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Entrepreneurial Capitalism and Innovation:
A History of Computer Communications 1968-1988
By James Pelkey

Entrepreneurial Capitalism & Innovation:
History of Computer Communications
1968 -1988
By James Pelkey

This history is organized by three co-evolving market sectors and also standards making.
An overview of the schema is presented in the Introduction.

Ch. 1: Emergence
Ch. 3: Competition
Ch. 5: Market Order
Ch. 11: Adaptation

Ch. 2: Vision
Ch. 4: Arpanet
Ch. 6: Diffusion
Ch. 7: Emergence
Ch 8: Completion
Ch. 10: Market Order

Ch. 9: Creation

Ch. 12: Emergence



Chapter 12
Internetworking: LANs and WANs 1985-1988
Local Area Networks and Wide Area Networks


12.13    Interop (TCP/IP) Trade Show - September

The continued growth of the TCP/IP installed base, release of more products by more vendors and accolades from the technical community confused the “very pleasant” transition plans laid out by DOD and NBS to migrate to OSI. The Arpanet veteran David Retz summarized the state of affairs in November 1987:

“By the end of 1986, there were more than 100 vendor offerings of TCP/IP and its associated DARPA protocols. Moreover, major vendors, including IBM and Digital Equipment Corp. (DEC), have recently begun to offer TCP/IP as part of their product lines… While the long-term strategic direction taken by most companies is in the implementation of the OSI model and its protocols, TCP/IP appears to be solving the short-term problems of connections between networks, and has been addressing many of the issues that relate to the implementation of ISO protocols on existing networks. Given the inherently long life cycle of communications software, the TCP/IP protocols are expected to continue as a major influence for years to come.” [1]

Six months later, a report from the market research firm Infonetics confirmed that the TCP/IP market was changing rapidly, and that a “dramatic increase in the commercialization of TCP/IP has occurred,” and that increasing numbers of users were seeking solutions to integrate diverse computer equipment and networks. “Every sector of the market is planning to purchase TCP/IP products in the next year,” the report continued. “There is no indication that OSI is affecting purchase intent.” Further, customers still were confused about the functions of bridges and routers, which opened up opportunities for “vendors to enter this market.” Many users had indicated plans to transition from TCP/IP to OSI, but Infonetics concluded, “By the time OSI products are available and proven, considerable investment in TCP/IP will have been made.” Given this investment and the imminent improvements to TCP/IP products, the “compatibility, performance and reliability of OSI products must first be proved through field testing before users will be willing to commit to a substantial investment in OSI.” [2]

Skeptics also wondered about migration paths between installed TCP/IP networks and OSI-compliant protocols. The response of the TCP/IP community came in the form of an Internet RFC specifying a Simple Network Management Protocol, or SNMP. [3] In a “show of support for multi-vendor network management,” vendors such as Proteon, cisco Systems, and Wellfleet planned to introduce SNMP-based products at Interop. These products, such as Proteon’s Overview, provided a graphical interface for tools to manage the status of Internetworks and network devices—precisely the type of product that network managers longed for. They also provided simple migration paths for users who would eventually adopt OSI’s Common Management Information Protocol, once it was standardized.[4]

Interop’s “show network” featured lots of products: “every medium, every bridge box, every router you can imagine,” according to Peter de Vries of the Wollongong Group, which was responsible for the Interop network. The network provided connections between all of the vendors on display, as well as links to NSFNET, the regional BARRNET in San Francisco, and a variety of other networks. Vendors could participate in TCP/IP “bake-offs,” where they could check to see if their equipment interoperated with other vendors’ products. Self-appointed “net police” went so far as to hand out “tickets” to implementations that did not comply with the TCP/IP specifications. [5]

