Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. Cisco develops and sells networking hardware, telecommunications equipment and other high-technology services and products. Through its numerous acquired subsidiaries, such as OpenDNS, WebEx, Jabber and Jasper, Cisco specializes into specific tech markets, such as Internet of Things, domain security and energy management. Cisco stock was added to the Dow Jones Industrial Average on June 8, 2009, is included in the S&P 500 Index, the Russell 1000 Index, NASDAQ-100 Index and the Russell 1000 Growth Stock Index. Cisco Systems was founded in December 1984 by Leonard Bosack and Sandy Lerner, two Stanford University computer scientists, they pioneered the concept of a local area network being used to connect geographically disparate computers over a multiprotocol router system. By the time the company went public in 1990, Cisco had a market capitalization of $224 million.
By the end of the dot-com bubble in the year 2000, Cisco had a more than $500 billion market capitalization. Cisco Systems was founded in December 1984 by Sandy Lerner, a director of computer facilities for the Stanford University Graduate School of Business. Lerner partnered with her husband, Leonard Bosack, in charge of the Stanford University computer science department's computers. Cisco's initial product has roots in Stanford University's campus technology. In the early 1980's students and staff at Stanford; the Blue Box used software, written at Stanford by research engineer William Yeager. In 1985, Bosack and Stanford employee Kirk Lougheed began a project to formally network Stanford's campus, they adapted Yeager's software into what became the foundation for Cisco IOS, despite Yeager's claims that he had been denied permission to sell the Blue Box commercially. On July 11, 1986, Bosack and Lougheed were forced to resign from Stanford and the university contemplated filing criminal complaints against Cisco and its founders for the theft of its software, hardware designs, other intellectual properties.
In 1987, Stanford licensed two computer boards to Cisco. In addition to Bosack, Lougheed, Greg Satz, Richard Troiano, completed the early Cisco team; the company's first CEO was Bill Graves, who held the position from 1987 to 1988. In 1988, John Morgridge was appointed CEO; the name "Cisco" was derived from the city name San Francisco, why the company's engineers insisted on using the lower case "cisco" in its early years. The logo is intended to depict the two towers of the Golden Gate Bridge. On February 16, 1990, Cisco Systems went public with a market capitalization of $224 million, was listed on the NASDAQ stock exchange. On August 28, 1990, Lerner was fired. Upon hearing the news, her husband Bosack resigned in protest; the couple walked away from Cisco with $170 million, 70% of, committed to their own charity. Although Cisco was not the first company to develop and sell dedicated network nodes, it was one of the first to sell commercially successful routers supporting multiple network protocols.
Classical, CPU-based architecture of early Cisco devices coupled with flexibility of operating system IOS allowed for keeping up with evolving technology needs by means of frequent software upgrades. Some popular models of that time managed to stay in production for a decade unchanged; the company was quick to capture the emerging service provider environment, entering the SP market with product lines such as Cisco 7000 and Cisco 8500. Between 1992 and 1994, Cisco acquired several companies in Ethernet switching, such as Kalpana, Grand Junction and most notably, Mario Mazzola's Crescendo Communications, which together formed the Catalyst business unit. At the time, the company envisioned layer 3 routing and layer 2 switching as complementary functions of different intelligence and architecture—the former was slow and complex, the latter was fast but simple; this philosophy dominated the company's product lines throughout the 1990s. In 1995, John Morgridge was succeeded by John Chambers; the Internet Protocol became adopted in the mid-to-late 1990s.
Cisco introduced products ranging from modem access shelves to core GSR routers, making them a major player in the market. In late March 2000, at the height of the dot-com bubble, Cisco became the most valuable company in the world, with a market capitalization of more than $500 billion; as of July 2014, with a market cap of about US$129 billion, it was still one of the most valuable companies. The perceived complexity of programming routing functions in silicon led to the formation of several startups determined to find new ways to process IP and MPLS packets in hardware and blur boundaries between routing and switching. One of them, Juniper Networks, shipped their first product in 1999 and by 2000 chipped away about 30% from Cisco SP Market share. In response, Cisco developed homegrown ASICs and fast processing cards for GSR routers and Catalyst 6500 switches. In 2004, Cisco started migration to new high-end hardware CRS-1 and software architecture IOS-XR; as part of a rebranding campaign in 2006, Cisco Systems adopted the shortened name "Cisco" and created "The Human Network" advertising campaign.
These efforts were meant to make Cisco a "household" brand—a strategy designed to support the low-end Linksys products and future consumer products. On the more traditional business side, Cisco cont