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Making the Cisco Connection: The Story Behind the Real Internet Superpower
     

Making the Cisco Connection: The Story Behind the Real Internet Superpower

by David Bunnell, Adam Brate
 

Cisco Systems is known among the technology elite in Silicon Valley as one of the most successful companies to emerge from the Valley in many years. It has been dubbed computing's next Superpower.

Just as Intel and Microsoft soared to lofty heights with the rise of the personal computer, Cisco Systems is flying on the spectacular updraft of the Internet. The

Overview

Cisco Systems is known among the technology elite in Silicon Valley as one of the most successful companies to emerge from the Valley in many years. It has been dubbed computing's next Superpower.

Just as Intel and Microsoft soared to lofty heights with the rise of the personal computer, Cisco Systems is flying on the spectacular updraft of the Internet. The company, which makes specialized computers that route information through a network—acting as a sort of data traffic cop—has captured 85 percent of the market for routers used as the backbone of the biggest network of them all, the Internet. As a result, over the last five years, the value of Cisco's total outstanding stock has risen over 2,000 percent—twice the increase of Microsoft Corp. stock in the same period. Beginning as a tale of two college sweethearts at Stanford University who cofounded the company fifteen years ago, the often-told Cisco legend has all the makings of a great novel—love, money, a villain or two, corporate coups, and the sweet taste of victory. But mostly, the Cisco story is a very unusual tale of corporate success. Despite the struggle of passing through several regimes, Cisco managed to hit all the crucial spots of its business. Cisco consistently bested competitors like 3Com and IBM with insight, innovation, customer focus, and one of the biggest corporate buying sprees in history. Making the Cisco Connection deftly traces the networking giant's path to success, from its founding couple, Sandra Lerner and Leonard Bosack, to current CEO John Chambers. It highlights the company's astounding knack for buying other businesses and making them part of a huge conglomerate; its own highly developed use of technology; and its unusually tight-knit culture. Featuring the perspective of top Cisco executives and competitors, this book reveals how Cisco's technology, employees, and even its competition have blended to make Cisco possibly the most important company shaping the future of communications. Next to ruthless competitors Microsoft and Intel, Cisco shines with a kinder, gentler image, emphasizing happy customers and employees. You'll see how Cisco built its impressive culture by cultivating community, boosting morale, whittling down bureaucracy, and saving money to boot. This book also explains how Cisco is positioning itself to enter a new competitive playing field, moving beyond Internet routers in an attempt to build a single, giant, global communications system—based on the Internet—that would make the current telephone system obsolete. Cisco wants to be the company that delivers the infrastructure of this new network, which will combine computer networks with telephones, television, radio, and satellite communications. To do that, it is now challenging global giants such as Lucent Technologies and Fujitsu. Cisco plans to become the backbone of the entire communications industry, making it a corporation of incredible power as the Internet Age blossoms in the new millennium.

Provocative and instructive, Making the Cisco Connection traces the unique history of one of the most profitable and enduring technology companies in business today.

Acclaim for Making the CISCO Connection

"If you want to learn the whole scoop about the first Internet-Age company, and one of the most successful firms of any age, you've come to the right place. Bunnell's treatment of Cisco's rise—and continued rise—is fascinating and full of human detail. It's clear that Cisco is not just a firm with great technology, but also great leaders and managers."—Thomas H. Davenport, Director, Andersen Consulting Institute for Strategic Change; Professor, Boston University School of Management

"Cisco has emerged as a twenty-first century leader. David Bunnell captures the ongoing story of the Cisco executive team exploiting IT, structuring a unique organization, and creating a dynamic strategy for this breakaway dot com company."—Richard L. Nolan, William Barclay Harding Professor of Business Administration, Harvard Business School

Editorial Reviews


Just as this book was released in mid-February 2000, Cisco Systems announced it was paying $355 million in stock for Growth Networks, which employs 53 and has no revenues. What Growth Networks does have, Cisco said, is an inside track on the development of Internet switching fabrics, an emerging area of networking silicon. That deal, in a nutshell, illustrates the modus operandi Cisco has used to become an Internet industry giant. David Bunnell's book offers a lively, in-depth assessment of how the company has used its innovation-by-acquisition strategy to help earn the label "computing's next superpower." But this book is much more than a look back. As influential tech writer Karen Southwick notes in the book's foreword, Cisco "deserves to be studied as an example of how a leading-edge company embraces and leads change. If you want to understand how the successful 21st century business model might evolve, Cisco is a good place to start."

