Avant-Garde Computing

Avant-Garde Computing, Inc.

Company type	Public
Industry	Software and hardware
Founded	1978
Founder	Timothy P. Ahlstrom, F. Morgan LaMarche
Defunct	1990
Fate	Acquired by Boole & Babbage
Headquarters	Mount Laurel, New Jersey , United States
Area served	United States, United Kingdom (via distribution agreements), international (federal sector via Concurrent Computer Corporation)
Key people	Timothy P. Ahlstrom (Founder, CEO), F. Morgan LaMarche (Founder), Michael L. Sanyour (President and COO, 1985-1986), Richard Abraham (President and CEO, 1989)
Products	Net/Command, Net/Adviser, Net/Alert, Net/Guard
Number of employees	215 (1985)

Avant-Garde Computing, Inc. was an American software and hardware firm publicly traded and headquartered in Mount Laurel, New Jersey. Operating from 1978 until 1990, it gained recognition primarily for its suite of network management, monitoring, and security solutions including Net/Command, Net/Adviser, Net/Alert, and Net/Guard. After enduring five consecutive years of financial losses, the company was acquired by Boole & Babbage in 1990.

Beginning

Established in 1978 by Timothy P. Ahlstrom and F. Morgan LaMarche, Avant-Garde originated from the founders' prior roles at IBM marketing and their early 1970s innovation—a device designed to alert operators as data tapes approached their end. Initially, they commercialized this invention through Ahlstrom LaMarche & Co., eventually selling both the product and its patents to Telegentics for a modest return.

Subsequently, Ahlstrom and LaMarche aimed to solve issues confronting large-scale mainframe network operators. After engaging with industry leaders, they pinpointed network management as a critical challenge and proceeded to establish Avant-Garde Computing in Cherry Hill, funding the venture partly by taking second mortgages on their homes.

Their inaugural offering, Net/Alert, debuted in October 1979 as an integrated hardware-software network management system. It included a color CRT display equipped with light-pen functionality, a logic analyzer, and graphical software designed to monitor mainframe network traffic and produce analytical reports. Development spanned two years, with Ahlstrom leading technical efforts and LaMarche focusing on marketing.

In 1980, Northern Telecom’s U.S. division acquired a 45-percent ownership stake in Avant-Garde for $500,000. The Spectron division of Northern Telecom purchased the initial $3.6 million worth of Net/Alert units in January 1981. Leveraging Spectron's backing, Avant-Garde rapidly secured major clients such as Citibank, Xerox, Cigna, MetLife, Chase Manhattan Bank, Shearson/American Express, and Air France within two years of launching Net/Alert.

Success

Avant-Garde went public in June 1983 by issuing 1.1 million shares of common stock. The capital raised from the IPO was utilized to eliminate debt and strengthen working capital reserves. Soon after the public offering, Northern Telecom divested its entire 45-percent stake in Avant-Garde for $20 million.

From late 1982 through early 1983, Avant-Garde experienced a doubling of both sales and profits. Significant transactions included a $1 million Net/Alert order from Southern Bell in November 1983 and a $3.8 million purchase from Merrill Lynch the following month—surpassing the company’s total revenue for that quarter. Other notable customers comprised Indiana Bell along with shipments made to Walt Disney World, the Library of Congress, Credit Suisse, among others. At this stage, Avant-Garde’s primary competitors were Tesdata Systems and Encom; Tesdata faced financial difficulties whereas Encom’s products were less robust compared to Net/Alert.

By February 1984, Avant-Garde employed approximately 110 staff members. Following a third quarter in 1983 marked by doubled sales and tripled revenues resulting in profitability, the company moved its headquarters to a larger facility spanning 36,000 square feet in Mount Laurel, New Jersey. Additionally, regional offices were established in Manhattan, Atlanta, Chicago, and San Francisco. In 1984, Inc. magazine ranked Avant-Garde as the United States’ 72nd fastest-growing corporation.

