In the 1970s, one of the main arguments in favor of using closed technologies focused on economics

Full Answer Section

• Decline: As the 1990s progressed, the computer industry shifted towards open standards, particularly the Internet Protocol (IP) suite. DEC's commitment to its proprietary architecture became a liability. While DECnet Phase II (and later) had published specifications, the market was moving rapidly towards truly open, interoperable solutions. DEC struggled to adapt, losing market share to companies that embraced these open standards.
• Financial Struggles: DEC faced significant financial losses in the 1990s, with revenues declining and the company incurring billions in losses.
• Acquisition: Ultimately, DEC was acquired by Compaq Computer Corporation in 1998 for $9.6 billion, a shadow of its former prominence.

Cisco Systems and Open Internet Standards:

• Embracing Open Standards: Founded in 1984, Cisco Systems started by building routers that could connect different computer networks using multiple protocols, including the nascent Internet Protocol (IP). Crucially, Cisco embraced and contributed to open standards like OSPF (Open Shortest Path First) and IS-IS, which were key to the growth of the internet.
• Rapid Growth: Cisco's alignment with open internet standards allowed it to ride the wave of the booming internet era. Their products facilitated the connection of diverse networks, becoming essential for the internet's expansion.
• Market Dominance: Cisco quickly became the dominant player in networking equipment. They went public in 1990 and experienced explosive growth throughout the 1990s.
• Peak Valuation: By March 2000, at the height of the dot-com bubble, Cisco became the most valuable company in the world, with a market capitalization exceeding $500 billion. This far surpassed DEC's peak revenue of around $14 billion in 1990.
• Sustained Success: While Cisco's stock experienced a significant drop after the dot-com bubble burst, the company continued to be a major player in the networking industry, evolving its product lines and remaining highly profitable.

Conclusion:

The history of Cisco Systems and Digital Equipment Corporation provides a compelling answer to the 1970s argument about closed technologies. While proprietary systems like DECNET offered initial control and revenue streams, the rapid evolution and widespread adoption of the open Internet proved that open standards, promoting interoperability and innovation, were ultimately more successful in the long run. Cisco's embrace of these open standards allowed it to become a global leader and far outstrip the success of DEC, which struggled and eventually succumbed to the shift in the technological landscape.

Sample Answer

The comparison between Cisco Systems and Digital Equipment Corporation (DEC) clearly shows that Cisco Systems was significantly more successful, largely due to its embrace of open Internet standards versus DEC's reliance on proprietary protocols like DECNET.

Here's a breakdown of their histories and why Cisco triumphed:

Digital Equipment Corporation (DEC) and DECNET:

• Proprietary Approach: DEC was a powerhouse in the 1970s and 80s, known for its minicomputers (like the PDP and VAX) and its proprietary networking suite, DECNET. While DECNET was advanced for its time and allowed for sophisticated peer-to-peer networking, it was a closed system. This meant that customers were locked into DEC hardware and software to build their networks.
• Initial Success: DECNET was initially very successful and formed the backbone of many large corporate and academic networks (like Easynet and the DECnet Internet)