Highlights:

  • Recounts the company's creation and early years under two "polar opposites" who met and fell in love at Stanford University in the 1970s. Len Bosack was an electrical engineer "known as the philosophical one," and Sandy Lerner was an economics major who was "notoriously extravagant and aggressive."
  • Examines the rise of current CEO John Chambers, who experienced wrenching failures at IBM and Wang Computers before taking over as the principal architect of Cisco's growth strategy in the mid 1990s.
  • Probes Cisco's quirky corporate culture, which one of its human resource managers describes as having "a solid core and fuzzy edges."
  • Explains the company'sacquisition strategy, or "mad shopping spree." At the heart of this buying binge is Chambers' willingness "to pay almost any price to get something he deems critical" to the company's future.
  • Examines Chambers' strategy of "coopetition," or working together with competitors.

Advantages:

  • Bunnell works to paint a balanced portrait of Cisco. For example, here's his assessment of how the company takes advantage of the huge run-up in its stock valuation: "This gives Chambers incredible wealth to play with. He can afford to buy overvalued companies, because he is paying for them with his own overvalued stock."

Related Titles:

Bunnell's book includes an account of the central and controversial role that legendary venture capitalist Don Valentine played in Cisco's early years. For more on Valentine and his belief in "conceptualizing and executing gigantic change," see Champions of Silicon Valley: Visionary Thinking from Today's Technology Pioneers. Southwick profiles Cisco and two dozen other companies as emblems of a new way of doing business in Silicon Gold Rush: The Next Generation of High-Tech Stars Rewrite the Rules of Business. She gives book-length treatment to another Silicon Valley icon in High Noon: The Inside Story of Scott McNealy and the Rise of Sun Microsystems.

Reviewed by MH - February 22, 2000

Product Details

ISBN-13:
9780471357117
Publisher:
Wiley
Publication date:
02/29/2000
Pages:
240
Product dimensions:
6.28(w) x 9.35(h) x 0.91(d)

Read an Excerpt


Chapter 1: The Truth behind theCisco Legend (1989-1987)

The Cisco legend, as it exists in the annals of high-tech history, reflects all the qualities of effective hyperbole: It involves love, a faceless enemy, a victory, and easy money.

Incidentally, it's somewhat deceptive. A backbone of truth, however remains: Len and Sandy were a bona fide couple at Stanford, they did found Cisco, and, most truly, the networking giant did achieve record-breaking growth that enabled it to consummate a high-tech tryst with Microsoft and Intel. Like searching the Web itself, telling the actual Cisco story involves tracking a couple of key characters and tracing a few infinitely connected links.

Sandy and Len met in 1977, when Sandy was a graduate student and Len was a computer nerd who shared time on the minicomputers at the Low Overhead Time Sharing System (LOTSS) building of the Stanford computer science department. The name of the facility itself suggests one of the problems that networked personal computers would solve-users having to share very scarce, centralized systems. The vast majority of the comp sci students using the LOTSS were men, a clan that by all accounts was poignantly unconcerned with personal hygiene. Of all the geeks who hung out there, Len (once described by a reporter as looking like a "very tidy little bartender") was the one who bathed and washed his collars and cuffs. Sandy later claimed she was enchanted with Len because he actually knew how to bathe and ate with silverware. Sandy likewise practiced good hygiene, and the two discovered that they also had keen intelligence and a sense of humor in common. Other than that, the two were, personalitywise, polar opposites. Len, a University of Pennsylvania electrical-engineering major with a Stanford master's degree in computer science, was known as the philosophical and nonconfrontational one. Sandy, an economics major working for a master's in statistics and computer science (or, as she deemed it, "sadistics and confusing science"), was notoriously extravagant and aggressive. Abiding by the law that opposites attract, the couple married after a high-speed courtship and continued their parallel careers at Stanford.

