Mark Nichols





The following are excerpts from my book, which details how I co-founded Digital Island, an international telecommunications company, in 1996. In this role, I was responsible for acquiring the network infrastructure that connected all regionally significant ISPs worldwide, enabling the effective globalization of the internet and web through a single autonomous network. In addition to other internet milestones that we achieved, this book explains how this new network enabled the globalization of eCommerce in collaboration with Visa, MasterCard, Charles Schwab, and e*Trade.

For a common understanding of what the internet is actually made of, we must first clarify that the software codes of the Internet protocol suite, also known as TCP/IP (Robert Kahn & Vinton Cerf, c. 1974), and the World Wide Web (WWW, Timothy Berners-Lee, c. 1989), initiated the software development of what later became a seamless global physical networking infrastructure, commonly referred to as the “internet” or “web.” The TCP/IP framework software, which organizes the set of communication protocols used on the internet, and the WWW software, which enables content sharing over the internet, are the foundations for what became the software for the internetworking of multiple computer networks.

Clearly, however, the software running on a website server or displayed in a desktop browser application does not physically constitute the internet or web. The actual realization of the internet as a functioning global network is a totally separate endeavor, costing billions of dollars in capital investment and requiring many different and entirely distinct areas of physical network and infrastructure specialization.

The content on this site will provide a brief overview of my team’s entrepreneurial journey, which started with the creation and assembly of a business case, network architecture, customer acquisitions, specialized human collateral, and a $779 million speculative venture capital investment. Beginning in 1996, we started making this investment to fully realize the potential of those software codes, originally written and intended for worldwide implementation twenty-two years prior for TCP/IP and seven years prior for WWW.

Subsequently, the realization of the internet protocol suite, when combined as originally intended with the physical global network infrastructure, triggered the explosive exponential growth of the internet and web, thereby fundamentally and profoundly transforming our modern societies and civilization.

Keep in mind that websites are a very recent innovation and a communications phenomenon. The Mosaic web browser, the first to display images in line with text instead of in separate windows, deserves recognition for this proliferation. The National Center for Supercomputing Applications at the University of Illinois Urbana-Champaign developed the browser, which saw its first public release in 1993. The browser’s indispensable role in popularizing the use of the general internet through the integration of multimedia is impossible to quantify.

These networking inventions, investments, and installations are what sparked the revolution of information sharing and, in doing so, contributed to changing the way humans communicate. The creation and globalization of the internet are widely considered among the most transformational events in human history.

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First, envision yourself going back in time to 1996. Now take a look at the illustration above; the blue lines are the areas of service for regional internet service providers (e.g., France Telecom, Japan Telecom, Singapore Telecom, Deutsche Telekom). And the red lines are the international private line circuits that I contracted for and put into service in all major metros with the largest ISPs and connected them altogether for the world’s first internet protocol-based, global wide area network.

How did the caterpillar become a butterfly? Now visualize:

1. Take away the red lines—that’s the “internet caterpillar” of 1996. This is before the first global network to facilitate seamless end-to-end internet access to all major metros and internet-available service areas around the world.

Without seamless global connectivity, the internet protocol suite, which incorporates the World Wide Web code, does not exist outside of the local hosts and regional applications. Consequently, ISPs were using the software primarily on regional-wide webs. Therefore, the potential usefulness of the suggested Internet and World Wide Web applications remained uncertain, with their regional implementation serving merely as namesakes. With the software protocols, worldwide utilization could be achieved, but at the beginning of 1996, nobody had yet put the codes into service on a global network.

At the time I began building this network in 1996, ISPs were territory-focused within their own regional network infrastructure. An example is France Telecom and Japan Telecom, which mostly service French and Japanese businesses and consumers, respectively. They offer services only for internetworking access to content within their sphere of influence and legal borders, which physically and legally limit their network footprint and geographically restrict the customers who buy access to them. By design, regional ISPs did not guarantee access to content outside of their networks, especially to content in separate countries or stored in networks located on other continents. There wasn’t the business proposition to create a worldwide and global ISP to do so at the time.

For instance, Rostelecom in Russia was not connected to Embratel in Brazil, Malaysia Telecom was not connected to Telefonica in Spain, Korea Telecom was not connected to NetVision in Israel, etc. It was too expensive, and the economies of scale had not yet been financially presented with a solution to envision shareholder return on such a networking endeavor. You could have a website or web-centric application anywhere in the world, but that does not mean everybody in the world could access or use it.

2. Now put the red lines back in—that’s the “internet butterfly” infrastructure metamorphosis of globalization. These global private lines spanning the world created the first global ISP backbone, interconnecting all major regional ISPs within each metro, thus realizing the full capability of the internet suite of software protocols.

