Cisco: what you need to know

Paul Grant traces Cisco from humble origins to internet pioneer.

Written by newmedia newmedia, Network IT Week

The foundations of Cisco were laid in Stanford University back in 1984. Two of the professors there, Leonard Bosack and Sandy Lerner, who were incidentally also husband and wife, were frustrated that they could not communicate with each other via computer from different parts of the campus.

This was because the different computer networks around the campus were all incompatible with each other. They set about devising a way of getting these incompatible networks to talk to each other, and eventually came up with the 'multiprotocol router'.

This router was basically a specialised microcomputer that sat between two or more networks and acted as a postal service. When a computer on one network wanted to send an e-mail or other data to a computer on another network, the router worked out the location of the destination device and delivered the data. They began selling their boxes to other universities, and from there went from strength to strength, laying the foundations for the internet as we know it today, on the way.

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The company was a huge success, but there were problems ahead for Bosack and Lerner. The majority of the company was funded by venture capital, in this case the capital was provided by Don Valentine. With the controlling interest in the company, in 1988 Valentine appointed a new CEO, John Morgridge, much to the displeasure of Lerner and Bosack. In particular, Lerner was the more upset by these developments as perviously she controlled the company's finances and business direction. This led to many confrontations with Morgridge.

"She'd come into my office every day and detonate," said Morgridge "One thing you could say about Sandy, she's not boring."

After a particularly spectacular fight in 1990, in which the board backed Morgridge, Lerner decided to leave the company. Out of sympathy, Bosack followed suit.

They left with a total of $170m (#106m), a lot of money then, but tiny compared to Cisco's current revenues.

Most of that money has been put into a charitable fund which finances a wide range of animal welfare and science projects. The couple have since seperated but remain on close personal terms.

CISCO: FACT FILE

Founded: 10 December 1984

HQ: 170 W. Tasman Drive, San Jose, California

First product: AGS Router (1986)

Founders: Leonard Bosack and Sandy Lerner

Number of countries products are sold in: 115

Number of sales offices: 210 in 54 countries

Employees: 16,000 worldwide (approx), 8,100 in the San Francisco Bay area

Company size: Third largest on NASDAQ, in top 40 overall.

Senior management: John Chambers, president & CEO, Larry Carter, chief financial officer, Don Listwin, executive vice-president, Judy Estrin, chief technical officer, Gary Daichendt, senior vicepresident, worldwide operations.

Revenues (last four quarters): $9.2bn

E-commerce: $20m a day in products sold through the internet.

Share Price: $78.5 (27/11/98, Source: NASDAQ)

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