In the 1970s, one of the main arguments in favor of using closed technologies focused on economics: companies asked how they could make money if other companies could build the same products. Look online and compare the histories of Cisco Systems, one of the first companies to build products using the open Internet standards, and Digital Equipment Corporation, a company that sold proprietary DECNET protocols. Which was most successful?
Sample Solution
The comparison between Cisco Systems and Digital Equipment Corporation (DEC) perfectly illustrates the critical shift in the technology industry from proprietary to open standards, and which approach ultimately proved more successful in the long run.
Digital Equipment Corporation (DEC) and DECNET (Proprietary Protocols)
- History and Approach: Digital Equipment Corporation (DEC) was a dominant force in the computer industry from the 1960s to the 1980s, primarily known for its minicomputers (like the PDP and VAX series). To connect these machines, DEC developed its own suite of network protocols called DECnet, first released in 1975. Initially, DECnet was a highly proprietary system designed to ensure that customers bought not just DEC computers, but also DEC's networking hardware and software. The idea was to create a complete, integrated solution that locked customers into the DEC ecosystem. While later phases of DECnet did incorporate some open standards and even OSI compliance, its foundation was built on proprietary control.
- Initial Success: DECnet was initially very successful. It allowed businesses and research institutions to build robust networks among their DEC systems, and for a time, DEC was a networking powerhouse.
- Decline: However, as the 1980s progressed and the internet (based on open TCP/IP standards) began to emerge, DEC's proprietary approach became a hindrance. Customers wanted interoperability – the ability to connect different vendors' equipment. DEC's resistance to fully embracing open standards, alongside its struggles with the rise of personal computing and declining minicomputer sales, contributed to its eventual decline. DEC was acquired by Compaq in 1998, which was later acquired by Hewlett-Packard.