Cisco - Innovation as the Engine of Growth
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Case Code: BSTR462 Case Length: 17 Pages Period: 1984-2014 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.500 Organization: Cisco Systems, Inc. Industry: Networking, IT Countries: Global Themes: Technology and Innovation Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
In 1984, Len Bosack (Bosack) and Sandra Lerner (Lerner) - a husband-wife duo - were working at Stanford University, US. While Bosack was Director of Computer Facilities for Stanford's Department of Computer Science, Lerner was Director of Computer Facilities for Stanford's Graduate School of Business. They devised the 'multi-protocol router' technology to connect separate networks in their respective departments, which had different local area network (LAN) protocols.
Bosack and Lerner then tried to sell their technology to one of the existing computer technology companies. However, they failed to find a buyer. This prompted them to set up their own company to commercialize the technology. Bosack and Lerner set up Cisco in December 1984. The name 'Cisco' was derived from 'Francisco', the company being incorporated in the San Francisco Bay area. Later, their former colleagues at Stanford, Bill Westfield, Greg Setz, and Kirk Lougheed, joined the company.
In 1986, the company introduced its first product in the market, a multi-protocol router (called the Advanced Gateway Server (AGS)) for the TCP/IP protocol suite 6 . The software in the device instantly selected the most effective route for data to flow between different networks, having diverse architectures and built using varied hardware. The device was the first of its kind in the market and went on to become a huge commercial success. Analysts opined that it brought about tremendous changes in the networking communications industry and in the early version of the Internet.
Throughout 1985, Cisco shipped routers worth about US$ 250,000 each month. In 1987, it received funding from Sequoia Capital. Initially, the company marketed its product to universities, government organizations, and companies in the aerospace industry. Later on, it began targeting large corporations that had operations in different geographical locations, which ran on different networks....
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