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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 9
Standards: 1979-1984
An Enabling Institution of Local Area Networking


9.0     Overview

This chapter returns to 1979 and reconstructs a co-evolving history to that of Networking: the emergence of computer communication standards. As observed in Chapter 8, by 1982, market forces led to an overwhelming number of networking alternatives; confusion that kept buyers from acting and the market from growing. Without buying demand, most Networking company’s fortunes would suffer and the needs of customers to interconnect their growing base of computers and peripherals would face numbing uncertainty. The events of this chapter up through 1982 were known, or could have been known, to the entrepreneurs and engineers of Networking in the story as told so far. The events of 1983-1984 were certainly anticipated by industry participants, although with varying degrees of success. The actual impact on the companies of Networking will be reconstructed in Chapter 10.

In the early 1980’s, both the huge market potential for Networking (LANs) as well as the existing state of confusion were well understood. In December 1980, a respected market research firm issued a report forecasting LAN sales to grow from essentially zero to $3.2 billion by 1990. [1] A year later, the Economist magazine summarized the state of affairs in Networking as “a technological jungle in which experts violently disagree and potential buyers stand aghast." [2] Could technological order emerge from this chaos?

An historical alternative to market competition when deciding communication technology outcomes exists. Create a standard. A source of authority, such as an institutional agency or a professional association, rules which technology is best, and then has the means to enforce or consolidate standard compliance. However, to be observed, the coming-into-being of the social structures needed to create and administrate standards can be every bit as challenging as the founding of new companies.

The stories of five important standards-making efforts will be told from their beginnings to technological order in 1984. They include a company trying to enforce its market power (XNS), or work in cooperation with other companies to enforce market power (DIX); governments trying to dictate standards (TCP/IP), or agreeing to standards (OSI); and users reaching mutual agreement (IEEE 802). By 1984, these interacting efforts settled the questions of LAN standards and an explosion in LAN sales began. The seemingly settled history of LAN protocols holds a surprising twist, however. A story told in future chapters.

[1] International Resource Development, “Local Networks and Short-Range Communications,” CW 12/15/1980.

[2] “Local Networks -- A Matter of Choice,” The Economist, Dec., 12, 1981, pp. 99-100