First independent era (1968–1973) Cipher Data Products commenced operations in
San Diego, California, in 1968. The company was initially funded by Sutter Hill Ventures of
Palo Alto, California, a venture capital firm. Initially an executive of the company, Otterson was named chairman of Cipher in the summer of 1970. Cipher began as a manufacturer of incremental recorders, or
magnetic tape drives that recorded data onto tape in one direction only. One of their fiercest independent competitors at the time was
Kennedy Company, a pioneer in the tape drive industry also based in Southern California, who were eventually acquired by
Allegheny Ludlum. Under ownership of CMC, Cipher became CMC's in-house tape drive manufacturer. As well, they continued selling drives compatible with
IBM and
DEC minicomputers to outside customers. In 1976,
Pertec Computer Corporation, then the top manufacturer of
OEM tape drives, acquired CMC. That year, revenues shot up to over $20 million. Following Pertec's divestiture of Cipher, Buzz and the two other investors owned 60 percent of Cipher's assets, while Otterson owned the remaining 40 percent. Otterson retired as CEO of Cipher some time after June 1979, naming Muller as his direct replacement. Muller maintained this post until January 1987 and left Cipher's board of directors in 1988 to helm Optotech, an
optical disc manufacturer based in
Colorado Springs, Colorado. Edward L. Marinaro, formerly
Western Digital's
chief financial officer, was named Muller's replacement in 1987. In the fall of 1981, Cipher filed their
initial public offering on the
Nasdaq. The company filed two more public offerings in that span of time and reported a profit of $15 million in fiscal year 1984.
Decline, acquisition of Irwin Magnetics, and sale to Archive (1985–1992) , now owned by
Saint-Gobain, pictured in 2021 By mid-1985, the company had plants in both San Diego,
Garden Grove, California, and
Mountain View, California. Muller described the company in 1985 as being in a transitional period between focusing on their legacy
9-track reel-to-reel tape products and newer, GCR-based
tape cartridges. In 1986, Cipher inked a couple of multi-million dollar deals with
IBM to license Cipher's
QIC technology for use in the
PC RT and the
System/36, as well as Cipher's 1880 half-inch, reel-to-reel tape drives for use in the
IBM 9370 midrange computer. Between June and July 1986, Cipher acquired Optimem Inc., a manufacturer of 12-inch,
WORM optical discs, from
Xerox Corporation for $6.3 million. As part of deal, Xerox kept a 10 percent equity position in Optimem and earned royalties on sales of Optimem products. In 1988, by which point Cipher had all but given up on the division, Optimem earned contracts with the
DoD,
NASA, and the
USPTO to supply them with WORM disc products. The payroll at the Garden Grove plant, which manufactured a significant portion of Cipher's tape drives, peaked at 772 workers before Cipher shut it down in October 1986. Cipher had opened up a factory in Singapore earlier in the year to duplicate the plant's manufacturing efforts. Consolidation of Cipher's San Diego plant soon followed, with 220 workers laid off in November 1988, the bulk of whom worked in
PCB manufacturing. In March 1989, Cipher acquired
Irwin Magnetic Systems of
Ann Arbor, Michigan, for $77 million. Like Cipher, Irwin were makers of the magnetic tape data storage systems—most popularly the AccuTrak line of proprietary tape cartridges, which saw widespread use as a
backup product for
personal computers. The acquisition was finalized in April that year. Through the acquisition of Irwin, Cipher purchased by proxy their one-time competitor Kennedy Company; Irwin acquired Kennedy earlier in 1988. Irwin continued as a division of Cipher, rechristened as Irwin Products Group and continuing to operate from Ann Arbor. The division assumed the responsibility of all of Cipher's QIC products. Between December 1989 and March 1990, rival
Archive Corporation of Costa Mesa, California, launched a
hostile takeover of Cipher Data Products, seeking to acquire the company in whole. Archive had spent the preceding year and a half fighting Cipher in court over
patent infringement suits filed by the latter since May 1988. The initial suit regarded Archive's QIC tape drives violating Cipher's patents; Cipher had earlier won a suit against another rival,
WangTek, over the same QIC patents. Archive eventually raised the terms of their acquisition sufficiently enough for Cipher to agree to the takeover in March 1990. Following the acquisition, Cipher remained a subsidiary of Archive for roughly two years, with Irwin and Optimem also kept and made separate divisions. Archive's acquisition of the Kennedy Company's patents through Irwin and Cipher proved lucrative for Archive, allowing them to leverage those patents against competitors with the legal threats of their own in the turn of the 1990s. By September 1991, the Cipher division was down to only 50 workers, down from 400 in 1990. In 1992, Archive transformed Cipher from a vendor of tape drives into a developer of
antivirus software. In November 1992, Archive consolidated all their software divisions into one, effectively ending the Cipher company. Archive themselves were acquired by
Conner Peripherals, a maker of
hard disk drives, in 1993. ==References==