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

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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 7
Networking: Emergence 1979-1981
LANs and DataPBXs

7.0     Overview

In early 1979, the National Bureau of Standards (NBS) and MITRE held two workshops that then led to the Local Area Communications Network Symposium (LACN Symposium) in May. This marked a watershed for local area networking. Before the LACN Symposium, doubt and uncertainty characterized the future of local area networking. Afterwards, entrepreneurs and corporations rushed to form companies and began engineering products for market. Being first mattered, even if no one was sure what technologies were best or what products customers wanted.

Robert Metcalfe faced the biggest challenge. He first had to free Ethernet from the proprietary grasp of Xerox. With his help, DEC, Intel and Xerox announced their intention to make Ethernet a public standard. Metcalfe next had to transform his one-person consulting firm, 3Com, into a firm selling Ethernet products. Setting Metcalfe apart from coming competitors was his unswerving vision of local computer networking; a vision strongly rooted in his Xerox PARC experiences.

Robert Pliner of Ford Aerospace, a government contractor, knew enough about local area networking to send a team of his to present a paper at the LACN Symposium. The core of Pliner’s staff joined him to start Sytek, a month after Metcalfe started 3Com. Pliner and Metcalfe had even talked of doing something together. Sytek too began as a consulting firm. Then in 1981, Sytek introduced a low cost broadband local area network.

Ralph Ungermann knew Metcalfe and Pliner, mostly through the efforts of Charlie Bass. After failing to find a way to work with either, Ungermann and Bass incorporated Ungermann-Bass (UB) the same month as Sytek. UB was first to market with an unbundled Ethernet product. UB’s vision was much more pragmatic than Metcalfe’s: they wanted to build a successful company selling products customers would buy. This brought them into direct competition with data communication firms, like Micom and Codex.

Micom and Codex had listened to their customers wanting to interconnect their growing numbers of terminals and computers. They did so not with a vision of a future when users would have computers, not terminals, on their desktops, but because customers had problems interconnecting terminals to computers. Their solutions were not LANs but dataPBXs. For Micom, the natural step of selling a dataPBX accelerated their fast growing business and helped propel them into becoming a public company. With the never-ending issues attendant to growing rapidly, the gnawing problems of their dataPBX were easy to ignore. Codex seemed nonchalant and distracted. Neither could for long, however, for the LAN start-ups had momentum, access to readily available venture capital and entrepreneurial leaders bent on building big companies. The starting of something new and important was happening: it would become the second wave of computer communications, known as: Networking.