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Published on February 1st, 2017 | by Editor

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Cisco: The Bubble that Didn’t Burst

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In the year 2000, at the height of the dot-com bubble, Cisco had a market capitalization of over 500 billion dollars. This made it the most valuable company in the world. Considering the company had only been listed on the NASDAQ ten years earlier with a market capitalization of 224 million dollars, this represented a significant achievement not just for the company, but for the rising internet based companies of the time. Although the bursting of the bubble ended the dream for many companies, Cisco still has a market capitalization of 129 billion dollars. This means it’s still one of the most valuable companies in the world.

The Stanford Connection

Cisco started in 1984 by Leonard Bosack and Sandy Lerner, two computer scientists from Stanford University. Using a multiprotocol router system, the two launched the idea of using a local area network to connect computers in different places. This is something that was unknown at that time. The software used in Cisco’s first product was an illegally acquired copy of the university’s multiple-protocol router software. This factor later led to Bosack’s resignation from the university, even though the university later licensed the software to Cisco.

Cisco’s logo depicts the two towers of San Francisco’s Golden State Bridge. The name of the company actually originated from the name of the city. That is why the company’s original name started with a lowercase ‘c’.

Cisco was one of the first companies to commercially sell routers that could support several network protocols, although they were not the original developers of this technology.

Acquisitions

Cisco has achieved significant growth largely by acquiring other U.S. based companies in the area of telecommunications. Their first acquisition was of a LAN switching company called Crescendo Communications in 1993. By March 2011, the number of companies acquired by Cisco stood at 149. In total, Cisco has spent more than 70 billion dollars in acquiring new companies.

The Brand

Cisco played a huge role in the growth of the internet and continues to do so even today. However, most of the products made by the company are focused on enterprise level switching, routing, and security. Therefore, despite the significance of the company, it isn’t as well-known as many top brands by low level consumers.

The company has made several attempts to enter the consumer market. Some of the products the company has come up with in an attempt to reach the low-end consumers include its Linksys brand of products. Until July 2015, the company was also producing set-top-boxes for consumers. However, this branch of the company’s business was sold as Cisco decided to focus on their enterprise clients.

Although it’s yet to become a household name, Cisco is one of the most important companies in the communications industry. The company hires over 70,000 employees all over the world. As the world moves towards accomplishing certain goals such as the Internet of Things (IOT), the importance of Cisco may become further realized in the coming years.

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