an offer to itself be acquired by Harris Computer.

Concurrent introduced its MediaHawk Video Server in 1998. This soon became the basis for video-on-demand services from several leading cable operators. It could also provide streaming content for distance learning, video conferencing, and in-flight entertainment.

New Home in 1999

In 1999 Concurrent relocated its headquarters to the Atlanta area, which was also the site of its new video-on-demand (VOD) division, dubbed XStreme. The Integrated Solutions unit remained in Fort Lauderdale. (Concurrent later did away with the divisional structure a few years later.) Also in 1999, Concurrent acquired a competitor in VOD servers, Vivid Technologies of Chalfont, Pennsylvania.

The company soon claimed the leading position in the emerging broadband video-on-demand market. VOD business with cable operators as far away as Asia accounted for $12 million of the company's fiscal 2000 sales ($68 million). By fiscal 2002, VOD revenues had quadrupled, and accounted for more than half the company's total sales of $89 million.

Concurrent was also maintaining its legacy real-time computing business. It was involved with the Aegis radar system that monitored threats for the Navy. The company was beginning to outfit Navy ships entirely with UNIX-based, COTS (commercial off-the-shelf) technology.

In 2005, Concurrent was acquiring Cleveland's Everstream Holdings in a stock swap worth $15 million. Everstream, formed in 1999, produced business intelligence software. The two companies had been involved in a VOD advertising joint venture.

Company Perspectives:

Concurrent is a worldwide leader in providing digital on-demand systems to the broadband industry and real-time computer systems for industry and government. The company's two business areas, On-Demand and Real-Time, leverage the best of Concurrent's technology and mission-critical experience to deliver solutions to a diverse global customer base.

Key Dates:

1966:: Interdata, Inc. is formed.
1967:: Datacraft is formed.
1971:: Harris-Intertype acquires majority interest in Datacraft.
1974:: Perkin-Elmer Corporation acquires Interdata.
1985:: Concurrent Computer Corporation (formerly Interdata) is spun off.
1988:: Concurrent merges with Masscomp.
1994:: Harris Computer Systems (formerly Datacraft) is spun off.
1996:: Concurrent acquires Harris Real-Time Computer Systems.
1998:: Concurrent's MediaHawk Video Server is introduced.
1999:: Headquarters moves to Atlanta area as company pursues video-on-demand (VOD) market.
2002:: VOD accounts for half of total revenues.

Principal Subsidiaries

Concurrent Computer Asia Corporation; Concurrent Computer Canada, Inc.; Concurrent Computer Corporation (France) (USA); Concurrent Computer Corporation Pty. Ltd. (Australia); Concurrent Computer France S.A.; Concurrent Computer GmbH (Germany); Concurrent Computer Hispania, S.A. (Spain); Concurrent Computer Holding Corporation; Concurrent Computer Hong Kong Limited; Concurrent Computer New Zealand Limited; Concurrent Realisations Limited (U.K.); Concurrent UK Ltd.; Concurrent Federal Systems, Inc.; Concurrent Nippon Corporation (Japan); Concurrent Securities Corporation.