Dealers of Lightning (52 page)

By 1975,
the fifth year of
PARC's
existence, George Pake's prediction
had come
true:
The
center had outgrown its original quarters, and
then some. There were two hundred employees spread among three
locations ranging from Porter Drive up to Hillview, where two build­ings were now rented. In March Jack Goldman's original vision of a
free-standing shrine to basic research was realized with the opening of
PARC's ten-million-dollar permanent home at 3333 Coyote Hill Road,
directly across the street from Building 34.

The new building had a difficult birth. Its ground-breaking had been
delayed for more than two years, until August 1973 (Goldman and sev­eral other dignitaries took home silver-plated shovels marking the occa­sion), by an old land-use controversy enflamed by a local conservation
group's discovery that Stanford University, the site's owner, had illegally
subdivided the land. The so-called Committee for Green Foothills sued,
tying up all development on the site until Xerox, desperate to get its con­struction project under way, brokered a settlement.

As part of the deal Xerox and Stanford agreed to stringent construc­tion restrictions. The PARC building was to be no more than 200,000
square feet (its first phase actually came to only 120,000) and situated
out of view of motorists passing on most of the major local thorough­fares. Stanford's penance was a pledge to leave several neighboring
(and potentially lucrative) acres permanently undeveloped.

Designed by Gyo Obata, an architect who had made a name for him­self with the arresting design of the National Air and Space Museum in
Washington, D.C., PARC was a long rectilinear concrete building
adorned with hanging gardens. The building cascaded down the hillside
in steps, arranged like an upside-down cake so that visitors entered on
the third floor, where the administrative staff was housed, and descended
to the second (occupied by the computer and system science labs) and
first (the general and optical science labs). There at the bottom was a staff
entrance, gratifyingly outfitted with a sheltered bike rack. Responding to
suggestions Rick Jones had dutifully collected from the building's future
occupants, Obata generously fronted PARC's northern elevation with
horizontal ribbons of glass to bathe its interior in ample sunlight, and fur­nished it with numerous open-air atriums ideal for the tranquil contem­plation of nature, technology, and the nexus thereof.

The completion of the Coyote Hill building represented a milestone in PARC's public profile. The local newspapers featured fulsome interviews
with Pake, glimpses of the office of the future ("scientists at the Xerox
Research Center in Palo Alto aren't even working with copiers ..
.
"), and
optimistic talk about the blending of the new sciences with the old.

The contrast could not be greater with the grim saga playing itself out
a few hundred miles to the south. This was the death watch over SDS.

"McColough's Folly" had been an invalid virtually since the moment it
changed hands back in 1969. Periodically it would come under the
microscope of one task force or another (Jeny Elkind served on one such
group in 1972), but no one could ever find a way to stanch the flow of red
ink. Instead, Xerox management tried to hide the losses deep within the
balance sheet by reorganizing the company into three functional organizations—sales and marketing, engineering and manufacturing, and strat­egy and planning—and distributing pieces of the computer business
among them. As part of this program, Xerox in 1972 dissolved SDS as a
separate entity and fired Dan McGurk, the former Palevsky lieutenant
who had been running it ever since the sale.

But this tactic could not disguise the losses in computing, any more
than a farmer can obliterate the stench of manure by spreading it over
more acreage. By early 1975 Xerox's poor overall performance had
destroyed the last of Wall Street's confidence in its management. The
stock, which had hit an all-time high of SI79 a share in 1972, dropped to
$50. Corporate legend has it that one day in the men's room at Stamford
headquarters Archie McCardell, the company's finance-oriented presi­dent, told McColough he thought it was time to give up on the computer
business altogether. In response, McColough convened his final com­puter task force. Its purpose was to find the best way to cut adrift what
was left of SDS, which may be why it was given the Homeric code name
"Odyssey."

Among Odyssey's members was Rigdon Currie, who tried to fight a
rearguard action against the extinction of his old division. "1 put in a
pitch to cut the operation back to our original customer base in scien­tific and real-time computing, instead of competing with IBM in the
business market," he recalled. "I got stepped on."

Odyssey's conclusion, instead, was that the computer business could be
neither saved
nor
sold at any price. Currie was handed the disagreeable
assignment of cutting the best possible deal for its remaining odds and
ends with Honeywell, which had made a practice of scavenging the
shards of other companies' failed ventures in computing. To cover the
expense of getting out of the business, Xerox took an enormous $84.4
million write-off. The action produced the company's first annual loss
since the introduction of the Model 914 copier, fifteen years earlier.

