The relationship serves as a cautionary tale.
Cisco Systems, the American multinational that designs, manufactures and sells networking equipment, was launched by Stanford graduates Leonard Bosack and now wife Sandy Lerner established in December 1984. The company was originally based on Stanford’s campus – until they were asked to leave.
Cisco’s pioneering product, a multi-protocol technology, was developed by Bosack and Lerner to allow communication between their respective departments on campus. Stanford requested the company pay a fee for having used its resources and premises and, in 1986, the two settled on less than $150,000.
Former Cisco CEO, John Morgridge, took the opportunity at Cisco Live last month to explain that the university would have been better off taking stock in the company. He grew the company from 34 employees in 1989 to 2,400 in 1995. In 2013, Cisco’s revenue topped $48.6bn with a net income of more than $9.98bn.
Many of Silicon Valley’s leading technology companies have their roots closely linked to Stanford, including Google and Hewlett Packard. Although there have never been any problems between Stanford and Cisco after the settlement, Stanford lost an opportunity to bring in a lot of money over the past couple of decades. With Stanford being such a great contributor to the IT sector, one can only hope that they will not repeat their mistake.
