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The Business of Internetworking: Standards, Start-Ups, and Network Effects

Published online by Cambridge University Press:  21 March 2022

Andrew L. Russell ,
James L. Pelkey  and
Loring Robbins
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Abstract

Historical accounts of the Internet's origins tend to emphasize U.S. government investment and university-based researchers. In contrast, this article introduces actors who have been overlooked: the entrepreneurs and private firms that developed standards, evaluated competing standards, educated consumers about the value of new products, and built products to sell. Start-up companies such as 3Com and Cisco Systems succeeded because they met rapidly rising demand from users, particularly those in large organizations, who were connecting computers into networks and networks into internetworks. We consider a relatively brief yet dynamic period, from the late 1960s to the late 1980s, when regulators attacked incumbent American firms, entrepreneurs flourished in new market niches, and engineers set industry standards for networking and internetworking. As a consequence, their combined efforts forged new processes and institutions for so-called open standards that, in turn, created the conditions favorable for the “network effects” that sustained the formative years of the digital economy.

Keywords

InternetStandardsTelecommunicationsRegulationDataNetworks
Type
Research Article
Information
Business History Review , Volume 96 , Issue 1: Standards and the Global Economy , Spring 2022 , pp. 109 - 144
Copyright
Copyright © The President and Fellows of Harvard College 2022

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References

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30 Phil Kaufmann of Intel recalled his perspective on Intel's desire to use standards to find large markets for their integrated circuits: “I had also been heavily involved in pushing forward on the IEEE floating point standard. It was clear that the only way to make floating-point work was to have a standard, because everybody was doing it differently, and if you wanted to sell a lot of the same chip, you had to have a standard. . . . The PCs were taking off, and local area networks of some kind were going to be pervasive.” Kaufman, oral history interview by James L. Pelkey, 17 June 1988, Campbell, CA, CHM, https://archive.computerhistory.org/resources/access/text/2013/05/102746652-05-01-acc.pdf.

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34 Charles (Charlie) Bass, oral history interview by James L. Pelkey, 16 Aug. 1994, Palo Alto, CA, CHM, https://archive.computerhistory.org/resources/access/text/2018/03/102738753-05-01-acc.pdf.

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40 IRIA is an acronym for Institut de recherche en informatique et automatique (Institute for Research in Computer Science and Control).

41 Andrew L. Russell and Valérie Schafer, “In the Shadow of ARPANET and Internet: Louis Pouzin and the Cyclades Network in the 1970s,” Technology & Culture 55 (2014): 880–907.

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63 Brian Carpenter, “Is OSI Too Late?,” Computer Networks and ISDN Systems 17 (1989): 284–86.

64 See “A Brief History of the Internet Advisory / Activities / Architecture Board,” Internet Architecture Board, accessed 3 Nov. 2021, https://www.iab.org/about/history; and Russell, Open Standards.

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68 “OSI Heading for Full Bloom,” Data Communications, Nov. 1985, 16.

69 See Yates and Murphy, “Essay on Primary Sources,” in Engineering Rules, 339.