Nothing was left of the long misadventure of SDS other than the pla­toon of researchers now installed in their imposing new hillside palace in
Palo Alto. If Xerox was to be persuaded that digital technologies were the
key to its future, it would be up to them alone to make the case.

PART III

Messengers

During the course
of 1977 Peter
McColough
began
to
fear
that his corporation
was coming
apart at the seams.

The previous
few years had
been a skein of
disap­
pointments and embarrassments
for Xerox. In 1975
had come
the
unrav­eling of the
SDS
purchase—
"McColough's Folly"
—and the resulting
$84.4
million write-off. The foreign
invasion had
turned into a full-scale
rout, with
a
hundred thousand
inexpensive Japanese
copiers sold in
a
market segment for which
Xerox had no competing
product.
Then IBM
and
Kodak
took direct aim at the
heart of Xerox's
traditional customer
base by introducing fast new
copiers of their own.
There were antitrust
lawsuits and patent infringement
battles. To top
it all off, the
U.S.
econ­omy was in terrible shape, squeezed
by the pincers
of high inflation and
savage recession
—
an unprecedented combination known as "stagflation."

The Xerox
chairman knew something had
to
be done to stem the
erosion of morale or his best executives and salespersons would
flee.
His
solution was to throw one huge, historic party.

McColough envisioned the Xerox World Conference of
November
1977
as a sort of company-wide revival, a last attempt to restore the pas­sion that had fueled its rise nearly twenty years earlier, when
Joe
Wilson
bet the farm on an untested technology and won the world. The guest list
would comprise the top 250 executives of the worldwide organization
and their spouses. The setting would be Florida's exquisite Boca Raton
Country Club, where the food, accommodations, and entertainment
through four days of celebration, exhortation, and rebirth would be first-
class all the way. In McColough's imagination, the affair would evoke the
atmosphere of the previous World Conference, held in 1971 when
Xerox's wealth and hubris were at their very peak.

It is not clear which individual first proposed that PARC play a major
role at the World Conference. In any case, once McColough heard the
idea of using Boca Raton to introduce the technologies
PARC
had
invented to the sales force, he embraced it whole heartedly. PARC would
not only get a chance to show off; McColough decreed that one entire
day of the four in Boca Raton would be devoted to PARC alone.

One morning that summer, the SSL's director, Bert Sutherland
invited John Ellenby into his office. Ellenby had worked in the Com­puter Science Lab for three years, during which time he had gained a
well-deserved reputation as a man who Got Things Done—schematics
realized, prototypes built, projects completed
—
not at all an easy
proposition amid the clash of egos and the religious wars raging
unceasingly over engineering and design at PARC.

"If you had a free hand, John, what would you do to show off our
work?" Sutherland began. "You see, there's this big conference coming
up for managers from all over the world, and we've been invited."

Ellenby thought for a moment, then asked, "Just what do you mean
by a free hand?"

John Ellenby was a slender, pale Briton with a fringe of brown hair
crowning his high forehead. His unusually varied education and work
experience had included the study of economic geography at the Univer­sity of London, a teaching post at the London School of Economics, and,
following a course in systems engineering from IBM, a dual appointment
as a lecturer in computer science at the University of Edinburgh and con­sultant in computer architecture and graphics to Ferranti Ltd., the pio­neering British computer maker. His first encounter with PARC had
occurred back in 1971 thanks to Dan Bobrow, who was passing through
Edinburgh on a fellowship. Bobrow described PARC to Ellenby and,
when he returned stateside, described Ellenby to PARC. Not long after
that Ellenby happened to be passing through the Bay Area; an invitation
was issued for him to address a Dealer, and in September 1974 he was
hired by Jerry Elkind, who no doubt saw in Ellenbys ability to shuttle so
easily between academia and industry a reflection of his own skill in bal­ancing good science and solid pragmatic judgment.

The terms of Ellenby's employment amounted to a pay cut. Owing to
the good salaries he pulled down from two full-time jobs, he lived in rel­ative luxury in a large old stone house in Edinburgh with his sculptress
wife, Gillian, and two young sons. "But that was immaterial," he said later.
"The chance was to work at PARC, which was absolutely the top-notch
computer sciences lab in the world. So I joined, and we all moved."

