Brooktrout Technology
| Company type | Public (after 1992 IPO) |
|---|---|
| Industry | Telecommunications |
| Founded | 1984 in Boston, Massachusetts, United States |
| Founder | David Duehren, Eric Giler, Patrick Hynes |
| Defunct | 2005 |
| Fate | Acquired by EAS Group and merged into Cantata Technology |
| Headquarters | Boston, Massachusetts (later Needham, Massachusetts) , United States |
Area served | Worldwide |
Key people | Eric Giler (President and CEO until 2005) |
| Products | Fax server hardware and software, Voice over IP, videoconferencing technologies |
Number of employees | 290 (2005) |
Brooktrout Technology, Inc., later known simply as Brooktrout, Inc., was a telecommunications firm headquartered in Boston, Massachusetts, operating from 1984 until 2005. The company initially specialized in hardware and software solutions that transformed personal computers into fax machines, akin to the GammaLink’s GammaFax product. Over time, Brooktrout developed fax server hardware for local area network environments and subsequently broadened its portfolio to include Voice over IP and videoconferencing technologies. In 2005, Brooktrout was acquired by EAS Group and merged into Cantata Technology, which itself was purchased by Dialogic Group in 2007.
Foundation (1984–1987)
Established in 1984 within the Greater Boston region by electrical engineers David Duehren, Eric Giler, and Patrick Hynes—former Teradyne employees—Brooktrout Technology initially struggled to attract venture capital funding due to the founders’ youth and the novelty of their innovations. The company’s early operations took place out of Hynes' Boston apartment. Giler assumed the role of president, Duehren was vice president of research and development, while Hynes served as vice president of engineering. The company’s name was inspired by Hynes’ enthusiasm for trout fishing.
The initial products comprised expansion cards that enabled personal computers to send voicemail and telephone messages. In 1985, Brooktrout introduced Fax-Mail, a solution permitting fax transmissions through PCs connected via modems. Although the product initially confused consumers and was withdrawn from the market, it gained commercial traction after a successful relaunch in Japan in 1987. Later versions of Fax-Mail incorporated enhanced features and were priced between $400 and $1,000 as of 1988.
In 1987, Brooktrout obtained its first venture capital infusion—$1 million from Tie/Communications—which facilitated a move to dedicated office space in Wellesley Hills, Massachusetts. Between 1987 and 1989, the company secured an additional $1.5 million from approximately 50 investors. During this timeframe, Brooktrout became an original equipment manufacturer (OEM) supplier for AT&T’s Merlin PBX, bolstering its standing within the telecommunications hardware sector.
Growth (1987–2000)
Although Brooktrout incurred losses during its initial five years, it approached profitability by fiscal year 1989. That year marked the release of the TR112 expansion card featuring dual-channel fax transceivers capable of supporting up to sixteen concurrent fax connections per server. The TR112 also enabled direct inward dialing, providing individual fax numbers without requiring an auto attendant system, along with voice-path digitization functionality for processing DTMF signals.
Later in 1989, Brooktrout launched FlashFax, a turnkey fax server built on an IBM PC AT-compatible platform equipped with a 20 MB hard drive and proprietary fax and speech digitization cards. FlashFax could store up to 1,000 documents accessible via a programmable touch-tone interface. Its market success led to the development of a more compact model with twice the storage capacity.
From 1990 through at least 1995, Brooktrout maintained steady growth and profitability. By the close of 1990, the firm employed around 40 individuals and reported profits near $470,000; these earnings nearly doubled to $910,000 in 1991. Significant customers included Sharp Corporation and the publishers of Consumer Reports, who utilized Brooktrout’s hardware for on-demand article reprinting services. By the mid-1990s, Brooktrout ranked among the leading U.S. suppliers of fax products. In September 1992, the company went public through an IPO underwritten by Tucker Anthony and subsequently exceeded $1 million in profits.
Throughout the 1990s, Brooktrout expanded via strategic acquisitions within telecommunications. In May 1993, it acquired Dallas-based DAFCom Corporation to enter the IP-based fax machine segment with fax routers designed for corporate WANs. In 1995, Brooktrout introduced TruFax servers aimed at local area networks as an intermediary option between single-user boards and WAN products. The acquisition of Southborough software provider Technically Speaking, Inc., occurred in May 1996; additionally, entry into teleconferencing came with ISDN Primary Rate Interface cards following the purchase of Netaccess, Inc., from Xircom in July 1997.
In December 1998, Brooktrout acquired Lucent Technologies’ computer telephony division for $29.4 million, greatly enhancing its Voice over IP and Fax over IP offerings—markets it had begun targeting in the late 1990s. Reflecting this broader focus, the company dropped "Technology" from its name in May 1999 and became known simply as Brooktrout, Inc.
Decline and acquisition (2000–2005)
After experiencing consistent expansion entering the 21st century, Brooktrout's revenue fell by approximately 43% following the collapse of the dot-com bubble in late 2000. In response to this downturn, the company implemented a freeze on executive pay and bonuses, discontinued participation in trade exhibitions, and divested its software arm, Brooktrout Software, selling it to Boston-based eYak in 2001. Despite the significant drop in income, Brooktrout managed to retain all 350 employees without resorting to layoffs. By 2004, sales showed signs of improvement; notably, in May of that year, the company purchased SnowShore Networks, a developer of softphone technology located in Chelmsford, for $10 million.
By 2005, Brooktrout's global workforce had decreased to 290 employees, with 170 stationed at its newly established headquarters in Needham, Massachusetts. In August of that year, telecommunications holding company EAS Group from Hyannis, Massachusetts completed a $173 million acquisition of Brooktrout. Shortly after the deal was announced, founder and CEO Giler stepped down. Upon finalizing the acquisition later in 2005, EAS combined Brooktrout with its Excel Switching Corporation division to create Cantata Technology. Two years later, in 2007, Cantata Technology was purchased by the Dialogic Group based in Parsippany, New Jersey.