Case ID: E240
Solution ID: 13188

Grand Junction Networks Case Solution

Case Solution

In October 1991, Howard Charney, a co-founding father of 3Com, and Bernard Daines, a specialist on Ethernet as well as networking, started hosting brainstorming periods for "the following large idea in networking" at Charney's home in Los Gatos, California. Participants incorporated David Boggs, the co-inventor of Ethernet, and former 3Com professionals Ron Crane, Ray Birenbaum, and Andy Verhalen. They batted around and eventually ignored numerous plans over several several weeks until Birenbaum posed the issue, "Let's say we simply made Ethernet go faster?" At that time, 10-Megabit-per-second (Megabyte per second) Ethernet share of the market for neighborhood networks (LANs) was between 80-90%. It had been an adult market. Unit volumes ongoing to develop, but prices were decreasing and overall revenue continued to be flat (see Exhibit 1). Venture and company funding was mainly centered on 100 Megabyte per second successors to Ethernet, namely Fiber Distributed Data Interface (FDDI) and Asynchronous Transfer Mode (ATM). Birenbaum noted, "Most industry commentators thought Ethernet was dead. It just went 10 Megabyte per second coupled with another perceived defects. ATM and FDDI were considered whizzy and sexy and exciting." Regardless of the ton of great interest and capital moving down another path, they made the decision to consider whether or not they could substantially boost the data rate of Ethernet. They recognized they could develop switches and mix FDDI's physical layer using the CSMA/Compact disc MAC layer to produce "Fast Ethernet." Using the market favoring standards-based solutions, Charney and the team determined the existing standards committees could play a helpful role in legitimizing their new technology, and it may be situated as just an "extension" from the existing standard. The founders--now composed of Charney, Daines, Birenbaum, and Jack Moses, an old 3Com marketing executive--formally began Grand Junction Networks to pursue this chance in Feb 1992.


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