He had worldliness enough to discern at a single glance the dividing
line separating PARC's virtues from its flaws. The former included the
work that had produced the Alto and the Ethernet, which impressed him
as marvels of elegant design and superb feats of engineering. The latter
included Taylors dogmatism, which Ellenby believed discouraged
thoughtful dissent in the Computer Science Lab. He was dismayed to
find genuinely farsighted projects such as Shoup's Superpaint and
Bobrow's work in artificial intelligence, both of which challenged CSL
orthodoxy, hanging on by their fingernails.

"Computer architecture in those days was a major battleground for reli­gious wars," he recalled, "and Xerox had them big-time." His first assign­ment would have him interceding between two of its contending armies.

The task was somehow to get the Alto manufacturing process jump-started. The machine had been designed and prototyped but as yet there
were only five in existence. The construction program, it seemed, had
mysteriously stalled somewhere between Palo Alto and El Segundo.

As it happened, Ellenby had distinguished himself as an industrial con­sultant in Great Britain by transforming dysfunctional programs into
operational ones. Turning his experienced eye to the Alto, he recognized
instantly that the machines were indeed hostages of a religious war—this
one between the Computer Science Lab, which designed them, and

SDS, whose downtrodden factory staff was tasked with building them to
PARC specifications in El Segundo, five hundred miles away.

"El Segundo was a product organization with a lot of pride," Ellenby
recalled. "It had a lot of good guys from the days when they had built a lot
of quite impressive machines. And now they were getting fucked over by
this copier company that knew how to put powdered coal onto drums
that went whistling around and transferred it to paper but didn't know
shit about electronics. So there was a religious problem right there. Then
there was this funny group of weird Northern Californians they had to
deal with while they were trying to solve their other problems. Mean­while there was not a lot of respect at PARC for SDS. And nobody was
really assigned at PARC to make it all happen. The Alto was kind of a
baby looking for its mother."

Ellenby stepped in to referee. His first achievement was getting El
Segundo to complete twenty Altos stuck in the pipeline. Then he took a
radical step. Organizing a small cadre of product engineers into an inte­grated engineering and manufacturing unit he called the Special Programs
Group, he arranged for Chuck Thacker's time machine to be reengineered
into an object that could be efficiently mass-produced. The Special Pro­grams Group replaced all the Thackeresque shortcuts, which looked like
virtues when the goal was hastily to turn out a serviceable machine with
spare parts, but were now merely the sources of annoying glitches.

"No fault of Chuck's, but the machine was just flaky," Ellenby said. "I
had come from a pretty rigorous background because the machine for
which I had been consulting designer at Ferranti, the Argus 700, was
designed for very high-reliability process and communications control.
I thought that somehow or other a machine that stops for no reason
was not a good machine."

Ellenby's group added a memory error-correction system similar to the
one Thacker had designed for MAXC (but had left off the Alto). This
substantially cut the manufacturing cost of the machine by allowing the
SPG to use more error-prone, but cheaper, memory chips without com­promising the machine's reliability. The original Alto was almost unmain­tainable ("In order to get to something you had to take a lot of other stuff
out," Ellenby recalled); he ordered the innards redesigned so every com­ponent would be easily accessible just by opening the cover, as in todays
desktop PCs. The so-called Alto II was both durable and easy to manu­facture on a small production line. "We just popped em out," Ellenby
said proudly. This was the machine that proliferated throughout PARC as
a springboard for some of the most striking technological innovations the
world has ever seen.

Soon after the new machines started rolling off the fabrication line in
early 1976, however, Ellenby came face to face with the realities of tech­nology politics at Xerox. Heady from the triumph of the Alto II, he forged
ahead with a plan to design and manufacture an Alto III. This would be
the Holy Grail: a mass-marketable, programmable computer that would
exploit the snowballing manifestations of Moore's Law (such as faster and
cheaper memory chips) by offering user-friendly word processing, pro­fessional database programs, and more. The goal was for the Special Pro­grams Group to design the machine for manufacture by Xerox's Office
Systems Division, a Dallas-based unit that turned out electric typewriters
and other non-copier office machines under the leadership of a former
Webster lab chief named Robert Potter.