Anthony J. Pennings, PhD


Cisco Systems: From Campus to the World’s Most Valuable Company, Part One: Stanford University

Posted on | May 24, 2016 | No Comments

Cisco Systems emerged from employees and students at Stanford University in the early 1980s to become the major supplier of the Internet’s enigmatic plumbing. In the process, it’s stock value increased dramatically and it became the largest company in the world by market capitalization. Cisco originally produced homemade multi-platform routers to connect campus computers through an Ethernet LAN and throughout the 1980s, they built the networking technology for the National Science Foundation’s NSFNET. As the World Wide Web took off during the 1990s, they helped countries around the world transit their telecommunications systems to Internet protocols. Cisco went public on February 4, 1990, with a valuation of $288 million. By 2002, Cisco Systems was calculated to be the world’s most valuable company, worth $579.1 billion to second place Microsoft’s $578.2 billion. Microsoft had replaced General Electric’s No. 1 ranking in 1998.

This post will present the early years of Cisco Systems development and the creation of networking technology on the Stanford University campus. The next post will discuss the commercialization and success of Cisco Systems as it helped to create the global Internet by first commercializing multi-protocol routers for local area networks.

Leonard Bosack and Sandra K. Lerner formed Cisco Systems in the early 1980s and were the driving forces of the young company. In the beginning, they each were the heads of different computer centers on campus and incidentally, (or perhaps consequently) dating. The couple met on the Stanford campus (Bosack earned a master’s in computer science in 1981 and Lerner received a master’s in statistics in 1981) while managing the computer facilities of different departments on the Stanford campus. The two faculties were located at different corners of the campus and the couple began to work together to link them, and to other organizations scattered around the campus. Drawing on work being conducted at Stanford and Silicon Valley, they developed a multi-protocol router to connect the departments. Bosack and Lerner left Stanford University in December 1984 to launch Cisco Systems.

Robert X. Cringely, author of Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can’t Get a Date interviewed both founders for his PBS video series, Nerds 2.0.1

Bosack and Lerner happened on their university positions during a very critical time in the development of computer networks. The Stanford Research Institute (SRI) was one of the four original ARPANET nodes and the campus later received technology from Xerox PARC, particularly the Alto computers and the Aloha Network technology, now known as Ethernet.[1] This technology, originally developed at the University of Hawaii to connect different islands, was improved by Robert Metcalfe and other Xerox PARC researchers and granted to the Stanford University in late 1979.[2] Ethernet technologies needed router technology to network effectively and interconnect different computers and Ethernet segments.

A DARPA-funded effort during the early 1970s at Stanford had involved research to design a new set of computer communication protocols that would allow several different packet networks to be interconnected. In June of 1973, Vinton G. Cerf started work on a novel network protocol with funding from the new IPTO director, Robert Kahn. DARPA was originally interested in supporting command-and-control applications and in creating a flexible network that was robust and could adjust to the changing situations to which military officers are accustomed. In July 1977, initial success led to a sustained effort to develop the Internet protocols known as TCP/IP (Transmission Control Protocol and Internet Protocol). DARPA and the Defense Communications Agency, which had taken over the operational management of the ARPANET, supplied sustained funding the project.[3]

The rapidly growing “Internet” was implementing the new DARPA-mandated TCP/IP protocols. Routers were needed to “route” packets of data to their intended destinations. Every packet of information has an address that helps it find its way through the physical infrastructure of the Internet. Stanford had been one of the original nodes on ARPANET, the first packet-switching network. In late 1980, Bill Yeager was assigned to work on a router as part of the SUMEX (Stanford University Medical Experimental) initiative at Stanford University to build a network router. Using a PDP-11, he first developed a router and TIP (Terminal Interface Processor). Two years later he developed a Motorola 68000-based router and TIP using experimental circuit boards that would later become the basis for the workstations sold by SUN Microsystems.[4]

Bosack and Lerner had operational rather than research or teaching jobs. Len Bosack was the Director of Computer Facilities for Stanford’s Department of Computer Science, while Sandy Lerner was Director of Computer Facilities for Stanford’s Graduate School of Business. Despite their fancy titles, they had to run wires, install the protocols, and get the computers to work. They were in charge of getting the computers and the networks to work and make them usable for the university. Bosack had worked for DEC, helping to design the memory management architecture for the PDP-10. At Stanford, many different types of computers: mainframes, minis, and the microcomputers were all in demand and used by faculty, staff, and students.

Some 5000 computers were scattered around the campus. The Alto Computer, in particular, was proliferating on campus. Thanks to Ethernet, computers were often connected locally, within a building or a cluster of buildings, but no overall network existed throughout the campus. Bosack, Lerner, and other colleagues such as Ralph Gorin and Kirk Lougheed worked on “hacking together” some of these disparate computers into the multi-million dollar broadband network being built on campus. But it was running into difficulties. They needed to develop “bridges” between local area networks and then crude routers to move packets. At the time, routers were not offered commercially. Eventually, their “guerilla network” became the de facto Stanford University Network (SUNet).


[1] Stanford networking experiments included those in the AI Lab, at SUMEX, and the Institute for Mathematical Studies in the Social Sciences (IMSSS).
[2] Ethernet Patent Number: 04063220 , Metcalfe, et al.
[3] Vinton G. Cerf was involved at Stanford University in developing TCP/IP and later became Senior Vice President, Data Services Division at MCI Telecommunications Corp. His article “Computer Networking: Global Infrastructure for the 21st Century” was published on the www and accessed in June 2003.
[4] Circuit boards for the 6800 TIP developed by Andy Bechtolsheim in the Computer Science Department at Stanford University.



AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.


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    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

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