Ethernet Networking

Ethernet is a computer networking protocol. Before Ethernet, computers were connected using a hodgepodge of various systems, a digital Tower of Babel.


Bob Metcalfe invented Ethernet at Xerox PARC. However, Xerox failed to commercialize the technology. Metcalfe left and worked on his own Digital (see minicomputers) and Intel to set Ethernet as a networking standard. Eventually, the industry adopted Ethernet as a standard labeling it IEEE 802.3.

Ethernet’s advantage is that it is radically simpler and cheaper than prior “better” methods.

Think of information flowing from one computer to another. Information is broken down into small pieces, called packets, then sent on their way. The receiving computer reassembles the packets. For example, this page is a series of packets. A server broke it into packets then your computer or phone reassembled it.

Other networking methods went to great lengths to avoid the packets from colliding. Ethernet simply allows them to occasionally collide, which means they disappear, then resends when that happens.

Think of Ethernet as an enormous highway with little traffic control where cars, carrying information, sometimes collide and destroy one another. When this happens, the sender simply generates and resents a new packet. This was vastly less complicated and less expensive than trying to avoid collisions.

Ethernet Thrives After Xerox PARC

After Xerox PARC, in 1979, Metcalfe founded 3Com and formulated Metcalfe’s law, that computer networks become exponentially more useful with more nodes.

Metcalfe lost 3Com in a boardroom fight though the company left him extremely wealthy. Xerox made little or no money from Ethernet, but Metcalfe’s 3Com grew into a Fortune 500 company making him extremely wealthy.

Today, Wifi remains a wireless version of Ethernet.

Personal Computer, Xerox Alto (the “interim Dynabook”)

Dynabook was at the heart of Xerox PARC. Eventually realized as the Xerox Alto, it is essentially the first personal computer. Easy-to-use with a graphical interface, what-you-see-is-what-you-get (WYSISYG) programs, icons, the mouse, networking. Everything we take for granted today started as the Dynabook/Alto.


The Dynabook dates to Kay’s doctoral thesis and the first interview with Xerox. It is the underlying principle behind much of the work at Xerox PARC.

Kay envisioned a computer for just one person. His theoretical computer notebook would cost less than $500 “so that we could give it away in schools.” Compactness was important so “a kid could take it wherever he goes to hide.” Programming should be easy: “Simple things should be simple, complex things should be possible.” “A combination of this ‘carry anywhere’ device and a global information utility such as the ARPA network or two-way cable TV will bring the libraries and schools (not to mention stores and billboards) to the home.”

Xerox refused to fund the Dynabook, it was an inappropriate project since Xerox PARC was for offices, not children. Subsequently, Kay ignored them, sneaked away and, with the help of Thacker and Lampson, built what became the Alto. Kay referred to the Alto as “the interim Dynabook.”

Xerox: Computers Won’t Make Money

When finished, in 1973, Kay released it with a graphic of Cookie Monster, from Sesame Street, holding the letter C. Xerox built about 2,000 Alto’s for company use but never fully commercialized the computer. A Xerox executive told Taylor “the computer will never be as important to society as the copier.” The Dynabook, the personal computer, did not add shareholder value.

As of mid-2019, Xerox is worth $6.5 billion. Microsoft is worth $1.01 trillion. Apple is worth $874 billion.

Of course, Steve Jobs eventually visited Xerox PARC and rolled many ideas of the Alto into an Apple computer first called the Lisa and, later, the Macintosh. Soon after, Microsoft released Windows that looks suspiciously similar.