Xerox really missed out - inventing the GUI, laser printer, and ethernet among other things. How did IBM and Apple take over and Xerox end up as a has-been also ran? What went wrong in their commercialization of revolutionary technology?
They weren't the only ones. In the 1970s I worked for Tymshare, a pioneering timesharing company. In a way, we were the "cloud computing" of the day, but with no local compute at all.
Just Teletype machines and then "glass teletypes": a CRT terminal that merely mimicked a Teletype with scrolling text, but with the disadvantage that if something scrolled off the screen you couldn't reach behind it and pull up the pile of paper to look at your old code. It was gone.
They were quiet though.
Later I discovered a "programmable terminal" in a side office/storage room that no one used. It might have been a Datapoint 2200 or something similar. Whatever it was, it had a processor and a character mode screen buffer that you could address directly.
Naturally, I immediately wrote Conway's Game of Life for it in assembly language.
When my manager saw this, he was fairly gentle: "Mike, that must have been fun to program. But we have business needs. Can you please forget about this useless machine and get back to work?"
I had more success with another programmable terminal: a Texas Instruments DS990/1. I found this in the back room of our Texas office, after I flew down to design and implement our usual Teletype "print a question, you type in the answer" interface. Then I saw that I could put the entire UI on an interactive screen, and stayed up all night implementing it.
Our sales team and customers loved it, so this one made us some money.
Not long after that, we hired Douglas Engelbart. Yes, that Douglas Engelbart.
Obviously, someone in the company had taken an interest in what Doug was doing, but he never got any resources to build his vision of the future.
I worked in the same building and often walked by his corner cubicle. With my own interest in more human-oriented interfaces, I sometimes wonder what might have happened if I'd introduced myself. But I was a shy young geek and walked on by.
Sometimes it's just the wrong place, at the wrong time.
i remember tymnet! their local dial-up pops fueled a lot of the commercial information services (compuserve, genie, prodigy, aol) that were popular in the 80s and 90s.
The lesson of Xerox PARC is this: Even if you're 10 years ahead of everyone technologically, it's still impossible to predict how the market will unfold.
The arrival of Visicalc transformed the toy personal computers into legitimate business tools and set Apple on its course for what would be the largest IPO in US history up to that point. No one saw it coming until it happened.
Once it happened, the Xerox brass in New York question how they missed it, and start to demand a return on the money they've been pouring into PARC. This is what led them to seek a partnership with Apple and the infamous Alto demos for Steve Jobs.
Meanwhile, the PARC folks start to realize that the rest of this now exponentially expanding industry is going to catch up to what they're doing faster than they can scale down their stuff into a commercially viable product.
Xerox takes a huge swing with the Xerox Star. It's a market failure for a number of reasons. IBM takes a little swing with the PC, and it's a huge success, but they don't control the software. The PARC folks leave to join the rest of the industry, taking what they learned with them.
Xerox Star was $25,000, and came with all the software they had: WP, spreadsheet, file manager. Coded in Pascal.
Apple Lisa was $10,000. Same, otherwise. ("Clascal", compiled to bytecodes interpreted by 5 MHz 68k.)
Mac was less, but a toy. A little later, Mac 512 (i.e. 1/2MB RAM) was kinda usable, with a pair of 140kB floppies. $2000? Had a monochrome 1bpp paint program, no WP, no spreadsheet. You bought MacWrite separately ($125?), and Multiplan (a proto-Excel) from MS.
The LaserWriter came out pretty quickly after, making it radically more useful. That had a computer inside much beefier than the Mac driving it; they could have put a keyboard, mouse, and monitor connector on the Laserwriter and had a much more useful product much sooner.
For B-school analysis, this isn't your book, but if you want to know what it was like to live through it without knowing the outcome, this is it.
I really tried to get the numbers to back up Dave Liddle's assertion that Xerox made enough from laser printing, all by itself, to make up for all the costs of PARC and commercialization. That data's long gone. Anyhow, they did commercialize laser printing pretty effectively, although obviously not well enough.
The interesting bit that seems to be forgotten was that the US Govt went after Xerox for monopoly reasons [0]. That is how much profit they made picking one of the many technologies that came out of PARC. If they had picked multiple maybe they wouldn't have been as successful? Its really hard for a company to excel in multiple different physical product lines.
The timeline is off. The antitrust complaint was about xerography, which did not come out of PARC.