In May 1984, Avant-Garde introduced Net/Guard—a comprehensive mainframe network security solution combining hardware and software components. This product offered features such as detailed access logging, phone number whitelisting, user-specific access permissions, and security questions aimed at strengthening mainframe defense.

Within one month after launching Net/Guard, Avant-Garde secured Bytex Corporation as a client and reported fiscal year 1984 revenues of $15.4 million alongside net income of $1.4 million—both figures representing a twofold increase over the prior year. Between May and July 1984 alone, sales totaled $5.7 million with profits reaching $626,000—setting new company records. By the end of July, workforce numbers had grown to approximately 200 employees. The company closed out 1984 (its second fiscal quarter of 1985) with quarterly sales peaking at $4.9 million and profits at $396,000—a marginal decline attributed to delivery delays affecting a key customer.

Decline

In March 1985, during its third fiscal quarter, Avant-Garde encountered its initial drop in earnings, despite holding the 52nd position on the Inc. 500 list and maintaining a client roster that included Target, Union Bank of Switzerland, Raytheon, MasterCard International, Ford, and Southern Company Services. This downturn was attributed to the departure of key sales personnel and legal expenses stemming from a 1983 lawsuit involving its European sales branch. Operational challenges caused delays in fulfilling customer orders, resulting in a quarterly loss of $392,000—the first recorded deficit for the company.

By August 1985, the workforce reached a peak of 215 employees; however, the company reported its second straight quarterly loss. To address this, founder Ahlstrom brought in Michael L. Sanyour, formerly CEO of Subaru of America, as president and COO in October. Early in 1986, Avant-Garde formed exclusive distribution agreements with British Telecom for the UK market and non-exclusive rights with Sperry Corporation for the US. Despite these collaborations, sales momentum remained sluggish; Sperry did not generate any revenue during its initial two months. The final fiscal quarter of 1986 concluded with a $1.3 million loss and a fall to 81st place on the Inc. 500 ranking.

In March 1986, Avant-Garde introduced Net/Command and Net/Adviser—mainframe software solutions designed for network monitoring that directly competed with IBM's NetView. Although executive pay was reduced by 20% and staffing levels dropped to 160 by July, the company posted a $2.3 million loss for the quarter and an annual deficit totaling $5.2 million. Following these results, Sanyour stepped down in August, with Ahlstrom resuming leadership duties.

The fiscal year 1987 continued to reflect losses: $774,000 in Q1, $895,000 in Q2, $541,000 in Q3, and another quarterly deficit in Q4. Implementing cost reductions and trimming staff to 150 employees led to modest profits of $87,000 and $247,000 in subsequent quarters but was followed by a $408,000 loss. The year closed with an overall shortfall of $2.3 million.

In May 1988, Avant-Garde enlisted Weeden Capital Management to evaluate potential asset sales or restructuring strategies. Concurrent Computer Corporation agreed to distribute Avant-Garde’s products throughout the US federal sector as well as internationally across Canada, Australia, New Zealand, Japan, and Southeast Asia.

After incurring a $1.6 million loss in Q1 1989, Ahlstrom resigned due to health concerns; Richard Abraham assumed the roles of president and CEO. The company sustained further losses—$562,000 in Q2 and $2 million in Q3—prompting bankruptcy discussions. Following six months of negotiations, Boole & Babbage consented to acquire Avant-Garde for $4 million in cash while assuming its liabilities. In July 1989, after losses reached $4.5 million between April and July—almost twice the previous year's total—Avant-Garde filed for Chapter 11 bankruptcy protection.

In September 1989, Avant-Garde resolved a class-action lawsuit filed by shareholders with a settlement payment of $1.05 million related to alleged misstatements during its IPO. This settlement contributed to a reported loss of $2.9 million by the end of the second quarter of its final fiscal year.

The Trenton bankruptcy court granted approval for Boole & Babbage's acquisition in January 1990; the transaction was finalized in February. Avant-Garde continued operations as a subsidiary under Boole & Babbage before being rebranded as Boole & Babbage Network Systems (distinct from Network Systems Corporation).