Stac Electronics
Encyclopedia
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.
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.
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 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.
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.
, 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 workstation
s and laptop
s, 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.
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.
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
Pasadena, California
Pasadena is a city in Los Angeles County, California, United States. Although famous for hosting the annual Rose Bowl football game and Tournament of Roses Parade, Pasadena is the home to many scientific and cultural institutions, including the California Institute of Technology , the Jet...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
and later in Carlsbad
Carlsbad, California
-2010:The 2010 United States Census reported that Carlsbad had a population of 105,328. The population density was 2,693.1 people per square mile . The racial makeup of Carlsbad was 87,205 White, 1,379 African American, 514 Native American, 7,460 Asian, 198 Pacific Islander, 4,189 from other...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, 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
Disk compression
A disk compression software utility increases the amount of information that can be stored on a hard disk drive of given size. Unlike a file compression utility which compresses only specified files - and which requires the user designate the files to be compressed - a disk compression utility...
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.
Microsoft lawsuit
In 1993, MicrosoftMicrosoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
released MS-DOS
MS-DOS
MS-DOS is an operating system for x86-based personal computers. It was the most commonly used member of the DOS family of operating systems, and was the main operating system for IBM PC compatible personal computers during the 1980s to the mid 1990s, until it was gradually superseded by operating...
6.0, which included a disk compression program called DoubleSpace
DoubleSpace
DriveSpace is a disk compression utility supplied with MS-DOS starting from version 6.0. The purpose of DriveSpace is to increase the amount of data the user could store on disks, by transparently compressing and decompressing data on-the-fly. It is primarily intended for use with hard drives, but...
. 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
Due diligence
"Due diligence" is a term used for a number of concepts involving either an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations...
process. Stac, in an effort led by attorney Morgan Chu
Morgan Chu
Morgan Chu , an intellectual property attorney, is one of the first Asian Americans to lead a major U.S. law firm. Chu's professional accolades recognize him as one of the nation’s most influential lawyers and most successful trial attorneys.A high school dropout, Chu went on to earn advanced...
, sued Microsoft for infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
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.
While Microsoft prepared an appeal, Stac obtained a preliminary injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
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
Original Equipment Manufacturer
An original equipment manufacturer, or OEM, manufactures products or components that are purchased by a company and retailed under that purchasing company's brand name. OEM refers to the company that originally manufactured the product. When referring to automotive parts, OEM designates a...
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 ValleyCarmel Valley, San Diego, California
Carmel Valley is a wealthy, master-planned coastal community in the north-western corner of San Diego, California, USA. The community is composed of commercial offices, residential units, hotels, and retail stores and restaurants...
, in San Diego
San Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...
, and maintained a programming group in Estonia
Estonia
Estonia , officially the Republic of Estonia , is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia , and to the east by Lake Peipsi and the Russian Federation . Across the Baltic Sea lies...
. 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
DoubleSpace
DriveSpace is a disk compression utility supplied with MS-DOS starting from version 6.0. The purpose of DriveSpace is to increase the amount of data the user could store on disks, by transparently compressing and decompressing data on-the-fly. It is primarily intended for use with hard drives, but...
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
Remote control
A remote control is a component of an electronics device, most commonly a television set, used for operating the television device wirelessly from a short line-of-sight distance.The remote control is usually contracted to remote...
product called "ReachOut". It acquired a server image backup product, "Replica", and internally developed a network backup product for workstation
Workstation
A workstation is a high-end microcomputer designed for technical or scientific applications. Intended primarily to be used by one person at a time, they are commonly connected to a local area network and run multi-user operating systems...
s and laptop
Laptop
A laptop, also called a notebook, is a personal computer for mobile use. A laptop integrates most of the typical components of a desktop computer, including a display, a keyboard, a pointing device and speakers into a single unit...
s, 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.
Meanwhile, Stac's original chip business continued to grow. In order to realize shareholder value, its chip subsidiary called Hifn
Hifn
Hifn is a semiconductor manufacturer founded in 1996 as a spin-off from Stac Electronics. The company is headquartered in Los Gatos, California, and has offices in North America, Europe and Asia. It is active in the market of security processors...
, 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
Help desk
A help desk is an information and assistance resource that troubleshoots problems with computers or similar products. Corporations often provide help desk support to their customers via a toll-free number, website and e-mail. There are also in-house help desks geared toward providing the same kind...
and support organization tool provider. This effort was pursued while the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
was bursting, and in 2002 management elected to take the unusual step of selling Stac's remaining technology assets (to Altiris
Altiris
Altiris Inc. is a subsidiary of Symantec specializing in service-oriented management software which allows organizations to manage IT assets. They also provide software for web services, security, and systems management products. Established in 1998, Altiris is headquartered in Lindon, Utah, United...
) and returning its remaining cash to shareholders before dissolving.
See also
- HifnHifnHifn is a semiconductor manufacturer founded in 1996 as a spin-off from Stac Electronics. The company is headquartered in Los Gatos, California, and has offices in North America, Europe and Asia. It is active in the market of security processors...
- Lempel-Ziv-Stac compression algorithm
- DOS Protected Mode ServicesDOS Protected Mode ServicesDOS Protected Mode Services is a set of extended DOS memory management services to allow DPMS-enabled DOS drivers to load and execute in extended memory and protected mode....
- Novell DOS 7, OpenDOS 7.01, DR-DOSDR-DOSDR-DOS is an MS-DOS-compatible operating system for IBM PC-compatible personal computers, originally developed by Gary Kildall's Digital Research and derived from Concurrent PC DOS 6.0, which was an advanced successor of CP/M-86...
7.02 and higher - PC DOS 7 and 2000