History
Network General Corporation was founded in May 1986 by Harry Saal and Len Shustek to develop and market network protocol analyzers.[1] Saal, the company's primary founder, president, and CEO,[2] had previously worked at IBM as a software engineer before founding Nestar Systems, his first startup dedicated to computer networking, in October 1978 with three others, including Shustek, Jim Hinds and Nick Fortis.[3][4][5] Although successful at first, Nestar eventually floundered and was sold off in 1986. Deciding they wanted another go at a computer networking company, Saal and Shustek founded Network General in Menlo Park, California, in 1986.[3][4]
In the year of the company's founding, Network General introduced the Sniffer.[6] The inspiration behind the Sniffer was an internal test tool that had been developed within Nestar.[7] Between the company's inception and the end of 1988, the Sniffer became Network General's flagship product, and the company sold $8.9 million worth of Sniffers and associated services, earning them $1.8 million in net profit.[8]: 18 Financing was initially provided only by the founders until an investment of several million by TA Associates in late 1987.[9] The company grew from having only two employees in 1986 to 15 employees in 1988.[10] In February 1989, the company raised $17.5 million with a public stock offering of 1.90 million shares on the Nasdaq as NETG, underwritten by Alex. Brown & Sons.[8]: 17 [11] In August 1989, they sold an additional 1.27 million shares in a secondary offering,[12] and in April 1992, an additional 2.22 million shares in a third offering.[13]
By December 1989, Network General employed 68 people.[10] In the same month the company bought Legend Software, a one-person company in New Jersey that had been founded by Dan Hansen. Their product was a network monitor called LAN Patrol, which was enhanced, rebranded, and sold by Network General as WatchDog,[14] introduced in April 1990. The WatchDog sold only half as well as investors had anticipated within a quarter-year of its introduction, and Network General was forced to buy back $175,000 worth of back-stock to avoid a glut in the company's distribution networks.[15] In August 1991, the company acquired Progressive Computing, a manufacturer and supplier of equipment for wide area networks.[11] The company then grew to have 225 total employees in its workforce across 19 worldwide offices. Progressive Computing was kept around as an independent subsidiary of Network General; it released a handheld WAN protocol analyzer, the LM1 PocketScope, in early 1992.[16]
By 1995 Network General had sold $631 million worth of Sniffer-related products. It had almost 1,000 employees and was selling about 1,000 Sniffers a month.[17] Hewlett-Packard, which had introduced packet analyzers several years after the Sniffer was introduced, was Network General's largest rival, according to Saal.[18]
In December 1997 Network General merged with McAfee Associates (MCAF) to form Network Associates, in a stock swap deal valued at $1.3 billion.[19] Weeks later, Network Associates bought Pretty Good Privacy, Inc. (PGP), the encryption company founded in 1991 by Phil Zimmerman, for $35M in cash.[20] Saal and Shustek left the company shortly thereafter.[21]
In 2002, much of the PGP product line was sold to the newly formed PGP Corporation for an undisclosed amount.[22] It was subsequently acquired by Symantec in 2010.
In mid-2004, Network Associates sold off the Sniffer technology business to investors led by Silver Lake Partners and Texas Pacific Group for $275 million in cash, creating a new Network General Corporation.[23] That same year, Network Associates readopted its founder's name and became McAfee Inc. In September 2007, the new Network General was acquired by NetScout Systems for $205 million.[24] NetScout marketed Sniffer products as late as 2009, with the Sniffer Global network analysis suite of software;[25] in 2018 it divested its handheld network test tool business, including the Sniffer, to StoneCalibre.[26]
