Cisco: The Plumbers Who Built the Internet

Discover how a Stanford couple's quest to email each other created Cisco, the networking titan that once became the world's most valuable company.[INTRO]ALEX: On March 27, 2000, for one brief, shining moment, the most valuable company on the entire planet wasn't Microsoft, Apple, or GE. It was Cisco Systems, a company that most people outside of IT departments had never even heard of.JORDAN: Wait, really? A company that makes routers and switches was worth more than the makers of Windows? How does that even happen?ALEX: It happened because Cisco wasn't just selling hardware; they were selling the literal plumbing of the internet. If you wanted to be online in the 90s, you had to pay the Cisco tax.JORDAN: So they were basically the digital landlords of the World Wide Web. I’m guessing the 'climb to the top' wasn't exactly a smooth ride though.[CHAPTER 1 - Origin]ALEX: It actually started as a love story, or at least a communication problem. In the early 80s at Stanford University, Leonard Bosack and Sandy Lerner were a married couple working in different departments—Computer Science and the Graduate School of Business.JORDAN: Let me guess: they couldn't talk to each other because the buildings used different computer languages?ALEX: Exactly. The campus was a mess of disconnected networks. To fix this, they helped develop a device called the "Blue Box," which was essentially a translator that allowed these different networks to speak to one another.JORDAN: That sounds like a genius move for a university, but how did it become a multi-billion dollar company?ALEX: Well, they founded Cisco in 1984, but there was a catch—they had used Stanford’s resources to build the tech. The university actually considered criminal charges before Cisco agreed to pay a settlement and license the technology.JORDAN: So they started as accidental outlaws. That’s probably the most interesting thing I’ve ever heard about a networking company.ALEX: It gets messier. By 1990, the year they went public, the venture capitalists had pushed both founders out. They walked away with 170 million dollars, but they lost their company just as the internet was about to explode.[CHAPTER 2 - Core Story]JORDAN: Okay, so the founders are out, the 90s hit—this is when things get crazy, right?ALEX: This is the era of John Chambers, a master salesman who became CEO in 1995. He realized that every single business on earth was about to become an internet business, and they all needed Cisco's "picks and shovels."JORDAN: So, instead of finding gold, they just sold the tools to everyone rushing to the mine.ALEX: Exactly. And Chambers had a very specific strategy: he didn't want to wait for his engineers to invent things. He just bought the competition. Cisco became an "acquisition machine," gobbling up startups and integrating their tech into the Cisco ecosystem.JORDAN: But we know how the 90s ended. The dot-com bubble didn't just leak; it popped. How did the "plumbers" handle the flood?ALEX: It was brutal. In 2001, Cisco had to write off 2.2 billion dollars in unsold inventory. They had mountains of routers that nobody wanted anymore. They went from being the most valuable company in the world to a symbol of the crash almost overnight.JORDAN: I assume they didn't just pack up and go home. How do you recover from a two-billion-dollar mistake?ALEX: They pivoted hard. They stopped focusing only on the "pipes" and started buying companies like Linksys for home tech and WebEx for online meetings. They realized the money wasn't just in the hardware anymore—it was in the software and the security.JORDAN: It’s like a plumbing company realizing they should also sell the water and the home security system too.[CHAPTER 3 - Why It Matters]ALEX: That pivot is still happening today. Under their current CEO, Chuck Robbins, Cisco is trying to leave its hardware roots behind. They recently spent 28 billion dollars to buy a company called Splunk.JORDAN: 28 billion? That’s a lot of routers. What does Splunk actually do?ALEX: It’s all about data and security. In a world of cloud computing, you don't always need a physical Cisco box in your office, but you definitely need software to watch your data and stop hackers. Cisco is trying to prove it can be a software giant instead of just a hardware relic.JORDAN: Do they actually pulled it off? Or are they just a legacy brand clinging to the past?ALEX: They’re still a titan. They recorded 57 billion dollars in revenue in 2023. But perhaps their biggest legacy is the Cisco Networking Academy. They’ve trained over 17 million students worldwide in IT skills. They basically created the workforce that runs the global internet.JORDAN: So even if you don't use their hardware, the person fixing your network probably got their certification from them. They really are everywhere.[OUTRO]JORDAN: What's the one thing to remember about Cisco?ALEX: Cisco is the company that built the physical infrastructure of the 20th-century internet and is now betting its entire future on being the software shield that protects the 21st-century one.JORDAN: That’s Wikipodia — every story, on demand. Search your next topic at wikipodia.ai