By January 1999, the Digital Island network had connected all the world’s major ISPs that were currently available for internet connectivity, including those in England, France, the Netherlands, Germany, Spain, Russia, Israel, Mexico, Brazil, Australia, Singapore, Malaysia, Hong Kong, Beijing, Taiwan, Japan, South Korea, Canada, Miami, New York, Los Angeles, Boston, Chicago, Virginia, Seattle, Honolulu, Palo Alto, and Santa Clara.

Because our global network services did not pre-exist prior to our start-up, we were able to contract to host and broadcast the websites and networking infrastructure to 881 customers in under four years from our company’s inception. These clients included Cisco Systems, Stanford University, Microsoft, Google, Visa, Intel, Compaq, Hewlett Packard, eTrade, Charles Schwab, Novell, National Semiconductor, MasterCard, Sun Microsystems, Sandpiper Networks, Candle Corp, NetGravity, Canon, AristaSoft, Universal Music Group, ABN Amro, UBS Warburg, Digital River, Wall Street Journal, Financial Times, EBSCO Publishing, Fox Broadcasting, ZDnet, Reuters, Kenneth Cole, MSNBC, Major League Baseball, Time Warner-Road Runner, AOL, CNBC, JP Morgan Chase, Sony, Bloomberg, and over 800 others.

Note that with 881 customers in four years and with 220 business days a year, our customer acquisition rate averaged more than one new customer every business day for four years.

With the above in mind, prior to 1996, there wasn’t a business case for regional ISPs to subsidize the investment of infrastructure from the monopoly telcos and interconnect with the rest of the world’s ISPs. This means, from a user perspective, that not everyone could see my website because their ISP wasn’t connected to my ISP. Therefore, having a website and an ISP hosting and broadcasting your content using WWW code did not mean your website was worldwide, and in reality, it was quite the contrary.

Thus, at the time, the inherent vice of the Internet and World Wide Web technology is that not all ISPs are internetworked with each other, and where the interconnection doesn’t exist, there will be no service guarantees amongst users who are not on the same network.

In summary, by co-founding and creating the first global ISP and connecting all of the regionally significant ISPs throughout the world together into one seamless global network, this is “How I Made the Web World Wide.”

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Beginning in June, July, and October of 1996, I used the following three drawings to communicate my networking proposal for the globalization of the internet.

The first image is my original handwritten drawing, which conceptualizes my planned globalization of the internet. In the document below, the figurative discussion points-of-presence (POPs) represent the proposed global networking of AsiaPac, the Americas, and Western Europe, and the unnamed points-of-presence represent the “rest-of-world” in this discussion document.

 

The Genesis Network Diagram to Globalize the Internet, by Mark Nichols, June 1996

The Genesis Network Diagram to Globalize the Internet, by Mark Nichols, June 1996.

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The image below is a global internetworking rendering I made in the spirit of the above hand drawing that I created with my CAD software program on my home PC (Mac IIcx purchased in 1990). Note that, at this time, I’ve already positioned the network hub to be located in California.

v.1 CAD Network Diagram to Globalize the Internet, by Mark Nichols, July 1996

CAD Network Diagram to Globalize the Internet, by Mark Nichols, July 1996.

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The image below is my v.2 CAD global internetworking rendering that I drew and used for the Cisco Systems hosting discussions. This drawing was included in the service contract addendum (shared below) for hosting the www.cisco.com website. Note to peers: the frame relay was swapped out to clear channel IPLC in Q1, 1997, after proof of concept in Q4, 1996.

v.2 CAD Network Diagram to Globalize the Internet, by Mark Nichols, August 1996

CAD Network Diagram to Globalize the Internet, by Mark Nichols, August 1996.

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On November 7th, 1996, I contracted with Cisco Systems to host the www.cisco.com website as our first customer for our proposed global network.

To realize this agreement with Cisco proposing to trust us with their website, I first had to productize and articulate the hosting services, calculate the financial modeling, negotiate the terms of service for the QOS metrics, and then personally endorse the document at the Cisco Systems HQ campus. We used this contract, which formalized our agreement as a proof of concept, to secure our angel financing and over $779 million in subsequent rounds of investment. When I signed the contract, we were a 90-day-old, three-person company, and we now needed to hire many highly qualified and talented people to support our commitment to Cisco in acquiring and managing the network infrastructure to globalize the internet.

At the start of 1996, Cisco ranked #587 in the US Fortune 1000 for capitalization value. Three years later, in 1999, Cisco became the world’s most valuable company. Founded in 1984, Cisco achieved this level of success for the first time in history that an internet company ranked as the #1 most valuable company in the USA and the world, and they accomplished it in just 15 years from startup. During this time, we were the web hosting contractor and ISP for Cisco, which provided that global scalability.