By the time 1979 rolled around, the computer industry was on the cusp of upheaval. Though few dared to predict it at the time, IBM's days as king of computing with its mainframes and minicomputers were numbered. Supercheap personal computers from companies like Apple and Tandy were starting to erode the minicomputer dominance of IBM, Hewlett-Packard, and Digital Equipment Corporation (DEC). Ethernet and TCP/IP were ready for action. The formative elements of the Internet-the Advanced Research Project Agency network's Interface Message Processors (ARPAnet IMPs)-which connected computer clusters at Stanford and other universities to their respective ARPAnets, had spread like wildfire despite their limited capacities. As computer scientists, Len and Sandy were entering a new, volatile era.

After graduating, Sandy became director of the computer facilities at Stanford University Business School. Len, at the time, was director of Stanford's computer science department. Back in 1982, the Stanford campus housed a total of about 5,000 different computers. Like the Tower of Babel, the scores of computers on the sweeping campus failed to "talk" effectively to one another beyond limited ranges. Each Stanford building may have supported a self-contained network-clusters could talk to one another and e-mail could be sent to other universities via ARPAnet-but students couldn't apply research conducted on a computer in one department to their paper that resided in another. To get computers to share information, data traffic would be passed up to the ARPAnet from a local network, broadcast across the net, and then received at an ARPAnet IMP terminal in another building...

What People are Saying About This

F. Warren McFarlan
F. Warren McFarlan, Albert H. Gordon Professor of Business Administration, Harvard Business School:

This is a very readable and factual account of one of the great business success stories of the 1990s. It is equally as valuable for the entrepreneur as for the CIO. Cisco is a company who practices what it preaches and sells in its daily life.

Richard L. Nolan
Richard L. Nolan, William Barclay Harding Professor of Management of Technology, Harvard Business School:

Cisco has emerged as a 21st Century leader. David Bunnell captures the ongoing story of the Cisco executive team exploiting IT, structuring a unique organization, and creating a dynamic strategy for this breakaway dot com company.

Karen Southwick
Karen Southwick, Executive Editor, Forbes ASAP

Cisco's journey, as told in Making the Cisco Connection, is a fascinating account of a company that invented a new technology and reinvigorated a once-denigrated business strategy...This book will help catapult Cisco to the place it deserves among business success stories.

James W. Breyer
James W. Breyer, Managing Partner, Accel Partners:

David Bunnell's Making the Cisco Connection brings fresh insight to the complex workings of one of today's most important technology enterprises. The commentary is lucid, and provides powerful lessons on how to continuously innovate from both a business and technological perspective.

John Hagel
John Hagel, coauthor of New Worth and Net Gain:

Cisco is a shaper of new e-business landscape. Bunnell gives us real insight into the company and the role that it has played in transforming electronic networks, which will in turn reshape the business world.

Geoffrey James
Geoffrey James, author of Success Secrets from Silicon Valley:

David Bunnell, takes an in-depth look one of the great success stories of the Internet age. If you like high tech business books, it doesn't get much better than this.

Thomas H. Davenport
Thomas H. Davenport, Director, Andersen Consulting Institute for Strategic Change; Professor, Boston University School of Management:

If you want to learn the whole scoop about the first Internet-age company, and one of the most successful firms of any age, you've come to the right place. Bunnell's treatment of Cisco's rise -- and continued rise -- is fascinating and full of human detail. It's clear that Cisco is not just a firm with great technology, but also great leaders and managers.

Meet the Author

DAVID BUNNELL is the CEO and Editor of Upside Media Inc., publishers of Upside magazine and the business technology Web site UpsideToday.com. He was formerly chairman and editor-in-chief of PC World magazine, where he started Macworld magazine, Publish magazine, Macworld Expo, Macintosh Today, and many other media products. Bunnell was also chairman and CEO of Hypermedia Communications, where he launched NewMedia magazine, and chairman of InfoNow.

ADAM BRATE is a freelance business writer living in New York.

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