In many respects, Interop ’88 was far more successful than ENE. It featured useful products from 54 vendors—slightly more than ENE. The target audiences differed in important ways. Where ENE carried the burden of MAP, TOP, and GOSIP expectations to provide comprehensive solutions for large-scale manufacturing, office, and government procurement, Interop stayed focused on the immediate and narrower problems of network interconnection. In the “age of standards,” as Data Communications declared, this focus on Internetworking product compatibility, interoperability, and connectivity energized the ~5,000 attendees as well as the market for TCP/IP products. [6]

By the end of 1988, the Internetworking sector looked poised for growth. The short term seemed to belong to entrepreneurs and venture capital backed start-ups targeting customers persuaded by TCP/IP’s growth and ready to buy product. And while OSI’s proponents in government and industry still struggling to bring OSI products to the market, their strategy to garner a widespread global consensus around the future of Internetworking appeared on the path to success.

This confusion between OSI and TCP/IP contributed to the unsettled nature typical of the Emergent phase of market development. But below the steady stream of publication headlines highlighting technological confusion or the snipst meeting in January 1986 that they would need to convert TCP/IP to OSI-compatible packets. [7] To that end, the IAB and IETF had established Working Groups in 1987 to integrate Internet and OSI technologies for electronic mail, directory services, and fundamental network protocols. And vendors such as 3Com claimed to be motivated by the challenge—and market opportunities—of mapping TCP/IP systems to their OSI equivalents. [8] Optimists believed the standards wars were in the past and an harmonious era of Internetworking was just around the corner, as the NBS’s Rosenthal summarized in 1988:

“There’s a clear message to industry, to the TCP developers of the world, to begin tooling up for OSI. A very pleasant migration strategy, if you will; very supportive of US industry, just like a new horizon, another goal for industry to reach, very well specified.” [9]

By yearend 1988, domestic political institutions and organizations had done much to accelerate the emergence of the Computer Communication markets. [10] Even so, they had not settled the questions of which communication protocols – OSI or TCP/IP – or high-end Internetworking products -- gateways or routers – would dominate? For while political organizations might decide if two technological standards are equivalent, they don’t have the power to dictate which products companies had to buy. Those answers would now be left to the dynamics of market competition, and of firms acting in their own self-interest, not for some greater public good.

During these years, corporations, the economic agents of interest in this history, had also been active. Most notably, firms of the Networking sector had gained scale as competition favored the successful. Eager for more growth, as well as to protect their customer bases, these firms began entering the Internetworking market. But not before new entrants had staked claim as well, much as the Networking firms had once done to the firms of Data Communications. Would their size overwhelm the advantages timing and focus gave the start-ups? Now for our last observation of some of the decisions the firms of Computer Communications made as the needs of their customers changed, and their need to interconnect their LAN and WAN networks into enterprise networks gained importance, even necessity.


[1] David Retz, “TCP/IP: DOD suite marches into the business world,” Data Communications, November 1987, page 225.

[2] Infonetics, “TCP/IP: The User Perspective 1988,” May, 1988, p. 1.

[3] J. Case, M. Fedor, M. Schoffstall, and J. Davin, August 1988, “A Simple Network Management Protocol,” RFC 1067,

[4] Mary Petrosky, “Vendors to unveil bevy of SNMP wares,” Network World (September 19, 1988), p. 19-20.

[5] “Show Network Joins 54 Vendors, Remote Links,” InfoWorld (October 10, 1988), p. 18.

[6] “The age of standards: Promises, products, and problems,” Data Communications (September, 1988), p.13.

[7] Proceedings of the first IETF meeting.

[8] H. Kim Lew and Cyndi Jung, “Getting there from here: Mapping from TCP/IP to OSI,” Data Communications (August, 1988), p. 161-175.

[9] Pelkey interview with Rosenthal.

[10] Two examples of influential political institutions of the U.S. Government to this history are:
The Department of Defense… DARPA (ARPA) – IPTO – TCP/IP – routers
The Department of Commerce…NIST (NBS) - SNAD - OSI – MAP, etc. – gateways