The rapid rise of TCP/IP relegated many of Gandalf's products to niche status, and the company went bankrupt in 1997; its assets were acquired by Mitel.

Gandalf referred to these systems as a "PACX", in analogy to the telephony PABX which provided similar services in the voice field.

In this fashion, large computer networks could be built in a single location using shared resources, as opposed to having to dedicate terminals to different machines.

On the host-end, modem blocks could be attached to the same PACX multiplexers, making local and remote access largely identical.

Introductions of Ethernet concentrators and ISDN-based versions of earlier host adapters did little to fix the problem, never becoming very popular in comparison to the standardized solutions from other vendors.