 

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Below is our company’s first press release announcing the above services contract to host the Cisco Systems web site and the announcement of our “NEW GLOBAL NETWORK.” January 1997.

 

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Our second customer acquisition press release is below for the collaboration we made with Stanford University for their e-Publication and e-Learning services.

Stanford was one of the first two nodes of the internet, along with UCLA, in 1969, and we were now hosting and broadcasting their website on our global network in 1997. Consider the magnitude of the value proposition of our global network, such that Stanford and Cisco were our first two clients. Our services also included providing Stanford with the internet platform that the founders of Google used for upstream ISP connections to build the first repository of Google search results, while the founders were graduate school students at Stanford University in 1998 (google.stanford.edu).

With Cisco and Stanford onboarded, the world of technology and finance began to take very serious notice.

 

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The press release for our eTrade customer acquisition, investment, and board seat. Prior to this, we had Visa on-network since 1997, and it was only a few months later that we brought online Charles Schwab and MasterCard. Seamless and global eCommerce with Visa, MasterCard, Charles Schwab, and E*Trade were all simultaneously available on a six-continent scale, in effect for the first time in every major metro worldwide and only available on our network. And thus, from these milestone achievements, we enabled the globalization of eCommerce.

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For a little trip down memory lane, the three images below are the original receipts for the first tranche of SunMicro servers we acquired to build our global network and make the web worldwide. The shipping dates are September and October 1996.

Note that the shipping of the servers is addressed to my residence in Alamo, CA, because at this time our three-person start-up team doesn’t yet have an office space, a data center, or a customer (that’s all a month or more away).

 

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The following images are a sampling of the pages from my passport, which document my business development travels to acquire the infrastructure to build our global network.

The first image below, with the blue square outline on the right side, is from Beijing, where during my visit I negotiated and contracted for the first internet access to the People’s Republic of China, and more specifically, to access the China Education and Research Network (CERNET).

 

 

 

 

 

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The following press releases are about the data centers I acquired around the world to add to the infrastructure required to build our global network and facilitate what became the world’s largest media streaming network.

 

 

 

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As introduced in the opening paragraphs, internet protocols are neither the physical internet nor the web. To realize the potential of such software authorship, somewhere, somehow, somebody has to raise the money to pay for network and telecommunications expenses. The following outlines what Digital Island’s finance team accomplished, which funded the acquisition elements that made the Digital Island global network infrastructure:

$300K Angel Investment, ComVentures, November 1996

$3.5M Series A, January 1997

$10.5M Series B, March 1998

$10.5M Series C, September 1998

$50M Series D, March 1999

$60M Initial Public Offering NASDAQ (ISLD). See the image supporting the S1 filing below.

$45M Private Equity investment from Microsoft, Intel, and Compaq Computers. See CMS MarketWatch article below.

$600M Private Secondary Offering, Goldman Sachs

$779.8M total equity raised

$12B publicly traded valuation at high water mark

 

 

 

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The following are excerpts from my book that share a bit of the historical perspective about the volume of use of internet protocols and why, in 1996, the opportunity still existed to build the first global TCP/IP/WWW network, 7 years after the creation of the WWW protocol, and 22 years after the creation of the TCP/IP protocols.

On the global scale of internet use at the end of 1995, there were 23,000 websites throughout the entire world available to 7 billion people, and only 7,000 of those were not “adult-themed” content, which I will refer to specifically hereafter. I personally owned and operated one of those 7,000 websites (perfectwheels.com), which made me a 1-in-a-million person on earth who owned and operated a website at the beginning of 1996. Additionally, those same metrics numerically invert to only 1 website per 1,000,000 people. Now, in 2023, there’s 1 website for every 8 people, for a growth rate of 43,500 times the increase in websites in just 28 years.

Correspondingly, the number of internet users at the end of 1995 was 16 million worldwide; that’s only 1/5 of 1% (.002%) of the world’s population. The geographic distribution of those users was 2/3rds were located within the USA, and the rest of the world was cumulatively 1/3% of .002% of the population at .00075%. Now, at the time of this writing in 2023, there are 6 billion people using the internet worldwide, or 65% of the population, which represents a 375-fold increase in internet user participation in just 28 years.

Clearly, with the adoption metrics at 43,500-times more websites and 375-times more users in 28 years, the market opportunity for advancements in human communications and eCommerce was pre-existing. But, prior to 1996, the globalization opportunity had not yet been manifested with infrastructure and peering investments by the incumbent and monopolistic telcos in cooperation with governments. The incumbent telcos could have done it, but they, together with governments, strategized not to. Further detail of their depravity and corruptness is beyond the scope of this introduction, but I address the Presidential Order that initiated the change in the vulnerability of human communications and the government-sanctioned retardation of such by the telecom monopolies in Chapter 1 of my book. Though, for sake of topic continuity and clarity, the following indented five paragraphs will discuss the above in condensed detail.

