40 Years of Cisco, the Real Story Behind Cisco's "Innovative" Founding

[notchuckrobbins]

Happy 40th Birthday, Cisco! Time for some truth-telling from a certified network nerd (CCIE gang represent!) who's had enough vendor Kool-Aid to float a datacenter. Let's skip the fairy tale version and dive into what really happened, shall we? That romantic story about two Stanford lovebirds inventing the multiprotocol router in their living room? Yeah, about that... The real story: A team of Stanford engineers, led by Bill Yeager, had already built and deployed working routers across campus. That core software? Written by Yeager. (Spoiler: It becomes the foundation for Cisco IOS.) Enter our "founders," Len Bosack and Sandy Lerner, who saw this Stanford-developed tech and thought, "Hey, this looks profitable!" While still cashing Stanford paychecks, they made some tweaks and started selling it. When Stanford's licensing office found out... let's just say the lawyers weren't sending birthday cards. But here's the kicker: Stanford settled for a measly $19,300 plus $150k in royalties (about $463K in 2025 dollars). Talk about the deal of the century – that IP helped build a $250B+ empire. But let's give credit where it's due: Taking that questionably acquired router tech and building it into a networking juggernaut? That's no small feat. Cisco's real innovation wasn't just the tech – it was creating the most successful partner program in tech history. While others tried doing everything in-house, Cisco built an army of passionate partners who became its extended sales force, support team, and innovation engine. So here's to 40 years of:

Making networking both possible and impossibly complex Turning "that's a bug" into "that's a feature you need to pay for" Keeping monopolistic tendencies juuust under the DOJ's radar Creating enough certs to make SSL inspection look simple Dominating enterprise networking with the ruthlessness of '90s Microsoft

To my favorite tech giant, perpetually one ill-advised merger away from having the FTC kick down their door – thanks for the legacy protocols, the career paths, and enough documentation to make GPT models cry. Here's to 40 more years of dodging antitrust legislation with the grace of a perfectly load-balanced ASA firewall cluster! P.S. If I mysteriously vanish after this post, check if the head trauma matches the port configuration of a Catalyst 9400 switch. TLDR: Cisco "borrowed" Stanford's router tech, settled for pocket change ($463K in today's money), and built a $250B empire. Stanford's decision to pass on equity "as a matter of policy" belongs in the Silicon Valley Hall of Fame for "decisions that aged like milk." (Written on my 6th beer, spell-checked by Grammarly, and posted from a throwaway account because I like my partner status more than I like absolute truth-telling.)

[walterbell]

> Cisco's real innovation wasn't just the tech – it was creating the most successful partner program in tech history. While others tried doing everything in-house, Cisco built an army of passionate partners who became its extended sales force, support team, and innovation engine.

Good topic for a business school case study.

https://engineering.stanford.edu/about/visit/inside-engineer...

  In 1981, inspired by Ethernet and the fledgling Internet, alumni Judy Estrin and Eric Benhamou and two other entrepreneurs co-founded Bridge Communications to make servers and routers to move data within and between networks. In 1984, alumnus Leonard Bosack and his, wife Sandy Lerner, left computer operations staff jobs at Stanford to found an Internet router company called Cisco, which has become the dominant company in the industry. They adapted the multi-protocol router software developed some years earlier at Stanford by William Yeager.

Cisco was later successful at acquiring alumni spin-outs, if the startup proved market traction with technology invented at Cisco.

[walterbell → walterbell]

https://www.phoenixcg.com/wp-content/uploads/2018/07/Cisco-S...

> Building a partner culture within an organization as large and complex as Cisco is not a simple task. Initially Strategic Alliances had to justify solution selling with partners to gain strong mindshare with the sales force. But the tides are beginning to change. Direct sales now ask how to lead with a partner solution.

https://www.gsb.stanford.edu/faculty-research/case-studies/c...

> This business case study focuses on Cisco’s strategy of using acquisitions and alliances to gain access to world-class technologies and people... the spin-in model could be an effective way to address the challenges of raising funds, recruiting the right people and successfully executing with customers.

[marcus0x62]

There are many variations of this story out there. A few:

* Interview with Bill Yeager https://www.networkworld.com/article/847852/lan-wan-router-m... (of note: gives credit for the early hardware architecture used through the Cisco AGS+ to Andy Bechtolsheim)

* Tom Rindfleisch at Stanford, very similar to Yeager's story https://web.stanford.edu/~tcr/tcr-cisco.html

* Slightly more favorable to the Cisco founders https://historyofcomputercommunications.info/section/14.21/c...

[apartment81]

Further irony is Andy Bechtolsheim did much of the hardware of that first Stanford router Cisco's founders stole. Later he co-founded Arista who Cisco sued Arista because their CLI form and function was copied too closely from the Cisco CLI. Cisco was born in an act of IP theft including actual hardware and software code and they sued the same guy whose work they stole later in his life at Arista, not for copying actual code, but for copying the form and function of the CLI.

[ggm]

I was working in UCL-CS when the first Cisco router arrived. Prior to that it had been a fuzzball/imp and then a BBN butterfly, which were large pdp11 size boxes. This was a small wine case sized ice cream coloured rack mount.

It was the single most noisy cooling fan unit in the machineroom. It literally screamed. We could hear it over two vax, and a pyramid. It also blew air the least performant direction, for rack cooling.

Jokes aside it was a very cool device, but the jokes about engineering pre release quality were large.

This may be the unit in the science museum London.

[matt_s]

Is this an AskHN? Maybe there should be a stories category.

[marshughes]

Wow, this revelation is quite astonishing! However, putting aside the controversy over the source of the technology, isn't it worth delving into how Cisco managed to build such a huge business empire? For example, how exactly did they make their partner program so successful?