Grand Junction Networks

By Bethany Coates, Andrew Rachleff
2007 | Case No. E240
In October 1991, Howard Charney, a co-founder of 3Com, and Bernard Daines, an expert on Ethernet and networking, began hosting brainstorming sessions for “the next big idea in networking” at Charney’s home in Los Gatos, California. Participants included David Boggs, the co-inventor of Ethernet, and former 3Com executives Ron Crane, Larry Birenbaum and Andy Verhalen. The team batted around and ultimately dismissed a number of proposals over several months until Birenbaum posed the question, “What if we just made Ethernet go faster?” At the time, 10-Megabit per second (Mbps) Ethernet market share for local area networks (LANs) was between 80-90 percent. It was a mature market. Unit volumes continued to grow, but prices were declining and overall revenue remained flat (see Exhibit 1). Venture and corporate funding was primarily focused on 100 Mbps successors to Ethernet, namely Fiber Distributed Data Interface (FDDI) and Asynchronous Transfer Mode (ATM). Birenbaum noted, “Most industry pundits believed Ethernet was dead. It only went 10 Mbps and had some other perceived flaws. ATM and FDDI were considered whizzy and sexy and exciting.” Despite the flood of interest and capital moving in another direction, the team decided to look into whether they could substantially increase the data rate of Ethernet. The team realized that they could develop switches and combine FDDI’s physical layer with the CSMA/CD MAC layer to create “Fast Ethernet.” With the market favoring standards-based solutions, Charney and his team determined that the existing standards committees could play a useful role in legitimizing their new technology, and it could be positioned as just an “extension” of the existing standard. The founders – now comprised of Charney, Daines, Birenbaum, and Jack Moses, a former 3Com marketing executive – officially started Grand Junction Networks to pursue this opportunity in February 1992.
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