Ken Thompson and Dennis M. Ritchie rethought the software problems needed for time-sharing systems and developed a more elegant and simplistic solution. Written completely in the new “C” language, the UNIX operating system became widely available in the mid-1970s, especially after more powerful versions were created by the University of California at Berkeley, Sun Microsystems, and Xerox. Unix was a key software innovation that enabled data networking to take off, and with it went worldwide finance and the Internet.

The Unix operating system developed originally by AT&T’s Bell Labs was made available in 1969 by Thompson and Ritchie. Both had worked on the pioneering time-sharing project Multics, but when AT&T pulled out of the project, they decided to utilize their institutional freedom to pursue their ideas of an operating system. They named their new OS, “Unix” as a pun on Multics and strove over the next few years to develop an OS that was more streamlined and could run on multiple computers.

The spread of minicomputers by vendors such as DEC, Data General, Prime Computers, and Scientific Data Systems made Unix attractive. Users were frustrated with the cumbersome and propriety software developed for mainframes. Like the transistor before it, AT&T decided to disperse its computer operating system cheaply to avoid government anti-trust action. Bell Labs allowed the Unix software to be distributed to universities and other computer users for a nominal fee and by the late 1970s, its diffusion increased rapidly.[1]

In the early 1980s, SUN (Stanford University Network) Microsystems was incorporated by three Stanford alumni to provide a new type of computer system. The Sun-1 workstation was much smaller than mainframes and minicomputers but more powerful than the increasingly popular personal computers. It would have a major impact, especially on Wall Street, which was ripe for new digital technologies that could empower traders who were eager to use new calculative methods to enhance their trading profitability. Two innovations were crucial to the Stanford networking advances – The Unix operating system and Alohanet inspired Ethernet.

Through military funding, a new version of Unix was developed at the University of California at Berkeley that made its source code available, was cheap to license, and worked with many types of computers. UNIX 4.1BSD (Berkeley Software Distribution) was created when its principal investigator Bob Fabry and lead programmer in the project, Bill Joy, received additional ARPA funds in 1981 to create a new version that serviced Internet protocols. The Berkeley version was designed to maximize performance over smaller Ethernet networks like those in a financial trading floor or on a college campus. Berkeley then distributed the software to universities around the country for a small licensing fee.

The other factor was the Alto Aloha Network, named after the University of Hawaii’s wireless Alohanet system. The Alohanet was the first collision detection system for data communications and inspired companies like Cisco Systems and Sun Microsystems to develop networking solutions. During the late 1970s, Alto Computers developed at Xerox PARC were donated to Stanford University by the giant copier company. They were connected with local area networking technologies that inventor Bob Metcalfe was calling “Ethernet” after the hypothetical medium 19th-century scientists once believed essential to carry the movement of light.

Metcalfe worked on the original ARPANET in Boston and traveled to Hawaii for several months before taking a job at Xerox PARC. Inspired by the Alohanet, he began working on networking when he got to PARC. Unlike the seminal University of Hawaii project that used radio to transmit data packets between the islands, Ethernet connected computers through cables. Metcalfe worked with David Boggs and the inventors of the Alto (Thacker and Lampson) to create a computer card for the Alto computers and soon they were experimenting with a high-speed local area network (LAN). Later they used Ethernet to connect Altos throughout the Stanford campus.

The Sun concept was based on the idea that the “network was the computer”. It started with a prototype 32-bit “workstation” (as opposed to personal computer) built by Ph.D. student Andy Bechtolsheim, who originally wanted to create a personal computer that would meet the needs of faculty and students on the Stanford campus. Bechtolsheim based his computer on the UNIX operating system and envisioned them linked by Ethernet connections. Bill Joy, who was instrumental in the Berkeley revision of the UNIX code, also joined the Sun team.

The organization was brought together by Vinod Khosla, originally from India, and a Stanford MBA graduate. Khosla was impressed with Bechtolsheim’s prototype and convinced him to go into business with him. He also recruited friend and former roommate Scott McNealy who was incidentally a former high school classmate of Microsoft’s Steve Ballmer. After raising $4 million in venture capital, Khosla and McNealy incorporated Sun Microsystems in February 1982. They marketed their first workstation, the Sun I, later that summer.[2] The founders got together for this informative panel:

Sun Microsystems grew quickly, reaching sales of $9 million in 1983 and $39 million in 1984, largely because of McNealy’s manufacturing expertise. In five years they would become a Fortune 500 company. Sun positioned its products to be cheaper than minicomputers and more sophisticated and expensive than PCs. The key was networking and the strength of the UNIX OS and its ability to work with TCP/IP. A leader in what would be called the “open source movement,” Sun used high quality, off-the-shelf components, openly licensed its key technologies, and developed strong relationships with key software developers. They used equipment like Motorola’s 68000 processor, Intel’s multibus, and the new UNIX. Bill Joy’s version of Unix became the major operating system of Internet’s hosts throughout the world especially after military ordered the integration of the TCP/IP protocols in all hosts throughout the ARPANET in 1982.

The Sun Workstation quickly emerged as a potent computing platform for academic institutions as well as companies in Hollywood and engineers at NASA. But nowhere would the impact be as dramatic as it would be on Wall Street and throughout the financial markets of the world that were rapidly deregulating.

Sun’s revenues would grow to $15.7 billion by 2000 and its stock would grow to $130 before the dot.com crash. It would also become the number one supplier of open network computing technologies around the world and the top Unix vendor in the banking, global trading, RDBMS, and securities markets. Sun was also responsible for developing Java still one of the most popular programming language and distributing it for free.

Sun was sold to Oracle Corporation in 2010.

Notes

[1] Information on Unix from Campbell-Kelly, M. and Aspray, W. (1996) Computer: A History of the Information Machine. Basic Books. p 219-222.
[2] Information on Sun Microsystems from Segaller’s NERDS 2.0.1 starting on p. 229.
[3] Sales figures from an article on the BUSINESS WEEK website archives accessed on December 8, 2001. “Scott McNealy’s Rising Sun” was originally published in the same magazine by January 22, 1996. According to the article, McNealy had a lot of exposure to manufacturing. His father was a Vice-Chairman of American Motors Corp and after failing to get into both Harvard’s and Stanford’s business schools, he took a job as a foreman for Rockwell International.

© ALL RIGHTS RESERVED

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Anthony 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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Category: enterprise systems, financial technology, how IT came to rule the world
Tags: 68000 processor > ALOHANET > Alto Aloha Net > Andy Bechtolsheim > Bill Gates > Bill Joy > Bob Metcalfe > Ethernet > Multics > open source movement > Stanford University > SUN Microsystems > SUN Workstation > The network is the computer > UNIX > UNIX 4.1BSD > Vinod Khosla

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