There IS a connection, though: Xerox settled the suit by licensing its patents, which led management to think "holy shit, we're losing the monopoly, we'd better do something" and start up PARC.
You are right, I was thinking about this earlier and that I think the government forced Xerox to release laser printer patents in the mid 1980's but as an unpaid internet commenter I ended up at an article from a decade before then.
“Following these years of record profits, in 1975, Xerox resolved an anti-trust suit with the United States Federal Trade Commission (FTC), which at the time was under the direction of Frederic M. Scherer. The Xerox consent decree resulted in the forced licensing of the company's entire patent portfolio, mainly to Japanese competitors. Within four years of the consent decree, Xerox's share of the U.S. copier market dropped from nearly 100% to less than 14%.[31]”
> How did IBM and Apple take over and Xerox end up as a has-been also ran?
They were too far ahead of their time. The component costs needed to come down first.
In 1981, the "starter kit" for their office system consisted of one Xerox Star for a user, a second Star to act as a file and print server, and a laser printer for about a quarter of a million dollars in today's money.
Each additional networked Star that you added was about $50,000 in today's money.
Even at those prices, the system wasn't exactly snappy. I do wonder what would have happened if they had kept iterating on the product until faster, cheaper components arrived.
I don't think that was the fundamental issue. It was one of mindset. Xerox tried to sell to their existing customers, with the same sales structure and pricing they were used to. They simply weren't structurally set up to deal with mass-market consumers. The Macintosh team targeted a completely different set customers, with a less ambitious and much cheaper product.
The IBM story is a bit of an outlier, but Microsoft saw the same potential Apple did.
I think it was both. No one in Xerox management understood that they could grow a new market - possibly with loss leader hardware sales - instead of trying to farm their existing market.
So the Alto was never properly productised. It was essentially a boutique product at a big-mini price. That made it competitive with DEC and IBM minis, but not with budget the $10k S100 systems that were just about - barely - powerful enough for a small business.
To be fair to Xerox, six figure systems weren't unusual for business customers at that time. Which could be why the company never understood that it had the key to popular budget semi- and non-pro commodity computing.
DEC died for much the same reason. DEC management were used to selling to fellow nerds and business people, and couldn't imagine super-affordable commodity products.
MS, Apple, and the IBM clone makers saw the new market for what it was. So did some of the new software houses.
IBM itself almost did, but couldn't quite shake its monopoly-oriented culture. So MS and the clones killed it in the commodity space.
The Alto was super-slow, even by standards of the time. It had a very, very limited CPU running an emulation of a more powerful ISA that app code was compiled to.
Things we expect to have dedicated hardware for -- network interface, display screen painter, disk interface, laser printer driver -- were just interrupt routines all on the one CPU. Programs competed for CPU time with feeding pixels out to the CRT-scanning electron beam, and with bits moving directly to and from disk-head R/W coils.
It did switch between those tasks pretty quickly, not like most machines then or today: there was no foolishness about saving and restoring registers. Each interrupt task was assigned a couple of registers permanently, including its own program counter, so an interrupt only ever just flipped which program counter was in charge.
The app-level instruction interpreter got to use what few registers remained.
So, on an interrupt, it would execute a half-dozen instructions to move one machine word, and yield. There were 16 PCs that ran in strict priority order, with the user-program instruction interpreter last in line. Each "yield" put the current PC back to the entry point for the next word to be processed, and the next live lower-priority PC determined the instruction to run next.
The OS was just one of those user programs.
It resembled the I/O processor on CDC mainframes of the time. It just ran the programs, too, not only the I/O.
But it really is amazing what they got it to do. Later machines e.g. Dorado and Dolphin had more stuff done in hardware so could be faster.
They did keep iterating on the product until faster, cheaper components arrived. They had a product called GlobalView, which lasted all through the 80s and early 90s. Of course I know some people who stuck with it.
What they couldn't wrap their heads around was: no one cared anymore. The world had moved on.
In addition to what GeekyBear correctly stated, Xerox were photocopier salesman: the company was run by photocopier salesman and their global sales people were all photocopier salesman.
They had no idea what to do with this stuff and no real desire to understand it, nor sell it.
If it'd been 1/10th of the price, that probably wouldn't have mattered too much, but...
That's where you're wrong. There was a special sales force to sell the Star. It was small, though: maybe 100 people. Photocopier salesmen weren't allowed to sell it.
