This week, an Oregon-based company called nCube announced that it has been sold to C-COR, a publicly traded company that appears to be doing a bit of a roll-up in the area of advanced services to cable operators.
Name ring a bell? Cast your mind back to 1996, when Larry Ellison of Oracle launched the much-hyped 'network computer' movement to dethrone the PC and Bill Gates. A network computer was a stripped down client device with most of the data and calculation in the network; so that implied some form of big central processor. Mr. Ellison already had a $60m investment in a company called nCube, which had been formed to supply video servers to the $0b dollar interactive TV market of the early 90s.
Voila! nCube suddenly was to be the backend for the network computers of the world, running software that would make Windows irrelevant, and given Ellison a second big win. The market thought otherwise. The economies of scale in PCs meant that a fully functional box was less expensive than a network computer that had no standalone utility. "Thin client" turned out be a browser running over Windows. Sun boxes - and later Intel architecture servers - were fine for the backend. Network computing also grew into a $0b run rate in a couple of years. The analysts involved moved on to greater things, like 'push' and punting dot-com IPOs.
And nCube? Crippled by Ellison's diversion, it lost sales, shed staff, and was sent out to raise new capital on its own. It missed the roaring IPO market of the bubble. In 1999, it merged with a digital ad insertion company to get closer to the cable industry, which was finally going digital, and eventually generated enough interest for an exit.
The company has been so closely held that VentureSource does not have funding details, but with $60m already out of Ellison's pocket in 1996, it's doubtful there was much, if any, profit. Meanwhile, the 'central processor' of the network is now provided by clusters of commodity hardware, largely running open source software.
A lesson in scale economies, or hubris, or both? Take your pick.