FORE Systems Case Study – Written by Mark Juliano.
Used in Graduate and Undergraduate level courses at Carnegie Mellon University (CMU) and San Francisco State University (SFSU), and part of Mark Juliano’s Entrepreneurship and Business free online course.
Case Study FORE Systems (A case) Version 4 – January 2007
This case was written solely by Mark Juliano and does not represent the opinions of any employee, past or present, of FORE Systems, Marconi Communications or Ericsson. Some facts of the case have been changed or added for educational purposes. The case is intended for the solely educational.
I. Company Background
FORE Systems was incorporated in April 1990 by three professors and one PhD student from Carnegie Mellon University (CMU) in the Computer Science department. At CMU, all four were working together doing research based on federal/military grants in the area of high-speed networking. At CMU, they researched, designed and built several highspeed switches which at that time “broke the speed barrier” running in excess of 2 Gbits/ sec. These switches were in full use at CMU when FORE Systems was formed.
The technology deployed in these high-speed networking switches was of proprietary design. By 1992, all four had left CMU and were working full time at FORE. [Interesting Tidbit: The name FORE Systems derives from the first letters of the first names of the four founders. It also meant to be ahead – “to the fore!”. At the Forefront of ATM Networking was FORE’s first tagline. ]
II. The Networking Industry
In the late 1980’s and early 1990’s a new technology was being developed among large international corporations (AT&T, Bell Companies, International PTT’s, etc.) in conjunction with the CCITT (international standards body for telecommunications). This technology, called ATM (asynchronous transfer mode) was a component of a larger body of technology called B-ISDN (broadband integrated switched digital network). The goal of B-ISDN and ATM, as it was defined, was to become the foundation of a new generation of networking technologies, which would pave the way for the networks of the future.
Among the advantages of ATM technology was:
– Integrated voice, data and video
– Ultra high-speed (from 1.5 Mbits/sec to 192+ Gbits/sec)
– Scalable speeds
– Ease of network management
Ability to handle a variety of networking protocols (i.e. ethernet, token ring, FDDI, frame relay, routing protocols, etc.) – Seamless end-to-end network connectivity – International standards-based These were indeed far-reaching goals, and ATM became the key underpinning technology of B-ISDN. It should be noted, that the predecessor of B-ISDN, called ISDN, had been experiencing great difficulty in its deployment.
While it was taking hold in some countries which had relatively low-speed networks, in the United States it was seen as a failure. Put simply, ISDN was too slow, too late, and too expensive. LANs and LAN Internetworking At the same time as the development of ATM and B-ISDN, the revolution of Local Area Networks (LANs) was well underway.
Developed in the early to mid 1980’s, by the early 1990’s, LANs were proliferating throughout the U.S. and overseas. Ethernet (10 Mbps technology) and Token Ring (at 16 Mbps technology developed by IBM) were fighting it out for the top spot, with Ethernet emerging as the clear leader by 1990. As LANs developed, the issue turned to LAN internetworking – namely connecting individual LANs using devices such as bridges, routers and gateways. These internetworks could be deployed in a single building, corporate campus, metropolitan area, or across the nation or the world. However, due to the speed limitation of Ethernet (10 Mbits/sec), new technologies loomed on the horizon such as FDDI (100 Mbits/sec) and a potentially new technology called fast Ethernet (100 Mbits/sec).
At the time of FORE Systems founding, only FDDI was a working, deployable technology. Fast Ethernet was still in the laboratories and there was question as to whether it could ever achieve the 100 Mbits/sec speed while preserving the Ethernet framing and overall protocol structure. In addition, other non-Ethernet protocol high-speed technologies had been proposed (such as 100VGanyLAN by Hewlett Packard) Within internetworking, the name of the game was again speed and performance, as well as the devices ability to route specific protocols.
Specifically a major issue was how many packets (frames) per second a bridge, router or gateway could correctly handle. As the LANs became more congested, so too did the internetwork. Companies such as Wellfleet, Cisco, Proteon, and Digital Equipment (DEC) hastened to add faster and faster processors (CPUs) to their devices to keep pace with growing network demand. Furthermore, these devices primarily relied on a technology called Frame Relay for their connection to the wide area (long distance) network (WAN). Frame Relay technology was limited to 1.544 Mbits/sec in the U.S. and 2 Mbits/sec internationally creating a serious WAN bottleneck for large, high-speed, long distance internetworks.
Clearly, some breakthroughs were needed in the area of 1) LANs, 2) LAN internetworking, and 3) WANs to keep pace with the ever-growing demand on networks. At this time, ATM emerged as a prime contender for all three applications, and was even FORE Systems Case Study Mark Juliano Page 2 talked about as the panacea for what plagued the networks of the early 1990’s. During 1992 the first revenue forecasts were developed by consulting firms such as Yankee Group, Gartner Group, IDC, etc. These forecasts predicted that ATM would be a $4-10 Billion industry within 5 years.!