It’s not widely known that, from 1989, when WWW software was initially created, the WWW software was reserved for government-only use for the first three years and was not available for public use. This changed in 1993, when the WWW was made available for public use at no charge. Despite this new availability, government suppression of global networking persisted in tandem with incumbent telcos until US President Bill Clinton signed the Telecommunications Act of 1996 into law. This act was the first in the world to strike down an important legal protection for telecommunications monopolies and oligopolies to solely provide telecommunication services.

Thankfully, President Clinton and Vice President Gore brought into law the opportunity to “Let anyone enter any communications business—to let any communications business compete in any market against any other.” This act by the President will be memorialized as one of the most profoundly impactful acts of any President by enabling private enterprise to enter a former government-controlled and restricted field of utility.

Vice President Al Gore looks on as President Clinton uses an electronic pen to sign the Telecommunications Reform Act, Thursday Feb. 8, 1996 at the Library of Congress in Washington. With high-tech fanfare and a touch of humor, the president signed the bill to revolutionize the way Americans get telephone and computer services. (AP Photo/Doug Mills)

The intent and result of this presidential order was that in just a few short years, the above would change how globally diverse societies would proliferate their ability to communicate and trade by revolutionizing how Americans get telephone and computer services, thus lessening the impacts of the telecommunication monopolies that had been in effect since 1934 and allowing new service providers, like Digital Island, to enter the internet and telecommunications services industry. Note that throughout the rest of the world, there were still heavily regulated and protected monopolies existing for telecom. 

It’s an interesting fact that every IPLC (international private line circuit), local loop, and internet access port I acquired around the world were, at first, technically illegal for me to acquire. Many of my initial inquiries to foreign Tier One telcos and ISPs went unanswered or rejected because Digital Island was not a federally licensed telecommunications carrier. Due to pre-existing laws in those countries, we were not allowed to connect to their networks. In those instances, it was only after I made an in-person presentation, demonstrating our proposed network’s opportunities, that we received the special permissions, approvals, waivers, or amendments to the terms of service that worked around this problem that I was able to get contractually interconnected to their networks legally. These legality and government compliance issues with the rules and regulations of the Securities and Exchange Commission (SEC) were of paramount importance due to the financial and legal sensitivities we would have in eventually selling our stock to the public.

For this market timing opportunity in 1996 to present itself in the USA, it took a Presidential Order, an act of legislation at the highest levels of government, and this is what got our entrepreneurial minds thinking about how to start getting involved with the opportunity. Anecdotally, within 90 days of the law’s enactment, I created some of the global wide area network diagrams shared in this book, and in less than nine months from the bill’s passage, I signed the Cisco Systems hosting contract that started our globalization of the internet. Thus, the aggregation and scalability of global telecom circuits had to originate and start in the USA in 1996 first, if it was going to happen at all. And that’s under the premise that anywhere else in the world, there was the legality, money, vision, and human collateral to do it—and, prior to 1996, that did not exist as a package anywhere else in the world except in the USA.

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If you found the above to be of interest, please consider reading the book, as there is much more information about the adventure of creating the enterprise. The book spans less than 80 pages, with approximately 20 of those pages dedicated to images. My aim was to create a narrative that incorporated various sources such as contracts, press releases, photos, email communications, diagrams, and more, using the written prose to contextualize the images. For time budgeting, I estimate it will take most people about two hours to read. I tried to employ a writing style for non-industry people to make the story interesting and the readability accessible to everyone, but there is enough information to keep those who are in the industry captivated and informed.

How to contact Mr. Nichols

My daughters initially encouraged me to write this book, suggesting that I use it to teach university-level business students about technology start-ups and entrepreneurialism, including the principles and concepts of potential Wall Street investments through initial public offerings (IPOs). If you would like to contact me for a discussion about a speaking invitation for your school or institution, an educational series for students or employees, or something else, you can text or call 1-775-600-3400, or use this email: [email protected]

My book, How I Made the Web World Wide, is now available on Amazon. Click here to go to my Amazon page.

 

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5 thoughts on “Home

  1. May I simply say what a comfort to discover someone that really knows what they are talking about regarding the internet. More people must look at this and understand this side of the story. I cant believe you are not more popular since you surely have the gift.

  2. I just took a look on your website and saw your explanation for the financial and political aspects of building the internet. I had no idea what it took to actually get it going and built-out. This is really interesting information to know.

  3. The activities you share about internet history are truly fantastic! You have touched on some important things here. Keep up writing.

  4. Your explanation of the separate branches of software code and physical network is an interesting read. There hasn’t been much discussion about the significance of this distinction.

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