Cisco Systems

Open full sized image

A Cisco Systems building.

© Ken Wolter/Shutterstock.com

Cisco Systems, American technology company, operating worldwide, that is best known for its computer networking products. As a company that sold its products mostly to other businesses, Cisco did not become a household name, but in the second decade of the 21st century it was one of the largest corporations in the United States. Cisco was founded in 1984 and has its headquarters in San Jose, California.

The founders of Cisco Systems were Leonard Bosack and Sandra Lerner, a married couple (later divorced) who had met while students at Stanford University. After graduating in 1981, they worked at the school, directing the computer facilities of two different departments. Bosack found a way to link their respective computer networks using technology that other Stanford employees had devised in the 1970s. He and Lerner came to recognize that router technology, as it was called, could be adapted very profitably for large-scale use outside the university. In December 1984 the two founded Cisco Systems (originally written “cisco Systems”), taking the company name from the city of San Francisco. Stanford eventually licensed its proprietary software to Cisco.

In 1985 Cisco sold its first product, a network interface card for Digital Equipment Corporation’s computers. Its first big success, a router that served multiple network protocols, came the following year. In need of cash for expansion, the founders turned to a venture capital firm, Sequoia Capital. Sequoia took effective control of the company in late 1987 and installed John Morgridge as president and CEO in 1988. He managed ably but did not get along with the founders. In 1990, soon after Cisco sold its first shares of stock to the public, Lerner was ousted from the company, and Bosack subsequently quit.

Cisco Systems grew rapidly in the early 1990s. The company introduced the improved 7000 model router in 1993, and that same year it began acquiring other companies. Its first purchase, Crescendo Communications, allowed Cisco to move decisively into the field of network switching devices. In 1994 the company relocated its headquarters from Menlo Park, California, to San Jose, and the following year John T. Chambers replaced Morgridge as CEO. Chambers continued to pursue the strategy of growth by acquisition. In 1998 Cisco bought Selsius Systems, a company with expertise in Internet telephony that helped Cisco take a dominant position in VoIP technology.

In 2006 Cisco introduced TelePresence, an elaboration of videoconferencing that is intended to allow people in different locations to interact as if they were in the same place. Cisco’s networking expertise made it a leading provider of products for the Internet of Things, a concept often credited as having been named at Cisco. Chambers retired in 2015, as the company increasingly changed its emphasis from hardware to software.